Former Chairman, State Bank of India
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Passing Away of a Legend - An obituary by N. Sivaraman & R. Vishwanathan:  The Hindu (May 13,2002)

Talwar — a saviour of SSIs By K. T. Jagannathan The Hindu ( April 26,2002)

R. K. Talwar: A banker ahead of his times: S. Parthasarathy
BusinessLine (May 07,2002)

Remembering Talwar: A. Chandramouliswaran Business Line (May 10,2002)

Sri. R.K. Talwar(1922-2002) was a legendary Banker. He was widely  known and respected for his honesty and uprightness.In 1981, when I was undergoing 2nd Branch training as a PO at Pondicherry, I had the good fortune of  meeting him. He had no airs about him. He asked me how I liked the Bank job and wished me success in my career.

He was an ardent devotee of Sri. Aurobindo and The Mother. He passed away in Pondicherry in 2002.

These Webpages aim to collect and present  impressions of Sri.. Talwar at a single place.

Contributions from persons knowing Sri. Talwar, having his photographs or any written material  welcome. Copies only need be sent. Archival material like old issues of Colleague, any other Circle House Magazines having articles by/on him  may also be sent. Persons having photographs can also send them by scanning them as .jpeg files

All  used contributions will be acknowledged in these pages.

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Passing away of a legend  by N. Sivaram & R. Viswanathan

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"HONESTY IS the best protection'' is the message that greets everyone in the lift lobbies of the Mumbai Corporate Office of State Bank of India. It was painted at the instance of R. K. Talwar, (RKT) who was the Chairman of the bank at the time the building was commissioned. RKT adopted honesty as an abiding principle of his life, but was wise to recognise that many others would try to be honest only if it were a protection and not policy. In his passing away, the country and its banking system has lost a titan.

RKT presided over the destiny of SBI during a truly historic moment in Indian banking. Until 1969, SBI was the only bank owned by the Government and had enjoyed a unique status in the minds of people; it was the biggest of them all. By the nationalisation of 14 other big banks in 1969, the uniqueness of SBI was eroded and the other banks offered stiff competition to SBI. By his foresighted and value-based leadership — he was the Chairman till 1976 — RKT placed SBI in such an unassailable position that it holds the top position even 25 years after he left the bank. The true measure of this achievement could be understood if one were to compare the progress of the other big banks; the biggest private sector bank, just before nationalisation, has been now shunted to a far lower place in the pecking order and the position of No. 2 bank after SBI is constantly changing.

In any mention about RKT, his steadfast faith in wholesome values would come on top. Two instances come to mind. When it was indicated in one of the advertisements of SBI that it was safe to bank with the bank, a competitor complained that it might give the impression that other banks are unsafe institutions; RKT immediately appreciated the point and ordered the withdrawal of the advertisement. Another was during the mid-1980s, when the then Chairman of the bank was talking to a leading international banker in a foreign country. The SBI Chairman was not sure whether the foreigner had heard of SBI: the latter put the former at ease, saying that he well knew of SBI, as the biggest Indian bank, "that can do no wrong". This compliment was earned by SBI only because of the legacy left behind by RKT.

RKT's foresight was exceptional. It was he who saw that the organisational structure and systems of the bank needed a thorough overhaul in 1970 and commissioned consultants to study the matter and suggest suitable corrective action. This was particularly needed as SBI's network of branches grew in geometric proportions from around 250 in 1955 (with a 150 years existence) to 650 in 1960 and over 8,000 in the next 20 years. He chose two brilliant academicians from the Indian Institute of Management, Ahmedabad, as consultants, in preference to foreign firms. His main brief to them was that the bank had "lost its branch managers and they have to be brought back to the main stream.'' That he, as Chairman, could empathise with the front line staff speaks volumes of his commitment to the organisation. The reorganised structure that he put in place had verily stood the test of time and, but for some modifications, was in place for well over two decades.

Men of vision are generally uncomfortable poring over details and usually leave the tiresome job to their glorified assistants. Not so, RKT. He was totally comfortable with detailed analyses of any complex problem and would go to the core of the issue immediately. And, the best part of it was that any formidable office note did not stay in his table overnight. The imprint of his incisive brain was quite visible in the perceptive comments that he made on the note. He was truly a man who clearly "saw both the trees and the whole forest.''

