Why ICICI Bank selected Sandeep Bakhshi to fix its crisis

Of the existing set of potential leaders, Bakhshi was clearly the only choice as he beat out other high-level candidates that included executive directors Anup Bagchi, Vishakha Mulye, NS Kannan, and Vijay Chandok who were lacking the all-round game that Bakhshi has.

Recently ICICI Bank’s board made an announcement that put to rest a number of theories floating around ICICI Bank-Chanda Kochhar saga that has been making the news for the last couple months.

In a notice to stock exchanges, the board announced that Sandeep Bakhshi, the 57-year-old ICICI employee who had been managing director and CEO of ICICI Prudential Life Insurance since 2010, was now promoted to chief operating officer for the bank with a line of reporting that led straight to Kochhar.

Kochhar, incidentally had gone on leave and in her absence he would be the de facto top boss.

So why did the board select Bakhshi for the job?

In fact, one executive in the banking business said that there was a general view that he was close to retiring because he appeared to have been tuning out from many industry forums and general get togethers.

But sources who know the sector well say that of the existing set of potential leaders, Bakhshi was clearly the only choice as he beat out other high-level candidates that included executive directors Anup Bagchi, Vishakha Mulye, NS Kannan, and Vijay Chandok who were lacking the all-round game that Bakhshi has.

To his credit, Bakhshi is one of the few with the breadth and depth of experience across businesses, is seen as a builder of enterprise, reasonably forthright, and to top it all is a leader with his own mind, the source adds.

“He was likely to be the least controversial also.” The other is his impressive Rolodex in corporate circles in North India.

“This will be helpful for the company as it has problems with non-performing assets there, and given his ties with big companies, it will help negotiations,” opines a former colleague.

Bakhshi who got his mechanical engineering degree from Punjab Engineering College and an MBA from XLRI, is around the same age as Kochhar and a family man with three grown children.

“He’s an out-and-out people person who is tip top on etiquette, will walk you to the elevator door when you meet him and all that sort of thing,” says one private equity executive.

Nor is his sense of courtesy limited to clients and senior managers.Several colleagues who sent congratulatory SMSes to Bakhshi on Tuesday said they received prompt replies from him.

Having joined ICICI Ltd in 1986, he has seen the institution grow from a development financial institution into a full-fledged financial services entity.

He built the general insurance business from scratch, which he joined in 2002.

He also groomed a start-up when nobody understood insurance, which is today the largest private sector general insurer.

In 2008, he was at ICICI Lombard but was brought into the bank when the global markets started to see instability.

After steadying the ship there, he took charge of ICICI Prudential Life Insurance Company in August 2010.

In the eight years that he steered ICICI Prudential Life Insurance Company its assets under management (AUM) have grown to Rs 1.4 trillion now, from Rs 57,319 at the end of March 2010.

Even with a seasoned track record with participation across both retail and corporate banking, Bakhshi was never seen as an aggressive hard-charging ambitious corporate leader, says one business executive who has known him, adding that “he isn’t driven by material success alone.”

So what is he driven by? “He’s someone who walks the talk and won’t hesitate to change existing ways of business to implement a belief that he has conviction in,” says RM Vishakha, managing director and chief executive of IndiaFirst Life Insurance Company.

She’s not wrong. For example, in the insurance business, he has been a staunch believer of the five-year premium pay products and ULIPs, and over time effectively tweaked the business model at ICICI Prudential to where most of it’s revenue come from, newer Ulip-related products.

The banker, who is polite to a fault, faced one major crisis in his career when there were reported instances of ICICI Bank and ICICI Prudential officials duping hundreds of villagers and farmers in Rajasthan by selling insurance policies cloaked as fixed deposits.

The issue was investigated by the Rajasthan police and the policies purchased refunded later.

ICICI was reached for a comment but did not respond as of the time of going to press.

That’s something Bakhshi would do well to clear the air on right away, given the doubts and confusion that already surround the bank.

Either way, his task ahead is not going to be simple, but there is optimism in his selection.

Leo Puri, managing director of UTI Asset Management Company, says, “Sandeep is a proven, effective, and wise manager, who will quickly restore this very fine institution to the position it deserves.”

Time will be the best judge.

Photograph: Courtesy, icicifoundation.org