On April 30, N Kamakodi, Managing Director and Chief Executive Officer of City Union Bank (CUB), will step down from the 121-year-old institution. His departure marks the end of a 15-year journey that saw the private sector bank transition from manual processes to a technology-driven model, while maintaining a focus on asset quality and disciplined expansion.
Over these years, the bank navigated change with consistency, preserving its conservatism even as it modernised. In an interview, Kamakodi, a third-generation member of the bank, reflected on his early years, challenges from sectoral crises, the arc of technological transformation, and the road ahead.
Early Years at CUB: Key Challenges
When Kamakodi joined in June 2003, the environment was challenging. The economy had emerged from a slowdown, and tighter prudential norms, especially around non-performing assets (NPAs), had pushed asset quality across the banking system into double digits. City Union Bank was no exception. The bank's technology journey had barely begun. It had around 125 branches, many in rural areas without basic connectivity such as optical fibre. Several branches still operated on physical ledgers, while others had rudimentary, standalone computerisation. Core banking was yet to be implemented. The bank had expanded its branch network for nearly a decade without increasing headcount. The same employees handled higher volumes, and many senior executives, who had joined well before Kamakodi was born, were deeply rooted in traditional systems. Adapting to technological change was a generational challenge. The task was not just operational but cultural. Authority had to be earned. It took nearly a decade to align the organisation and bring everyone along on the transformation journey.
Impact of Father's Passing
Kamakodi's father, who was the chairman of CUB, passed away in a road accident in November 2004. The loss left a lasting impact, with some scars remaining even today. Institutionally, his father's foresight stood out. He had put in place a strong succession framework and embedded decision-making processes. The bank continued to function with remarkable stability. For nearly a decade after his passing, decision-making within the bank was guided by a simple question: "What would he have done?" That level of alignment and clarity was extraordinary. His greatest legacy was building an institution that could function seamlessly even in his absence.
Navigating Disruptions Over Two Decades
The bank has navigated wars, economic crises, and industry downturns, ingraining a strong risk management culture. After 2003, CUB faced several disruptions, including the 2008 global financial crisis, the asset quality review (AQR) phase, commodity shocks, demonetisation, GST implementation, and the Covid-19 pandemic. Each phase reinforced the bank's calibrated approach. One example was the reversal in the 10-year bond yield cycle in 2004. Many banks were caught off guard. CUB recognised losses early and exited positions, avoiding larger setbacks. Similarly, during the corporate lending boom, the bank stayed away. Even one large default could have wiped out annual profits. This proved critical when corporate stress peaked after 2014.
Geographic Identity Evolution
The bank was long seen as Tamil Nadu-centric. Kamakodi noted that CUB is proud of its roots. When the bank opened its 975th branch in Kashmir, it described its journey as "from Cauvery to Kashmir." While Tamil Nadu remains a stronghold, most incremental expansion is now outside the state. CUB has built a presence across southern states and gradually in northern and western India. The strategy has been to enter markets with strong business linkages to Tamil Nadu. This helped establish a presence in places such as Ludhiana, Rajasthan, and Maharashtra, where customers were already familiar with the bank. Today, CUB is evolving into a pan-India bank with strong southern roots, with the Northeast identified as a future opportunity.
Financial Growth Assessment
CUB's net worth recently crossed the 10,000 crore mark. Kamakodi stated that the bank has never aimed to grow significantly faster than the industry. Excessive growth often comes at the cost of asset quality. The approach has been to grow slightly above the industry while strengthening fundamentals. Market share gains have been modest but achieved without compromising risk. More importantly, the bank focuses on balanced outcomes, ensuring all stakeholders benefit over the long term. Sustainable growth matters more than headline numbers.
Road Ahead for the Bank
Kamakodi sees the bank entering one of its strongest phases. Asset quality is robust, technology is firmly established, and the workforce is future-ready. Much of the past two decades has been about building the foundation, and the benefits will become more visible in the coming years. With his successor already part of the leadership team, the transition will be smooth. Earlier constraints, especially around technology, no longer exist. The best of the bank is yet to come.
