MUMBAI: For Narayanan Vaghul, the accidental banker and noted philanthropist and institution builder, who redefined private sector banking in this part of the world by building ICICI Bank as the second largest lender in terms of market capitalisation in a short span of time before its newer peer HDFC Bank overtook it a few years back, banking was not his first choice, but civil service.
Vaghul, 88, who passed away on May 18 at Chennai’s Apollo Hospital where he was admitted after a fall, has redefined the industry he joined after plans to take the civil service hit a roadblock due to his underage. After joining State Bank of India as a probationary officer in 1957, he not only pioneered the industry but also became the youngest chairman and managing director of the public sector Bank of India, when he was just 44 and also the youngest chairman of the Indian Banks Association.
The credit for so many women bankers in the private sector space should be his, as he championed a gender-neutral meritocracy in banking, and mentored a generation of women bankers. Being a great talent spotter and being a firm believer in a gender-neutral meritocracy, Vaghul has mentored a host of second run women managers in ICICI at a time the money game was a male exclusive.
It was Vaghul who headhunted KV Kamath from Asian Development Bank. Not just Kamath, many of the financial sector leaders today--the Sebi chief Madhabi Puri Buch, Chanda Kochhar, who unfortunately had a humiliating exit from ICICI Bank as its chief executive; Shikha Sharma, who led Axis Bank for nine years, international banker Kalpana Morparia who headed JP Morgan India for over a decade; Multiples Assets founder Renuka Ramnath, and the present chief of ICICI Bank chief Sandeep Bakhshi, and another ICICI banker Nachiket Mor, were all spotted and mentored by Vaghul. He gave up his executive roles after Kamath rejoined the bank in 1996.
All this had the nation honouring him with the third highest civilian award, the Padma Bhushan, in 2009. Vaghul was born in 1936 in Madras as the second in a family of eight children. He studied at the Ramakrishna Mission School and graduated in commerce from Loyola College, Madras, in 1956. Vaghul married Padma and they have two children--Mohan and Sudha. Apart from building ICICI and ICICI Bank, his institution building legacy includes chairmanship of Crisil and Mahindra World City in Chennai as the first private sector SEZ; the National Institute of Banking Management, Central Bank of India, and Bank of India. He was appointed as the CMD of the ICICI, which was then still a government-controlled public finance institution, in 1985 by the then prime minister Rajiv Gandhi. He led the corporation’s transformation into the largest private-sector bank and retired in 1996, but remained as its non-executive chairman until 2009.
The defining moments in his banking career came in 1985 when he took over the reins of what was then the Industrial Credit and Investment Corporation of India (ICICI), a development finance institution that has gone on to become ICICI Bank in 1995. Being the right man in the right job at the right time, he helmed ICICI through those tumultuous years, merged ICICI with ICICI Bank, foreseeing the sharp rise in interest rates in the 1990s would hit development finance institutions. To him also goes the credit of building the country’s first credit rating agency Crisil. Vaghul was on the boards of Wipro, M&M, Apollo Hospitals and Mittal Steel.