I am one of those bank employees

who vociferously demanded the nation-

alisation of banks during late 'sixties.
Inspired by Marx and thoroughly brain-
washed by our trade union leaders, n'e
vvere thrilled when major banks were
nationalised. The fact that veteran
politicians like Morarji Desai r,r'ere
opposed to the idea seemed to add
further charm to this development.
Today, however, there is no disputing
fact that the nationalisation of banks
was a big mistake. The '.'ery fact, that
the same party has mooted the idea of ,
privatisation of banks' is an admission
this mistake, although one cannot
expect them to say so in as many words.
When this much awaited develop-
ment took place, senior bank executives
were taken by surprise. At this stage,
new entrants were clearly at an advan-
tage. They had only to learn, whereas,
the experienced ones had not only to
learn a great deal, but simultaneously
unJearn quite a bit as well. Old values
had to be quickly replaced by ne\^r ones
and in many matters, a virtual U-turn
had to be executed. Whereas these
executives were conservative by nature
otherwise their talent would never have
been identified and recognised by ear-
lier managements, the changed situa-
tion not only demanded that tl'rey shed
their'conservatism', but also pursuade
and motivate their subordinates to do
likewise. The latter was easier to ac-
complish, after all a few well rehearsed
speeches and lucidly drafted circulars
were all that rn'as necessary for this. But
then, the former, viz. chanpSing their own
attitude lvas indeed more easily pro-
fessed than practiced. This aspcct re-
flectecl in their actit'rns and in their
decision-making, r.r'hich effectivcly con-
fused tl'reir subordinates.
While the (ideal) banker we dreamt
loomed large on the horizon, forever
keeping thc. same clistancc' (as in a
April-June 1996

magnificient mirage), a series of meas-

ures taken by the Government resulted
in the creation of a system of political
appointees as Chairmen of the various
nationalised banks, to do theirbidding.
These Chairmen, who had not grown
with the institution they were heading,
and owing Ioyally to theirpoliticalbosses
started setting stiffer and stiffer targets
for their juniors and embarked on a plan
of indiscriminately opening branches
with utter disregard to business poten-
tial oravailability of suitable manpower.
These ner.r'ly opened branches, often
without basic amenities, were called
upon to disburse loans under various
'Poverty Alleviation Schemes' conceived
by the party in power.
A new cult developed in which
progress began to be measured in terms
of Branches opened and loans disbursed.
Soon, senior executives accountable to
the Chairman, devised various meth-
ods to hoodwink'politicians' by resort-
ing to misreporting. This they accom-
plished by verbally telling those work-
ing under them to exaggerate figuresby
reporting the same loan under different
heads! In this charade, both the parties
concerned knew and appreciated each
other's position. Meanwhile, the'party
in power', with an eye on the vote bank,
started looting the Banks in the name
of 'Loan Melas'. More than the amounts
actually lost by Banks in this manner,
the campaigning and publicity that
preceded these'Melas' had a demoral-
ising effect on the minds of small bor-
rowers and this turned out to be disas-
trous.
It is intc'resting to see how attitudes
havc' changcci over the last 25 years.
Whereas the success of a Bank manager
ne'cessarily depended on the soundness
of aclvances recommerrded anrl / or sanc-
tioned by him, today the emphasis has
shif te'd from soundness of the advance /
s to paper \^'ork that has gone into them.

Whereas a bad advance with good paper

work is tolerated, a good advance with
inadequacies observed in paper work
is considered intolerable. Needless to
mention, a corrupt Manager, almost
always is good at paper work. Just as
a murderer would not like to leave
behind any trace of evidence of his foul
deed that could lead to his arrest, so too
a guilty person, would not like to leave
any procedural formality incomplete,
lest he be caught. The history of various
banks is replete with instances of honest
managers being penalised and corrupt
managers getting out of turn promo-
tions. Such instances occuring at regu-
lar intervals prompted the shrewd and
ambitious ones to quickly adapt them-
selves to thechanged environment. This
yielded results as such persons' ascent
of the hierarchal ladder was rapid. Today
a bank manager is concerned about his
own job security. Earlier, this was not
the case. The banker would give indi-
vidual attention to his borrowers and
employ his'judgement'. Today'judge-
ment'has no value at all. This has more
or less been replaced by 'norms'. Is this
what we had hoped for in a banker,
when we were demanding the nation-
alisation of banks? I wonder.
With nationalisation, one expected
more success stories like'Lijjat Papad'
and 'Lakhani Shoes', where an entre-
preneur has all the attributes required
of him for success, except money, which
the banks could alu'ays provide. One
expected the banker to change his at-
titude from that of a 'lender' to that of
a'financial partner'. Where the borrower
is in need of funds, one exPected the
mana ger to stretch himself even beyond
his delegated powers, to assist a Senu-
ine entrepreneur.
Whcn 'rttlc's' are implemtlnted in
il government agency or a nationalised
bank, we do so, going strictlY bY the
rvorcl, almost ahvavs ignoring the spirit
Freedom First 31