The Imperial Bank, Rama Rau, And Other Stories

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: In recent times, Standard Chartered Bank (StanChart), HSBC, and Citibank have gone to town over their 100 and more years of banking in India. Of this threesome, StanChart and HSBC, have a history of 150 years in the sub-continent. All this makes for interesting reading, intertwined as they are with the days of the Raj.

Few Indian banks give a like historical chronicle. But the State Bank of India (SBI) did so with its ‘Evolution of The State Bank of India’ (Volume 3 -- The Era of the Imperial Bank of India: 1921-1955). The publication traces the time-period from the formative years of the Imperial Bank of India to the birth of the modern-day SBI.

Sifting though the book, there are times when one gets the feeling that SBI is caught in a time-warp.

Just sample this on the status of its associate banks.

The chapter on ‘State Ownership: From Imperial Bank To State Bank of India’ says that All India Rural Credit Survey had envisaged one large state-owned bank with the merger of the proposed SBI and the major state-associated banks. The Centre was for the immediate takeover of these banks by SBI in 1955, but the then Reserve Bank of India governor, Rama Rau, was of the view that the new bank should not be "burdened" with this responsibility "for an initial and reasonably long period." These banks were then constituted as "subsidiaries" (associates later).

Almost 50 years on, SBI, its associate banks, and talks of merger -- of associate banks and/or with SBI -- continues to be current. Even Mr Rau must not have meant this when he made his "for an initial and reasonably long period," statement!

Again, a subject of particular concern to the RBI today -- frauds -- was a big bother back then too. The chapter on ‘the Imperial Bank In The New Era: 1947-1955’ refers to a circular issued by managing director, AR Chisholm, in 1952 on the "disquieting increase in irregularities."

Or for that matter efficiency. Wrote Mr Chisholm: "... to those others, however, who are obsessed by self-pride and from a mistaken sense of their own importance and are far too lazy ever too leave the precincts of their rooms, we would again state that we shall not hesitate to take the most drastic measures to bring their responsibilities home to them."

Some things never seem to change in banking.