Narayanan Vaghul, a doyen of Indian banking who was instrumental in bringing up ICICI, passed away today at his residence in Chennai. He was 88. Vaghul is survived by his wife, son and daughter. 

A banker par excellence, Vaghul, who received the Padma Bhushan award in 2009, was the youngest Chairman of a bank when he helmed the Bank of India at the age of 44. 

Joining State Bank of India — where the then Chairman of the bank, RK Talwar, took a liking to him and took him under his tutelage — Vaghul impressed everybody with his work and practically became everybody’s blue-eyed boy. When Bal Thackeray’s Shiv Sena agitated against South Indians in top positions in SBI, Vaghul was slung into academics, for a teaching position at the National Institute of Bank Management. Again, so impressed were the authorities with him that he soon became the Director of NIBM when he was still in his mid-30s.  

From there, he became the executive director of the Central Bank of India when he was 39 and then the Chairman of the Bank of India. When Prime Minister Rajiv Gandhi was made aware of Vaghul’s talents, he got Vaghul into ICICI (the Industrial Credit and Investment Corporation of India), to which institution Vaghul’s name is indelibly attached. 

Turning point

Born in 1936, Vaghul grew up in a large family with six brothers and a sister and had his early education at the Hindu High School in Chennai and later at the Ramakrishna Mission School, Chennai, before going to Loyola College for his graduation in commerce. In an interview with Harvard Business School in 2017, Vaghul described how he serendipitously got into banking. His ambitions lay in civil services, but he (a post-graduate at 19) narrowly missed the age threshold for writing the civil services exams. Instead, a non-serious application to the State Bank of India got him a job there. It wasn’t long before Vaghul’s talents and hard work were noticed by Talwar, who made Vaghul his executive secretary when he (Talwar) became the Chairman of SBI. Mentored by and traveling with Talwar exposed Vaghul to the world of banking.  

Vaghul describes how, as a young director of NIBM, he caught the eye of Finance Minister IG Patel when he (Vaghul) suggested to an irascible Patel to answer Parliament on a ticklish issue. Patel remembered “that young man” when the Central Bank of India needed an able person to steer it out of its troubles. 

Short stint

From there to a new position as Chairman of Bank of India was but a short hop, but Vaghul did not last long there. Frustrated by the “interferences” of the then finance minister, he quit, overruling the protests of the then RBI governor, Manmohan Singh. But after a couple of years — when all he did was to write a column for The Hindu — Vaghul got a call from Prime Minister Rajiv Gandhi’s office (believed to be at the behest of Manmohan Singh) with an offer for the position of Chairman and Managing Director at ICICI, a position he held between 1985 and 1996, and continued as its non-executive Chairman till 2009. 

During his years, the Indian economy changed and in tandem with the changes, ICICI morphed from a development finance institution, giving long-term loans for large projects, to a commercial bank. ICICI, which merged into its subsidiary, ICICI Bank in 2002, set up (along with other entities) many enduring institutions, including the Crisil (of which Vaghul was the first Chairman) NSE and NCDEX. 

Vaghul’s passing has left a void in the hearts of many. S Venugopal, one of Vaghul’s long-time friends who was with him till Saturday, observed that “in good times and not-so-good times, Vaghul was always available to lend a shoulder to cry and laugh”

Humour, one of Vaghul’s defining traits, has been commented upon by many. “His wisdom and humour were a rare combination that made him invaluable to family and friends.” 

Congress leader Jairam Ramesh has said that he would “fondly remember his wonderful sense of humour.” In his post on X, Ramesh noted that Vaghul “played a crucial role in the financial sector reforms initiated by Manmohan Singh as the finance minister” and that Vaghul would be “remembered most for his impactful tenure at ICICI”.