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The Rediff Business Interview/K V Kamath

'Europe admires India's 'new economy' drive'

K V Kamath, managing director and chief executive officer, ICICI Limited, is considered Indian's finest financial whiz. He was among the leading lights of Indian industry who interacted with European businessmen at the first ever Indo-European Union business summit on June 27 in Lisbon, organised by the Confederation of Indian Industry. He spoke to Y Siva Sankar on the summit sidelines. Excerpts:

On whether ICICI's Net foray would set the benchmark for Indian financial institutions.

I am sure it will. Not that it will be a copycat exercise. But I think it is going to be a need-based exercise. I believe that the future is the Net. And particularly for a country of the size of India, unless we are able to mix the use of technology with conventional distribution systems, we cannot survive. So anybody else leapfrogging onto this is quite clearly doing it for a strategic intent, not necessarily a particular motive.

On how ICICI adapted itself to the 'new economy' and changed the mindsets of its employees.

Actually adapting ourselves to the 'new economy' was much easier than changing mindsets and some of our old concepts in our 'old economy'. That is something actually I have not shared with anybody so far. To me, if I look at our own ability to change -- and I am looking back four years -- on a ten-point scale, I would give ourselves three or four points … for the ability to change …it is in the 'old economy', changing mindsets for various reasons. When it came to the Net, I'd give ourselves a score of 6.5 to seven for the ability to change, but that was a much easier transition than the 'old economy' transition. Probably because when you talk of the Net, we are talking of a clean slate approach, you need not have to unlearn anything. We started by learning so we could very quickly leapfrog on to that. And that has stood us in good stead.

On the success so far of ICICI in becoming a financial supermarket.

I think we are, maybe, a little over half way there. We have another half distance to go. I am hopeful the second half is going to be easier than the first half because we have created the expertise, the structures, the institutions required to get there. So it is like now you are driving at full speed and you could reach your goal faster.

On the feedback from European businessmen about Corporate India.

We have to look at it in two parts. One is 'old economy' initiatives, and the other is 'new economy' initiatives. For our 'new economy' initiatives, everyone is full of admiration. I think it is now up to us to live up to that admiration and not fall flat. Having said that, I am quite clear that the government is seized of it. And we are looking at the changes that the government is doing in things like the convergence law or the new communications law to replace the 1885 Telegraph Act. And everything that goes along with it. It is a sign that this government is very serious about these changes to come. That is the 'new economy' part.

The 'old economy' is always tougher where you've got old systems, old practices, mindsets to change and that is where I got the signal that the partners, Europeans or otherwise, are looking for a change.

On how to structure infrastructure financing in India.

I was struck by the interesting systems they have in Europe. Very interesting structures for toll roads are adopted here. I believe that with a little application of mind, we could apply the same structures in other areas of infrastructure financing in the country.

On the lessons from Europe for ICICI.

We will immediately try to look at how we can learn from these experiences. You asked me earlier a question on how we got on suddenly to the Net. Actually it is very simple. We got on to the Net by observing, by understanding what others are doing, and then trying to leapfrog to the platform and come to where we are now. Wherever we see something new and innovative being done, we try to see whether we can adapt it to our needs. I am sure we can do that.

On how ICICI adopted Portugal's click-and-brick strategy.

I would say that on the IT front, Portugal was one of the first examples that we used in terms of how IT could be used very effectively. Or in terms of adopting what has come to be known as the click-and-brick strategy. Portugal was one of the first countries to have adopted that. We have learnt a lot from them. On the infrastructure financing front, we have a lot to learn from Europe.

On the progress so far and what the future holds for India's Net economy.

Things are rolling pretty well. There is a great degree of acceptance of India as a power in the IT field. And I am sure we shall roll along pretty well without creating roadblocks for ourselves.

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