RKT was also readily accessible to all the people working in the bank and he did not take offence at certain remarks at which lesser mortals would have taken serious exception. An instance was when he visited the bank's staff college in Hyderabad and addressed a gathering of newly recruited probationary officers. One impish officer asked him as to what qualities made him Chairman of the bank. RKT politely replied that there was nothing extraordinary in him, but devotion to duty and the blessings of the Divine.

RKT trusted people and groomed all those working under him to shoulder higher responsibilities. He used to tell his trusted subordinates that they could well exercise up to his powers, in an emergency and report to him for ratification later. Even if the decision taken by the subordinate proved to be wrong, RKT stood by the decision. By demanding perfection from his people, RKT ensured that they became professionally strong.

In business development, RKT's contribution was phenomenal. He joined the then Imperial Bank in the 1940s when the bank gave loans only to the "reputed'' business houses in the country and little, if any, scrutiny of the client's financials and other factors was done.

He insisted on proper examination of the factual financial position of all the big borrowers and did not go by their mere connections or past reputation. Much before the Tandon Committee prescribed norms for financial analysis of big borrowers, at the instance of RKT, systems were in place in SBI to ensure that the bank's funds were put to proper use. In fact, almost alone among his peers then, RKT was quite comfortable with studying in depth, financial data of borrowers.

Lest one conclude that RKT was pro big business, it has to be recorded that it was he who was instrumental in giving a big thrust to financing small scale industries and businesses. He chaired a committee in the 1960s which recommended far reaching changes in the way SBI (or for that matter any other bank in India) gave loans to the smaller entrepreneurs. SBI, under RKT's leadership, proclaimed that "any activity that can produce salable goods'' can and should be supported with need-based bank finance. It was a severe cultural change from security based lending to need based lending and but for RKT's missionary zeal in promoting the cause of smaller units, it is doubtful if SBI would have assimilated the policy and implemented it.

Above all, he had the courage of his convictions and did not succumb to unreasonable pressures from external sources. On one occasion, he pleaded in the Chairman's speech in the annual meeting of SBI for increasing the interest rates on deposits, during a time when these were fully dictated by the Reserve Bank of India, which is the central bank of the country, besides being the owner of SBI. He insisted on doing so, despite a clear signal that the RBI Governor would like the matter to be deleted from the speech.

The final denouement came when the powers that be in New Delhi ordered him orally to give more money to an already sick borrower. As "obeying'' that order would have put SBI's funds in jeopardy, RKT refused, point blank, and it is recorded history that this decision of his cost him his job as Chairman of SBI . India would rarely see the likes of him who, at a fairly young age of 54, gave up the biggest job in commercial banking, to uphold a principle.

An ardent devotee of Sage Aurobindo and the Mother, RKT was fully committed in words and deeds to truth and honesty. Raj Kumar Talwar was not a mere prince, but a mighty Emperor among honourable men. May his soul rest in peace.

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Talwar — a saviour of SSIs
By K. T. Jagannathan

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CHENNAI APRIL 25. A super banker of yester-year with a clear fix on tomorrow. That was R.K. Talwar. The former Chairman of State Bank of India may have passed into the pages of history. Yet, his contributions, nay works, at SBI hold a lesson or two to young bankers of the coming generations. The introduction of organisational reforms and innovative banking in the 70s had brought out the visionary in Talwar. If the organisational revamp had underscored his concern for making banking a lot more creative activity, his concept of innovative banking had always in mind a proper blend of business goal and social obligations. Not surprisingly, SBI, during his tenure at the helm, was making some unorthodox lending such as financing prisoners, rehabilitation of ex-convicts, helping industrial workers to buy bicycles and the like. More than anyone, Chennaites will cherish his memory more. At a young age, Talwar was vested with the job of Deputy Secretary and Treasurer to Madras Circle. The five-year stay in Chennai saw him take the circle to the top in SSI lending. For Talwar, "small man'' had become some sort of on obsession. So much so, he was often referred to as "Saviour of SSIs,'' "Father of SSI movement'' and what not. He was singularly responsible for establishment of the merchant banking division in SBI. His `emotional involvement' with small units had forced him to direct this division to help grown SSIs graduate to next phase. Talwar laid much store by sound lending. Availability of security - even in the form of Government uarantee - in his reckoning, should never deviate a banker from the principles of sound lending.

Talwar always sought only a supplementary role for banks vis-a-vis assisting the farm sector. On several occasions, he had made it plain that the primary role still belonged to the co-operative sector. Unlike the new generation banker who does not hesitate to pull out of a firm at the first sight of trouble, Mr. Talwar had always held that it was the primary responsibility of the banker to identify the trouble and nurse a unit out of sickness.

