Narayanan Vaghula. File image. | Photo credit: Bijoy Ghosh
Narayanan Vaghul, legendary Indian banker and founder-chairman of ICICI Ltd, died in Chennai on May 18 due to age-related ailments. He was 88 years elderly.
Mr. Vaghul is survived by his wife, Mrs. Padma Vaghul, children Mohan and Sudha and grandchildren Sanjay, Kavya, Anuv and Santosh.
Narayanan Vaghul was born in the pre-independence era in 1936 in rural southern India. His family moved to Chennai (then Madras) where he studied at the eminent Loyola College. Banking was not Vaghul’s first career choice. He initially wanted to join the civil service, but failed at his first attempt. However, he passed the examination and joined the newly established State Bank of India (SBI), which, as he later noted, he tried as a “practical test”. His father then persuaded him to take up a job with SBI and he joined the bank in 1955.
He later left SBI due to intense political pressure. He was described as uncompromising and candid to the core.
At SBI, he met eminent banker RK Talwar, who shaped his life and banking career. After SBI, he joined the National Institute of Bank Management, where he later became its director.
At the age of 39, he rose to novel heights when he was offered the position of Executive Director at the Central Bank of India. He then moved to Bank of India in 1981 as its Chairman and Managing Director. At the age of 44, he was the youngest CEO of any public sector bank.
From 1981 to 1985, he headed the development bank ICICI Ltd. as its president and CEO. It was under his leadership that ICICI Ltd transformed itself from a development bank into the second largest private sector commercial bank in India.
He also wrote for This Hindu on economic issues.
A novel era of Indian banking
He is credited with laying the foundation for a novel era in Indian banking by creating a universal banking model to meet the needs of various customer segments. He introduced the concept of credit rating in India and founded CRISIL in 1987.
He mentored many professionals who dominated banking for decades. These include KV Kamath, Kalpana Morparia, Shikha Sharma, Renuka Ramnath to name a few. It was he who introduced and aggressively promoted gender-neutral hiring at ICICI, a practice that was later adopted in the banking sector as well as the corporate sector in general.
During his tenure at ICICI, many women banking executives rose to higher levels and later joined the management of other banks.
He has been honored with numerous awards, including the Padma Bhushan, for his services to the banking and economic sectors of India.
His integrity and principles can be gauged from an excerpt from his book ‘Reflections’, released a few months ago by Union Finance Minister Nirmala Sitharaman in Mumbai: ‘Quite early in my career, when I was working in SBI, I left for the Mumbai railway station at around 5 a.m. to pick up his wife and two children. They arrived from Chennai after a challenging journey of over 36 hours. The ticket inspector asked me to show my tickets. When the wife did this, she noticed that we had half a ticket for my daughter, who he said looked older than 12. When I pointed out that he was only 10 years elderly, he asked me to see his birth certificate, which I gave him. Of course he knew I didn’t have it with me.”
“He was arguing and my wife was getting impatient after the long journey, the porter who was carrying the luggage nudged me to pay 20 rupees to settle the matter. Instead, I chose to pay the fine, which was double the fare.”
“I told the ticket inspector that I would get my money back after showing my birth certificate. I had to make several trips to the railway headquarters and finally got a refund of around Rs 60.”
“As I was leaving the office after collecting the check, I heard them clearly remarking that this was the first time he had ever encountered a fool who would spend so much money to collect such a diminutive refund when he could have settled the matter on the spot with a diminutive sum. Still, I felt proud to stick to my principles.”
That’s what Mr. Vaghul was like.
