Can a book on banking excite any reader, unless he is a banker himself? The subject would probably be considered boring. One goes to a bank either to deposit money or to withdraw it. So what’s great and attractive about the subject? Some banks collapse and are heard of no longer unless depositors haul them to court. Some get amalgamated with bigger banks and soon get forgotten. One mostly takes banks for granted. Like money-lenders in the past, they exist, because in any economy they are needed. They impinge in one’s memory only when they get bankrupt, get closed down and puts hundreds of their clients into deep misery. There a sad and pathetic story ends. Thousands are driven to desperation and if they murmur hardly anyone listens to them.
This is the story of a bank that was almost on the verge of collapse. Rumours were going round that it would either be closed down or, as is standard practice in such cases, get amalgamated with a larger, stronger bank. It was founded, interestingly enough, on August 15, 1917, exactly three decades before India became a free and Independent nation. It had a strong base in south India. It had mass support and an excellent and committed client base as well. It had grown to be strong in the 1980s, judged by any professional parameters. It was additionally considered to be a success story of nationalisation. Then it happened. Everything seems to have gone wrong. The bank got over extended and the shortfall had to be met from inter-bank call money market mainly on a day-to-day basis and often at high cost. The Reserve Bank of India got wind of what was going on and issued cautionary advices which the bank’s top management ignored. Borrowers started defaulting. For the first time in decades, in 1995-96 the bank reported an unprecedented net loss of Rs. 1,336.40 crore, wiping out its net worth! Gross NPA (Non-Performing Assets) shot up to an incredible figure of 44 per cent. Something had to be done, at once, immediately, and desperately.
The Government took over the bank and appointed a woman, Ranjana Kumar, as its Chairperson and Managing Director. Ranjana Kumar had a strong banking background. She was the first woman officer in the Public Sector banks to hold a top post. She had started her career way back in 1966 with the Bank of India. But to try to resurrect a bank with failure writ all over its face? Many said: “She is just a woman, poor thing. This is a punishment post, Wait and see”. Customers, depositors and other waited with bated breath. Ranjana Kumar started in right earnest. It was she who had offered to run the bank when it was at its lowest point. Many thought that she was crazy! But she was not one to give up a fight. As she put it in her book A New Beginning: “A smooth sea never made a skilled mariner”.
Ranjana Kumar was determined to show to everybody concerned that she was a skilled mariner. Quickly she got down to work. She found that the staff was “one of the strong points of her bank” which needed to be enthused for the turnaround strategy she had planned, to succeed. She met all officers right down to branch managers in rural areas covering some 500 branches right across the country. She sought to develop mutual trust and confidence between the top management and staff and between staff and customers.
Once she was asked by a reporter why she had chosen Indian Bank to manage. It was not that the Government had forced her to accept the assignment. She had ventured to take it of her own free will. Her reply was: “Why not?” She worked on the theory once propounded by Ralph Waldo Emerson: “Trust men and they will be true to you. Trust them greatly and they will show themselves great”. She writes: “We never discussed the past in terms of individuals, their actions etc. I was clear that our mandate was to restructure and strengthen the institution and not sit on judgement as to who did what and why. My approach was to focus on systems, politics and strategies to enable the bank to move ahead”.
The past was relevant only to the extent that one did not repeat the wrong doings. She put sycophants in their place. She sought to focus on retail banking. That meant that amounts leaned were smaller, and the spread, better. Recovery rate was satisfactory. A fear psychosis had swept across the bank and this had to be washed away. A workable Restructuring Plan had to be devised and this was quickly formulated. Staff cost had to be pruned, and steps were taken in this direction. Customer Service received top priority. Good work was acknowledged and, what is more, rewarded. Clerical staff had to be encouraged and a fresh promotion policy was worked out.
The tasks were endless but Ranjana was not to be discouraged. Once Dr A P J Abdul Kalam asked her what the state of her health was when she was faced with fighting problems of unknown proportions. Ranjana said she was in great shape throughout the period of stress. Dr Kalam told her: “When one is committed for a purpose, energy levels are always high!” She had taken charge of the bank in May 2000. She served the bank for a fairly short period of three years and seven months. By that time the bank had regained its strength and was able to stand on its own feet. A miracle had been wrought! A miracle?
According to Ranjana Kumar it was all a question of purposeful work managerial lead, team spirit soaring morale and courage of conviction. The bank was overstaffed. She introduced a Voluntary Retirement Scheme under which as many as 1,300 staffers were relieved. That was so much burden less. Discipline was enforced. Both Head Office and Regional Offices were told that they not only had to improve monitoring but to be ready to support branches when that was needed.
A training mechanism was put into service to improve the competence of the workforce. Staffers were told not to indulge in gossip about the bank’s rating. Promotions were regularised. Ranjana Kumar had but one aim and one vision to revitalise the bank. As she put it: “Every bank has a soul which can’t be dstroyed”. And she proved it. As one admirer said: “Not bad going for a Kashmiri Indian Air Force Officer’s daughter who had become a Kathak dancer and banker and married a Hyderabad-based north Indian businessman!” As a narrative, this book is gripping. What it showed was that where there is a will, there is a way!
(Tata McGraw Hill, B-4, Sector-63, Noida-201 301)
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