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This is the reason why HDFC Bank's Aditya Puri refused loans to Vijay Mallya and Nirav Modi


Aditya Puri, the top boss at India's most valuable bank, is not known to have built HDFC Bank as the shareholders' darling by giving loans to risky borrowers.

Aditya Puri, the top boss at India's most valuable bank, is not known to have built HDFC Bank as the shareholders' darling by giving loans to risky borrowers.
At an event held in Mumbai on Wednesday, where financial journalist and author Tamal Bandopadhyay was launching his second book on Puri's bank, "HDFC Bank 2.0, Dawn to Digital", the longest-serving CEO was asked why he refused loans to his "friends" Vijay Mallya and Nirav Modi, both now fugitive offenders that owe large sums of money to banks.
In his typical tongue in cheek style, Puri answered by saying that neither Vijay Mallya nor Nirav Modi was his friends. He said, "Somebody in Mallya’s office will tell you, every time the call came from me, Mallya gaali deta tha (he used to abuse). His blood pressure would go up", referring to how the bank declined Mallya's requests for loans from HDFC Bank.
"Friendship and banking are not co-related," he said, "If you are a bad risk, you are a bad risk. You can be my good friend, I can give you coffee and send you away."
Puri revealed that both Mallya and Modi had come to him for a loan, "I gave them coffee and told them that I will consider the loan."
Pointing then towards his former, long-time deputy Paresh Sukhtankar, who resigned from the bank last year, Puri said it was him that turned down Vijay Mallya's proposal finally.
The former Kingfisher Airlines boss is facing charges of fraud and money laundering amounting to Rs 9,000 crore. Mallya has been based in the UK since March 2016 and remains on bail on an extradition warrant executed by Scotland Yard in April 2017.
As per the investigating agencies, Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated the Punjab National Bank (PNB) to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).
For March 2019 quarter, the bank reported a 23 percent spike net income, while its gross NPAs came down to a paltry 1.36 percent, while the industry average is close 10 percent.
State Bank chairman Rajnish Kumar said the opening of the banking sector after the 1991 reforms to the private sector was a "defining moment" which changed the entire landscape.
On the decision of the bankers led by SBI to send Jet Airways for bankruptcy, he said the airline company in "more able hands" of the resolution professionals now.
"We have left Jet in more able hands than us, which is the resolution professional," Kumar said. He also said banking is undergoing a "transformational change" and urged lenders to play the game without getting unnerved.
In an apparent reference to ongoing issues, he said banks will have to undergo the pan for a cleaner and efficient system which will help in the future.
Speaking on the bonhomie between bankers, Kumar said he had his rival Uday Kotak address SBI's top management last year and also the head of HDFC Bank's data analytics.
In a barb aimed at payment companies, he wondered how valuations of companies are going up with the surge in losses. Puri said HDFC Bank is done 90 percent with its aim to be a lifestyle bank and in the next three months, certain clunky things will be done away with.
He also said there is no need for a fully digital bank, stressing that someone may be willing to go in physically as well, to which the SBI head chipped in saying a bank's physical presence is the strength on which digital products can grow.
(With inputs from PTI)

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