Rana Kapoor often says that when a partner and he founded Yes Bank in Mumbai in 2003, it was the only private bank to be licensed by the Reserve Bank of India in 12 years. In the past three years, Yes Bank has seen rapid growth, spurred in part by what Kapoor describes as its entrepreneurial culture — the bank’s founders and managers own a significant chunk of equity.

As a relatively new player in the field of Indian banking, how does Yes Bank intend to compete against much larger rivals? According to Kapoor, Yes Bank’s strategy has several “late-entrant advantages,” such as using technology creatively. “We look at technology as the bank’s center of gravity,” Kapoor notes. Yes Bank’s approach involves outsourcing non-core applications to Wipro, and hardware services to IBM and Cisco. “It is akin to a just-in-time, pay-by-use model,” he says. The result, he adds, is that Yes Bank has been able to “build scalability at a fairly effective cost.”

Kapoor discussed these issues and more in an interview with India Knowledge at Wharton during the Wharton India Economic Forum in Philadelphia.