Business Standard

T N Ninan: The 'Talwar amendment'

An important vignette about the Emergency days has come out, in a booklet written by N Vaghul to honour the memory of R K Talwar

Related News

Monday will mark the 37th anniversary of the imposition of “internal” Emergency, on June 25, 1975, with President signing the proclamation late at night, even before it had Cabinet approval. An important vignette about those days has come out, in a booklet written by to honour the memory of R K Talwar, the trail-blazing chairman of (SBI) from 1969 until his abrupt departure in 1976, at the height of the Emergency. The vignette that deserves a wider audience relates to Talwar’s ouster.

Mr Vaghul, who started his own distinguished banking career in SBI, recalls that a cement company to which the bank had given a loan became “sick”, with mounting losses. Seeing that the problem was mismanagement, the bank agreed to a restructuring package provided the company’s promoter, also its chairman and CEO, made way for a professional. The promoter happened to be a friend of Sanjay Gandhi. Sanjay called the finance minister (who, though unnamed, was C Subramaniam; was nominally under him as minister for revenue and banking), and asked him to direct the bank to waive the condition on change of management. The minister phoned Talwar, who called for the details of the case, satisfied himself, and informed the minister that the condition could not be waived. The minister summoned Talwar to Delhi and told him that he had instructions from “the highest authority” in the country. Talwar stood his ground. This was communicated to Sanjay, who called for Talwar. Talwar refused to meet him, saying he had no constitutional authority. Sanjay’s response was swift: Sack Talwar.

This was easier ordered than done, because under the State Bank of India Act the chairman could not be removed without sufficient cause. So the minister offered Talwar a different assignment, to chair the proposed Banking Commission. Talwar said he would accept and could do that in addition to being the SBI chairman. The minister looked unhappy, so Talwar observed that the minister seemed to be “very particular” that Talwar not continue as the bank chairman. The minister admitted that the problem was Talwar’s lack of flexibility on the cement company issue, and said that if he did not resign, he would have to be dismissed. Talwar said he had no intention of resigning, and the minister could decide on dismissal. As Mr Vaghul tells it, Sanjay next asked the Central Bureau of Investigation (CBI) to look for grounds on which Talwar could be dismissed. It turned out that Talwar had sent appeals to many businessmen, seeking donations for the Auroville project to which he was devoted. But no businessman was willing to testify that Talwar had spoken to him or tried to persuade him to make a donation. All that he had done was to forward an appeal signed by the prime minister and the secretary-general of the United Nations (U Thant), recommending the Auroville project for support. The was forced to close the case.

Sanjay now lost all patience, and told the minister to amend the SBI Act so that Talwar could be dismissed without stating the reason. With opposition leaders in jail, Parliament rubber-stamped the Act’s amendment in no time. The minister told Talwar one final time that if he did not resign he would be dismissed. Talwar remained defiant. Finally, on August 4, 1976, Talwar was given 13 months’ leave and asked to hand over charge to the managing director of the bank. Even after arming itself with the required powers, the government could not bring itself to sack Talwar. Mr Vaghul records that there was hardly anyone to see off SBI’s greatest chairman that evening, so great was the atmosphere of fear at the time.

Read more on:   
|
|
|
|
|
|
|
|
|
|

Read More

Kishore Singh: Venice the menace

The Brazilian honeymooner was my age by any reckoning, his glamorous bride a little younger, and like us they’d reserved berths in the overnighter ...

Most Popular Columns

Nitin Pai

Nitin Pai: Mr Modi's follow-through risks
Nitin Pai

For India to make the most of Narendra Modi's ambition and energy, he must get New Delhi to keep up

Abheek Barua & Bidisha Ganguly

Abheek Barua & Bidisha Ganguly: A glimpse of things to come
Abheek Barua & Bidisha Ganguly

The rise in US interest rates and associated change in the direction of capital flows, the fall in oil prices and the slowdown in China are three themes that will dominate the markets in 2015

Premvir Das

Premvir Das: Arihant and what it means
Premvir Das

India's first indigenous nuclear-powered submarine is a considerable achievement - and should have an impact on security strategy

Advertisement

Columnists

Ajai Shukla

Ajai Shukla: Of dogs' tails and leopards' spots
Ajai Shukla

India must watch for signs after Peshawar that Pakistan is waking up to the dangers of Islamism

Shailesh Dobhal

Shailesh Dobhal: The digital year
Shailesh Dobhal

India Inc will remember 2014 as the year when the threat and the opportunity of the digital world became real

Noshir Kaka & Anu Madgavkar

Noshir Kaka & Anu Madgavkar: India's tech transformation - Making workers the winners
Noshir Kaka & Anu Madgavkar

New technologies will force millions of workers to acquire new skills. Rapid technology advancements will also help India's less-educated ...

Back to Top