'Reflections' review: Tracing events and moments that shaped financial landscape of India

Banks and financial institutions have played a pivotal role in fuelling India's


Banks and financial institutions have played a pivotal role in fuelling India's economic growth. But, the journey has been full of ups and downs, from the nationalisation of banks under prime minister Indira Gandhi in 1969 to establishing of large development financial institutions in the 1980s to the emergence of private sector banking behemoths in the 21st century.

One person who perhaps had the best vantage point into this evolution was Narayanan Vaghul. Born in Chennai in 1936, Vaghul started his career as a probationary officer in State Bank of India in 1957, became the youngest chairman and managing director of Bank of India in 1981 when he was just 44 and would later become the chairman and MD of Industrial Credit and Investment Corporation of India (ICICI).

Under his leadership over two decades, ICICI transformed from a development financial institution to one of the largest commercial bank in the country.

The Padma Bhushan recipient has had an illustrious career and the book, Reflections, penned by him gives a sneak peek into the life of the eminent banker that he was. He never wanted to write a book; the task of writing a memoir was an "anathema" to him, says Vaghul. But, Ajay Piramal, the chairman of Piramal Group, eventually persuaded Vaghul, who had been on the board of directors of Piramal.

The book carries a vivid account of pivotal moments that shaped the financial landscape of India. Vaghul doesn't bore the reader with mundane write up of events like a history book. The banker becomes a story teller here and shares many anecdotes through which the readers gets a glimpse of the hot and cold relations between bankers, politicians and bureaucrats. The pressures that public sector bankers faced from their political masters and well connected clients flows through the book.

He narrates an incident where a borrower was aggressively pursuing a proposal to set up a chemical project. ICICI executives discussed the project, and were not happy with the borrower's credentials and decided to turn it down. The chief minister of the state where the project was planned called him up several times and even sent the personal secretary to Mumbai to persuade Vaghul to reconsider the decision.

There are several instances in the book, where we read about chairpersons of PSBs, including him, getting called directly by bureaucrats in the finance ministry and sometimes finance ministers themselves to reverse decisions taken regarding certain loans to certain people.

Barring a few instances, though, Vaghul doesn't name the people involved, and that is perhaps disappointing.

Vaghul said he decided to use his discretion and avoided naming them if the incident reflected "poorly" on them.

"I do not wish to hurt anybody's reputation, and I do not carry any ill towards them. I also do not wish to be judgemental about other people's conduct... My aim is to illustrate a point rather than to convey a holier-than-thou attitude," wrote Vaghul.

In some cases where he does name names, we see that not all politicians are painted in bad light. One person he especially mentions is Madhu Dandavate. The former Union finance minister had defended Vaghul and ICICI in the Parliament in a high-profile case.

The book also has a few humorous incidents. One incident talks about an annual conference of ministers of industries of state governments, where one minister ended up reading the speech of the other.

"The comic nature of the situation, where a minister had unwittingly read out the speech of another, which did not even concern his own state, and that the rest of us had not even noticed the mix-up slowly dawned on the participants."

Vaghul also doesn't shy away from talking about mistakes that led to lost business opportunities. Once an industries minister called him and introduced his friend's son, who had a project proposal. The ICICI Bank executive told him it was not worthy of support.

"I merely saw it as an affirmation of my belief that proposals routed through political system were ab initio flawed. I did not bother to look at the proposal myself, but told the minister that it would be difficult for ICICI Bank to consider the proposal favourably," he narrates.

The said client managed to raise funds from another bank and became very successful. Later on when Vaghul studied the appraisal note on the basis of which the proposal was rejected, he found serious flaws in the way it was processed.

"This experience taught me an important lesson - it was foolhardy to approach an issue with preconceived notions."

There are instances in the book that do show Vaghul's ability to deal with pressures, convince even ministers and bureaucrats and get things done, by sternly, albeit politely putting across his arguments.

As one reads the book, it will also be clear that Vaghul was a man of principles. Once when his wife and two children arrived from Chennai to Mumbai by train, a ticket examiner started arguing that the daughter who was travelling on a half ticket, appeared older than 12 years old. Vaghul could have settled the matter by paying Rs 20 to the examiner. But, he paid the penalty, which was double the fare and then made half a dozen trips to the railway headquarters to get Rs 60 refund.

The entire book flows through such stories and episodes, and the incidents are not necessarily in order.

Vaghul fostered a gender-neutral meritocracy at ICICI Bank. Under his mentorship many women like Kalpana Morparia (who was joint MD at ICICI Bank and later became chairperson of JP Morgan South and south east Asia), Shikha Sharma (who later became the MD and CEO of Axis Bank), Lalita Gupta (retired from ICICI Bank as joint MD) and Renuka Ramnath (now the founder of Multiples Alternate Asset Management) went on take leadership roles. A few incidents and anecdotes during those times at ICICI would have been interesting.

Vaghul also was the one who introduced the concept of credit rating in India and established CRISIL in 1987. More details on what went behind this move and how things unfolded would have also been fascinating.

The way Vaghul narrates the various incidents, the anecdotes, the humorous episodes, make for exciting reading. Reflections by Narayanan Vaghul is published by Piramal Enterprises.

Book: Reflections

Written by: Narayanan Vaghul

Published by: Piramal Enterprises

Price: Rs 950

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