Remembrance of a Banking Past

No Regrets focuses on the events leading to the decision to nationalise banks

Published: 05th December 2015 10:00 PM  |   Last Updated: 04th December 2015 11:24 PM   |  A+A-


The real centre of interest of the book relates to a description of the events immediately leading up to the decision to nationalise banks in 1969, and the process undertaken to implement it. It was Ghosh’s lot as Deputy Secretary in the banking division of the Finance Ministry, and thereafter in the newly created banking department—to deal with the nitty-gritty of the processes.

The jury is out, even today, whether the nationalisation decision was a sound one. Was it better to effectively have had ‘social control’ on the banking system rather than outright nationalisation?

reme.JPGAny objective observer will conclude that the nationalised banks have not covered themselves in glory in recent decades. The primary purpose for the momentous move then trotted out (to reach banking to the ‘smallest and poorest’) was cynically never a real objective at any time. The current tottering state of banking structures arise not out of small-scale lending, but due to profligate capital distribution to the large sector—a combination of political thuggery and banking venality, perhaps even surpassing  the ‘crony’ lending era of Marcos’s Philippines. Ghosh clearly cannot be faulted for subsequent events; the failures have to be laid at political doors—but the author has not even made the attempt to describe the intentions of that era, the potential for abuse of the system, the possible pitfalls and dangers, the precautions taken; indeed an analysis of the strategic issues as they were perceived at that time.

There is a telling passage when the Principal Secretary to PM (Haksar) ‘consults’(!) the Deputy Secretary (banking) on the ‘desirability’ of bank-nationalisation—Ghosh’s response: “today the issue is not how to manage the future … It is clearly a question of Mrs Gandhi’s political survival. She has no other way out.” This paragraph should be mounted on golden letters in our history books, as the diagnosis why Indian governance has failed. An officer selected on ‘merit’, in a non-political civil service has as his main objective the survival of the ruling dynasty. Could a greater tragedy befall the administration of a newly independent democracy? Multiply this attitude among the civil servants of the country over the past half-century—we know why India is now nearly a failed state!

There is also a ‘brief’ reference to the State Bank of India’s Nagarwala episode, where `60 lakh was ‘fraudulently’ withdrawn on behalf of the then Prime Minister. Not surprisingly, the author implicitly discounts any wrongdoing from any political quarters! With the ability displayed by the author to help convert political needs to public policy decisions, is it surprising that he had a ‘successful’ career in government, and later after retirement—particularly as the same ‘dynasty’ continued to reign?

Ghosh’s narration is mostly a day-by-day account of the goings-on in the ministries and the agencies he worked in; the petty politics and games played out in any office at any time—the personalities and individuals in the ministries are now long gone, and not really relevant to the administrative history of India. The depiction of the dialogues and considerations within the Finance Ministry, as portrayed by Ghosh, also confirms one’s suspicion that the Finance Ministry is forever solely concerned with matters exclusively ‘financial’ in nature, ignoring the relationship of each decision or policy with the realities in the various ministries which actually impact on the ground. What really one missed in the book is his informed opinion why the policy objectives in the finance sector could not be successfully implemented. Was there incompetence in conception/planning, or faulty execution, or were there other factors which were unanticipated or unaccounted for? This is the real opportunity lost in the book.

The author exhibits an easy but erudite, scholarly writing style—though he could be tellingly censorious with one-liners to demolish ex-colleagues, such as Shunglu and Venkitaramanan. Clearly he is (or at least appears to be) very well read, citing illuminating references from such diverse writers as Neruda, Vallejo, Carl Jung, as well as inevitably Shakespeare—the frequent references to Lewis Carroll suggests something, one is not sure what. Would he have made a really great English professor—do we hear Edith Piaf belting out “Je ne regrette rien”?

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