To go from good to great, you have to transcend the curse of competence. It takes discipline to say, “Just because we’re good at it, just because we’re making money and generating growth, doesn’t mean we can become the best at it. The good at big companies have figured out that doing what you’re good at will only make you good; focusing only on what you can potentially do better than any other organization is the only path to greatness.

That’s how author and leadership expert Jim Collins sums up building a great business in his book, Good to Great. Although published 21 years ago, the book’s lessons are timeless, all the more so in the context of Fortune India-Grant winner Thornton Bharat’s inaugural annual study of India’s top banks for 2022.

The HDFC bank needs no introduction. The 27-year-old is the country’s largest private sector lender by assets (₹20.68 lakh crore) and the largest bank in India by market capitalization (₹7.45 lakh crore). But as the saying goes – beauty is in the eyes of the beholder – what’s good for some may be great for others. For an investor, a compound annual growth rate of 25% since 1995 is great, for a customer, the bank will be good, and for the regulator, ahem, the bank is just a national systemically important bank, everything like State Bank of India and ICICI Bank.

As a domestic systemically important bank, an entity is not only subject to higher capital requirements, but also to stringent regulation. Call it a travesty of fate that in all the years Aditya Puri was at the helm, the bank did not come under the wrath of the regulations. But as he neared retirement in October 2020, a series of hiccups – November 2018 (mobile app crash), December 2019 (firewall security issue) and November 2020 (data center power outage) data), besides the car loan scandal in July 2020, meant that the new CEO had his hands full.

Barely a month after 55-year-old Sashidhar Jagdishan took office in December 2020, the regulator banned the bank from launching new products and seeking new credit card customers until it corrects its digital flaws. Jagdishan, who has worked for the bank since 1996, humbly acknowledged the regulator’s concern and was candid enough to admit to shareholders and customers that the rap was a good thing.

Instead of engaging in PR overdrive, Jagdishan opted to stay out of the spotlight and focused on solving the problem. Its efforts have paid off – the regulator in August 2021 lifted the ban on issuing credit cards and, finally, in March paved the way for the bank to embark on its Digital 2.0 initiatives.

Unlike his predecessor who was more outgoing, Jagdishan prefers reticence. “I believe institutions are built by a team, not an individual,” he told Fortune India.

This cultural approach has complemented strong risk management, allowing the bank to grow at a remarkable rate over the years. Not surprisingly, despite the regulatory rap, the bank’s market capitalization increased by 30.4% between FY19 and FY21. It was also the most valuable bank with a market capitalization of ₹8.23 lakh crore at the end of FY21. The growth momentum continued as the loan portfolio jumped 20.8% to reach ₹13.7 million in FY22.

By meeting five of the six parameters of the study, the bank rose to the top spot among the largest banks in the country with a balance sheet size of more than ₹5 lakh crore, and in doing so, Jagdishan became the “banker of the ‘year”. ”

HDFC Bank’s success is largely based on retail loans, which constitute 39% of its loan portfolio. In the early years, business lending was all the rage, and it wasn’t until the late 2000s that retail came of age. Not only did the bank build a strong liability franchise by tapping into the emerging working class, but it also spawned the same customer base with products such as personal loans, credit cards and auto loans. The strategy paid rich dividends as infrastructure-focused lenders were hit by bad debt in the ensuing recession, while HDFC Bank stood unscathed with its clean book.