Business

Unforgotten Brands: HDFC

Hasmukh Thakordas Parekh, fondly known as Hasmukhbhai, was born in 1911 in Surat. His early life in a Mumbai chawl, where he lived with his father, was marked by modesty and hard work. To support himself while pursuing his education, Hasmukhbhai worked part-time jobs. He graduated in Economics from Mumbai and earned a B.Sc. in Banking and Finance from the London School of Economics.

Hasmukhbhai’s father imbued him with the spirit of banking, but his mother’s deep influence and self-effacing character truly shaped his values. Growing up in the Gandhian era further instilled in him a philosophy centred on simplicity, integrity, and service to others.

Upon returning to India in 1936, Hasmukhbhai began his financial career with the stockbroking firm Harkisandass Lukhmidass. Concurrently, he was a lecturer in Economics at St. Xavier’s College in Mumbai for three years. His two-decade tenure at the broking firm was invaluable, providing him not only with foundational lessons in business but also contributing significantly to his personal growth.

During this period, Hasmukhbhai continued to study and write about various aspects of the economy, economic policy, money, and banking, and he actively participated in public discussions. His academic and professional pursuits reflected a deep commitment to understanding and improving the financial sector.

ICICI

In 1956, Hasmukhbhai joined ICICI, one of the earliest institutions sponsored by the World Bank in cooperation with the Indian and U.S. governments. His friend William Diamond, a development official at the World Bank, had defined development finance institutions as “profit-making but service-oriented.” This concept left a lasting impression on Hasmukhbhai, who became determined to align ICICI with this ideal.

Starting as Deputy General Manager, Hasmukhbhai became Chairman and Managing Director of ICICI in 1972, and after retiring in 1976, he continued to serve as Chairman of the Board until 1978. Under his leadership, ICICI embodied his vision of a development institution that not only generated profits but also used its resources for broader societal development, fostering skills, institutions, and initiatives that deserved encouragement and support.

Creating HDFC

At 65, when most people consider retirement, Hasmukhbhai embarked on a new venture. In 1977, he founded the Housing Development Finance Corporation (HDFC), inspired by his observations in England, where homeownership through mortgages was common. He dreamed of enabling similar opportunities for Indians. To realize this vision, he sought support from the then Secretary of Finance, Dr. Manmohan Singh. Despite initial scepticism about this novel idea, Hasmukhbhai’s reputation and the promises of foreign funding garnered support from multilateral organizations and the Union Government. Dr. Singh, though not providing direct government support, advised government financial institutions to back the initiative.

Hasmukhbhai’s management style was characterized by a keen eye for talent, nurturing professionals through direction and learning opportunities, and a deep belief in teamwork. He instilled values not through instruction but by example, demonstrating large-heartedness and human considerations in his leadership. He championed financing new entrepreneurs long before venture capital became mainstream and advocated for a Common Asian Market years before such ideas gained popularity.

Other Ventures

Beyond HDFC, Hasmukhbhai made significant contributions to various sectors. He was the first to float a private firm, Hindustan Oil Exploration Company, to explore India’s oil potential. In 1986, he established the Gujarat Rural Housing Finance Corporation Limited (GRUH) to provide rural housing finance in villages and small towns, further extending his vision of development and service.

Hasmukh Thakordas Parekh’s life and work left an indelible mark on India’s financial landscape. His dedication to service, innovation, and ethical leadership continues to inspire and guide future generations of entrepreneurs and finance professionals. His legacy is a testament to the profound impact one individual can have on the economic and social fabric of a nation.