<b>Letters</b> Historic role of banks

The merger of the State Bank of India (SBI) with five of its associate banks closes a chapter in the history of Indian banking. The five banks are remnants of the princely India which had merged into the Union in the early years of our freedom as a result of the vision of one of our greatest leaders, Vallabhbhai Patel. The ownership of these banks got vested in the states and the territories where their head offices were located. But after the State Bank of India (Subsidiary Banks) Act, 1959, they were out of the orbits of state governments and became subsidiaries of SBI (a transfer to central ownership, which some state governments begrudged). Since called SBI’s associate banks, now they are going to wither away altogether.

This is time to recollect, briefly, the history of these entities. The oldest, Bank of Mysore (now State Bank of Mysore), was founded in 1913 on the initiative of visionary engineer-statesman M Visvesaraya, then the dewan of the princely state of Mysore who was awarded Bharat Ratna by independent India. While pursuing a programme of rapid industrialisation of his state, he found it necessary that the state should also have a modern bank dedicated to trade and industry. Thus came into existence probably the first-ever public sector bank in India. The Patiala State Bank (now State Bank of Patiala) is completing its centenary this year. Two other banks, viz. Travancore Bank (now State Bank of Travancore) and Bank of Jaipur (which later joined Bank of Bikaner to become the State Bank of Bikaner and Jaipur), owed their creation to two other renowned statesmen, C P Ramaswamy Aiyar and Mirza Ismail, when they were dewans of the princely states where the entities were set up.

We cannot forget that these banks played a historic role in introducing modern banking in princely states which are part of India today. And after Independence, despite the spread of their branch networks across the country, they continued to serve as regional banks in the areas where they were established. Now, in a changed scenario, if the powers that be consider their merger with the SBI in the larger national interest, we cannot but bow to their decision.

R C Mody  New Delhi

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