India-born Canadian billionaire Prem Watsa, whose group Fairfax won the bid to buy 60.7% in IDBI Bank, is upbeat about India and its prospects. He discusses the way forward for the bank and synergies with Go Digit and IIFL. Excerpts:It’s been a long wait since the process started. How do you view the acquisition and how will it fit into your overall scheme of things?This is the biggest acquisition we’ve ever made. This is because we think India is the place to be, the Indian economy is going to do really well with the goal of Viksit Bharat and $30 trillion by 2047. The next two decades are going to be huge for India, particularly with the fact that you’ve got free trade (pacts). The Prime Minister and Piyush Goyal are negotiating deals with so many countries. This means you can make in India and sell it to the world. India has got great people, the engineers are so good. You have so many Indian CEOs leading global corporations. There’s going to be massive money flowing into India, from the US, Canada, Europe, Japan, from all over the world. There’s going to be a glorious time for everybody with huge employment. The banking system will benefit. China had a period like that from 2000 to 2010, with 10-11% real growth. India is at that level. Now, the focus will be on India.What are your plans for IDBI Bank?We’ve got property insurance, life insurance through Go Digit, which is going there (to IDBI). Wealth management and investment banking, which are with IIFL, are also going there. You’ve got a very powerful combination there with focus on customers and on providing outstanding service. We can attract pretty much anyone to join IDBI Bank. Rakesh (Sharma) is going to build that. It has 2,000 branches but it hasn’t expanded a lot due to the challenges it faced. All that has been dealt with.What will be your message to employees, some of whom are unsure about the future?Over 40 years, Fairfax has treated employees better than almost any company you can think of. We follow the golden rule which is to treat people like you want to be treated yourself. We have never laid off 5% or 10% of the staff. We’re going to work with them and we’re going to have this huge growth opportunity, which means you need people. The service conditions and their other benefits will, of course, remain. When Covid came, we never changed any benefits, we never changed any bonuses, not one person was let go of during that time.You have announced plans for Go Digit, IIFL Capital Services today. Will the exercise also involve restructuring of some of the IDBI subsidiaries and what is the road map for CSB Bank?We have got two years. So, we are going to look at that carefully, as soon as we close (the IDBI transaction). But we see insurance opportunities for banking clients and banking opportunities for insurance clients and the same for IIFL Capital. We have very good people, we believe in decentralised operations but working together. That’s how Fairfax was built. We see that taking place in IDBI Bank over time.Will you have a holding company structure, you have life, general insurance and reinsurance?Go Digit will be independent. It’ll have a board and will be independently run by Kamesh (Goyal). IIFL will be run by Venkat, Vasu and Nirmal. We weren’t going to change the structure in any way: no change in IIFL Capital, no change in Go Digit.The RBI mandate is to reduce your holding in IDBI to 40% in 10 years and to 26% in 15 years. What will be the dilution plan?We are focused on building the bank. Also, remember that when we began the insurance business it was 26% (FDI cap), which increased to 49% then to 74% and now it’s at 100%. We’ll see what happens in the future. We will go by whatever the regulations are at that point of time.Given the large diaspora in Canada, do you want to use the Canada-India corridor and have some IDBI branches there?No. My focus will be on India first. It has such a big market, 1.5 billion people. There are around 300 million people in the middle class, which is likely to double in 10 years. The US population is around 350 million. So, you go from 300 to 600 million, and there is going to be so much demand for all the services: the accounts, insurance. If you look at Singapore, when Lee Kuan Yew was first elected, apart from real estate, banking was the best investment option, it compounded 20% for the longest time. Once an economy is a developed economy, it doesn’t grow like that. It’s unbelievable how banking is needed. It’s the lifeline for any economy.
