The Hindu Business Line : Down memory lane with P.G. Kakodkar

My 40 years with SBI, an autobiography by Mr P.G. Kakodkar, former Chairman, SBI, has some interesting nuggets on some of the controversial issues in banking during the seventies and eighties. Here are some of them.

L'affaire Nagarwala

Mr Kakodkar writes about L'affaire Nagarwala — a scandal that rocked the country in the early seventies. On May 24, 1971, the Chief Cashier at the New Delhi Main branch of SBI, a Mr Malhotra, handed over Rs 60 lakh in cash to an Intelligence Bureau agent (Mr Nagarwala) based on a phone call, that was purportedly from the Prime Minister, Ms Indira Gandhi. When Mr Malhotra telephoned the PMO and said that he had completed the transaction and was awaiting the cheque for debiting the account for Rs 60 lakh, he found he had been duped. Nobody had any knowledge of the transaction. A panic-stricken Malhotra informed his superiors and lodged an FIR with the police. The police swung into action immediately, managed to trace Mr Nagarwala to a dharamshala maintained by Parsis. The money was found, minus Rs 4,000, which Mr Nagarwala had spent.

Mr Kakodkar writes that there was a hue and cry and the clamour for judicial inquiry never died down. During that time, Mr Nagarwala died in an accident, as did the investigating officer of the case and the renewed calls for further investigations. Finally, both SBI's investigations and a judicial inquiry by Mr Justice Jagan Mohan Reddy concluded that it was simply a case of removal of cash from the bank by the Chief Cashier, who worshipped the PM blindly and fell for Mr Nagarwala's ruse.

Political Interference

On the question of political interference, Mr Kakodkar says, he did not face much interference when he was Chairman. He writes, "During the 18 months that I spent in the Chair, I got very few calls from Delhi to intercede on behalf of an industrialist. I never ever got a call from the Finance Minister, Dr Manmohan Singh, or his successor, Mr P. Chidambaram. I used to get some calls from some MPs or former Congress Ministers who were no longer in power. My usual reply was to request them to send me a small note by fax. Most of the time, I never heard from that person again."

In another part of the book, dealing with his stint in the SBI Mutual Fund, there is a little more indication of political pressure. He writes, "There was a politician who was Minister of State for Finance — I forget his name now — who used to behave as if he was a big merchant banker. He would occupy one of the special guest rooms in the Udyan building, call the chairpersons of various banks, and force each of them to buy Rs 5 crore worth of shares of the Nova Group. In return, I was told, the Nova Group people were helping his wife contest the elections from Rajasthan. Both the Chairman, Mr Basu, and I faced similar pressures."

Handling Trade Unions

Mr Kakodkar writes that he was posted to Calcutta Main Branch (that had a total staff strength of 2,400) in June 1981, as a "punishment posting" since he had earlier been posted to Paris and had asked to be allowed to come back. He writes, "I visited every department and I found they were all filthy. The security officer stayed on the premises and there were 64 sweepers, enough to sweep the whole of Calcutta! Every day, I found that the recently painted building was littered with all kinds of posters. Union activists are good at painting posters, and even better at covering every wall with them." Finally after threatening the security officer with suspension, Mr Kakodkar managed to have the posters removed.

Mr Kakodkar writes further about how he had to implement attendance rules sternly. He says, "Football was very popular in Calcutta and some of the matches started at 11 a.m. One day, I found that all the staff who had reported for duty at 10 a.m. seemed to have vanished, obviously to see the game. I told the Personnel Officer to mark all of them absent, but he was afraid of the union and didn't do it. So I called for the musters and personally marked everybody absent. When the union people came to confront me, I told them that even in Moscow, the headquarters of communism, the rule is: "No work, no pay". ... The Bank is the master and my job is to follow its will. If the Bank asks me to send your salary to your residence even when you are not working, I will do it." Mr Kakodkar says, the unions understood, and did not do anything — but they had got the message.

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Down memory lane with P.G. Kakodkar