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R. K. Talwar: A banker ahead of his times by S. Parthasarathy

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THE passing away of R. K. Talwar marks the end of a distinct era in Indian banking. The Hindu notes that he was the `Father of SSI (Small Scale Industries)'. But Talwar's contributions to the banking industry cannot be limited to SSIs. The impact he made was more sweeping, had become the benchmark of the banking industry's coming of age in the 1960s and the 1970s.

The business world is familiar with Talwar's important role in the flow of bank credit to SSIs; but less known is the fact that he brought about a sea change in the attitude of the banking system to SSIs. The banking system in the 1960s was filled with primitive attitudes to managerial accountability. Talwar saw this as a major barrier to the development of SSIs through banking support and boldly came out with the decision that, in the area of SSI financing, so long as the officers/managers were not guilty of mala fides, and so long as the appraisal of the credit was in order, the officers/managers would not be held accountable for errors of judgment. The result was amazing. SBI's performance in the development sector of credit was leagues ahead of all the other banks.

Talwar laid great stress on proper and comprehensive credit appraisal. The beginnings of a credit rating system were also founded through his initiatives. He asked the credit officers to make unambiguous recommendations. Fairly convinced that the appraisal system was the best safety net he could think of, Talwar astonished the corporate world by offering to surrender guarantees of managing agents and/or directors in lieu of a fair readjusting (upwards) of the lending rate.

Another important area in which Talwar's innovative approach fetched profitable results for SBI was the issue of pricing of products and services. Until the early 1970s, there was no scientific basis in SBI for pricing products and services. For instance, the rate of exchange (commission) for discounting a trade bill or a cheque and for collecting the same instrument was the same.

The fee structure completely overlooked the fact that while discounting an instrument, the bank was laying down funds upfront and while collecting the same instrument, the bank was enjoying the float — the very opposite. Talwar introduced more rational and rigorous pricing models and attitudes. These sweeping changes did not spare even the Government. SBI was then the sole agent of the RBI for conducting the treasury business of the Central and State governments. For this service, the RBI paid a compensation that did not meet even a fraction of the cost. Talwar raised this issue with the RBI and persuaded it to accept a third party assessment. Thakur, a leading private chartered accountant (who was to become a Minster of State for Finance in later years), was appointed for this purpose. As a result, the structure of compensation for SBI for conducting government business was placed on a rational footing.

When human resource development was still a relatively unknown management jargon, Talwar propagated the idea of human and social capital. He took personal interest in officers who he thought had the potential to grow fast; he called them for discussions, often over the heads of their superiors who were also involved in the matters discussed.

Talwar's tenure as SBI Chairman was also coincidentally a period when the trade union movement was getting to be aggressive and confrontational. This was particularly true of the unions in the banking system. The bank saw quite a few confrontations, strikes and agitations, as a consequence.

Talwar's equations with the RBI were always excellent. Because of his strikingly original and thought-provoking policy insights, he was always consulted by the RBI's top brass when it formulated important banking policy. Talwar was the SBI's first technocrat Chairman. Prior to him, SBI/IBI Chairmen were invariably appointed either from the ICS/IAS cadre or from the top management of the RBI. He, therefore, had to prove himself and demonstrate the stuff of which bank managers were made of.

He retired with his wife to Sri Aurobindo Ashram to lead a simple and quiet life. When the Ashram was getting to be a bit uncomfortable with internal squabbles, he moved out to a small sparse portion in a street house in Pondicherry.

(The author, a former managing director of SBI's Overseas Operations, is now adviser to Apeejay Group of companies.)

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Remembering Talwar by A Chandramouliswaran

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The article on the late R. K. Talwar, `A banker ahead of his times' (Business Line, May 7,2002) brings out clearly why Talwar was a much-admired figure in the banking circles.

The article does not, however, touch upon one important aspect of his personality.

Besides being a man of character and integrity, Talwar did not yield to political pressure and did not hesitate to give up his positions as Chairman of State Bank of India and, later, as Chairman of Industrial Development Bank of India when he could not agree to certain courses of action on the basis of his conscience.

I recall Talwar (in 1988) not showing any interest in giving the RBI his bio-data so that he could be considered for appointment to its central board.

Perhaps he came to the conclusion that he may not be able to perform his duties on the board of the RBI with the fierce independence with which he was used to performing his duties.

All those really interested in the subject of autonomy of the central bank should note this.

A. Chandramouliswaran

Former Executive Director, RBI

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