Sanjiv Bajaj: 'Fortunately, We've More Companies Than Family Members'

'We strongly believe that anyone with capability and a strong work ethic should have a chance at the top job.'

Sanjiv Bajaj, chairman and managing director, Bajaj Finserv, has led Bajaj Group's aggressive expansion into financial services, building Bajaj Finance into one of the country's largest non-bank lenders and establishing its insurance ventures among the leading players in their segments.

In a conversation with Manojit Saha and Subrata Panda/Business Standard in Mumbai, Bajaj outlines the group's ambition to take Bajaj Finserv to every middle-class household in India over the next five years and build it into the country's 'best' and one of its largest financial conglomerates.

Things have changed rapidly, particularly on the technology front, over the past 10 to 15 years. How did Bajaj Finance adapt to the changing world?

Our focus was always on customer differentiation. The challenge for us was how to stay ahead of the curve. We realised that every time we set up a branch, it added costs.

So we had to find a Cloud-enabled solution. In 2008, we approached Salesforce -- when most people had not even heard of Cloud technology -- because they had a Cloud-based customer relationship management (CRM) solution.

We wanted to convert that CRM solution into a loan origination platform. That is why today, if you look at even the best banks, their cost-to-income ratios are 43-44 per cent, while ours is 34 per cent.

Bajaj Finance adopted artificial intelligence much earlier than others. What productivity gains have you seen?

During the third and fourth quarters of 2025-2026, we added 2 million customers because of AI.

Using the AI tool, we found that some customers had asked for loans, but the call centre executive either did not understand the accent, failed to follow up, or missed something in an email.

We identified customers seeking fresh loans through those interactions. We checked our systems and realised they already had pre-approved loans.

We issued 100,000 additional loans in Q3 and Q4 purely from this data. The AI tool is able to pick up information from a wide variety of internal data sources that the human eye may miss.

We still have human verification in place. AI can also help assess risk better.

How are you dealing with AI risks?

At the last board meetings of Bajaj Finance and Housing Finance, we adopted our first AI governance code.

We have already engaged with major AI partners. Some have explained the solutions they are developing to combat situations like Mythos.

What is the plan for your insurance ventures, now that you have complete ownership?

Both our companies aim to be among the leaders in their fields. Bajaj General Insurance has had the lowest combined ratio in the sector for the past 20 years.

We are among the top three players, and in many lines of business we are No. 2.

The difference between No. 1, 2, and 3 is that we are consistently very profitable at No. 3.

We balance the top line and bottom line rather than focusing only on growth.

In life insurance, the lower ranking is largely because most policies are sold through banks, and large banks prefer to keep the business within their own insurance companies.

Over the next two years, Irdai is implementing new accounting standards for insurance firms, which will change accounting practices.

So we do not think it is appropriate to list now when retail shareholders may suddenly see very different accounts within a year or two.

There is another element as well. Today, the solvency margin is calculated very simply at 150 per cent of the required amount.

Globally, the more sophisticated approach is risk-based solvency -- if you introduce riskier products, you must hold more capital, similar to the Reserve Bank of India norms for banks.

Irdai is also in the process of introducing that over the next year or two. So we will let these things settle.

Your businesses are family-owned but professionally run. How do you maintain a distinction between the two?

The roles of the board, the CEO and the family all have to be very clear. Our CEOs are fully empowered to run the businesses on a day-to-day basis.

The board and family members on the board focus on whether the businesses are headed in the right direction.

What are your plans for your other businesses -- the asset management company, broking, and other verticals?

Our plan is that whether the customer comes through digital or physical channels, Bajaj financial products and solutions should be available seamlessly.

That is why we have the broking digital platform, the digital health platform, and the marketplace platform.

Have you done succession planning?

We are already in the fourth generation. My brother Rajiv's children and my children -- Siddhant and Sanjali -- are already working in the businesses.

One of them is at Bajaj Finance, while another is at Bajaj Alts. My brother's son is at Bajaj Auto. Our role is to provide the best education and exposure to the next generation.

There is no pressure on them to join the businesses. We strongly believe that anyone with capability and a strong work ethic should have a chance at the top job.

Fortunately, we have more companies than family members, so succession pressure is lower.

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Feature Presentation: Aslam Hunani/Rediff