I think we are paying the price for being a pioneer

Kundapur Vaman Kamath worked the whole of last weekend to deliver the final punch to defeat rumour mongers out to hammer down the share price of his bank, ICICI Bank. Kamath, the managing director and CEO of the bank, was in a “combative” mode always, as he puts it, for the past three weeks. In an interview with Rajendra Palande, at the ICICI Bank corporate headquarters in Mumbai on Tuesday, Kamath said these three weeks “very interesting” and not stressful. Excerpts from the interview.

Do you think the perception that ICICI Bank is a high-risk bank totally out of context?

The perception that the bank is brazenly driven is clear rumour spreading mill out there. I am not a detective, so I don’t want to start assuming I know the answers. All the answers that I know are that the bank is safe. I have articulated what is our net worth, what is our position with regard to our debt investments. Yet, the rumours persisted. Then, finally last week, when rating agencies came out and indicated what they have to say and there was also articulation by regulators, we could nail those rumours. So, I think it is clearly a play on perceptions. For what reasons, it was very apparent.

What were the reasons?

It was clearly to manipulate (our) stock price. Short selling is not illegal. But it is clear manipulation. Otherwise, I don’t see why the rumours are spread with such vigour or force. To me, it is clearly a manipulation. But SEBI has said it has not found anything abnormal in the pattern of trading in ICICI Bank shares… Our job is to basically bring out the facts in terms of what we have seen. Nobody is denying that there was this large rumour mill. We basically leave it to the authorities and now it is for law enforcement authorities to take a look at in what order there was manipulation. It is for the law enforcement authorities to decide whether it is an economic offence or not. We will bring this out to the authorities. That is the due process, which we are follow ing. Everything is with the authorities.

Why was ICICI Bank singled out?

I guess it is all a question of where you see the results would be the best. We have probably the largest people out in the market. We have a very large FII holding. We have fairly large GDR holding. There are a lot of interesting fundamentals about ICICI Bank, which makes it a target. I think we are paying the price for being a pioneer.

What is the greater concern for you — falling share price or the fear of deposit withdrawals?

Falling share price frankly is not a concern. We are well capitalised. But a falling share price could then be used, against in the context of pushing misinformation, to indicate certain things which are not there.

Recently ICICI Bank began a course correction, which included going slow on retail credit. Will those plans change in any way now?

In the context of very high interest rates, we took a call to slow down retail. In the last one-and-a-half years, corporate lending has provided the momentum. Retail will have a place, but at a lower pace. Based on the opportunities that today’s India presents, it does not mean we will quit retail, nor does it mean that we exit any other business. We will be in all businesses.

Are there any lessons to be learnt from the happenings of the last few weeks?

The lessons are very clear. The lesson is that for running any financial institution, get your capital right, which we had. Otherwise I don’t think we would have been in a comfortable position, get people right, get technology right, get products right and focus on your business. That my lesson that I learnt long back and I don’t think I need to correct it at this point in time.

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