Tamal Bandyopdhyay: The accidental banker

DINEER WITH BS

Vittaldas Leeladhar

Three engineers joined Syndicate Bank in 1969 as trainee officers. Their first posting was at the bank's headquarters at Manipal. The bank's Chairman T A Pai was travelling for two weeks, so they had little to do.

To pass time, the three new trainees pored over the office manual to discover what the future might hold for them in the banking industry. In the normal course, if they were promoted on time, they would retire as assistant general managers, a prospect that satisfied them then.

More than three decades later, one of them, Vittaldas Leeladhar, a chemical engineer from Kerala University, has become a deputy governor of the Reserve Bank of India (RBI), two years before his retirement as the chairman and managing director of Union Bank of India.

Leeladhar became a banker by accident. "I was actually planning to join Indian Aluminium as a management trainee at its Belgaum plant and approached the Syndicate Bank chairman to be my referee.

But when he looked at my CV, he was quite keen that I join his bank," Leeladhar reminisces, sipping orange juice at his Napean Sea Road residence.

It is the residence of Union Bank's chairman and managing director, the post Leeladhar was holding till recently (he has not yet shifted to the deputy governor's official residence).

He had invited me for dinner at home some time ago, an invitation I could not accept for one reason or another. This time when I approached him for a meal hosted by Business Standard, he countered with the old proposal instead, and it seemed churlish to refuse a long-standing invitation.

Leeladhar joined Syndicate Bank on a monthly salary of Rs 269. Six months later, the appointment letter came from Indian Aluminium promising a salary of around Rs 800.

He ignored that offer because he had already started enjoying his job appraising industrial projects for loan disbursals.

After 35 years of commercial banking he is now a regulator. "How does it feel to be an umpire rather than a player?" I ask him. "Nothing special. I used to bother about the health of one bank. Now, I see the entire industry.

The pressure about my performance as a banker and preparing a balance sheet every quarter will be not there," he says in a matter-of-fact tone.

His deputy governor's remit will cover, among other things, rural credit. That is, incidentally, an area with which he is quite familiar since he made it a habit to visit 45 rural branches every year as chairman of Union Bank.

In fact, weeks before shifting to Mint Road, he visited five villages in Gujarat and Uttar Pradesh. "I find a new awakening in rural India. As a CEO whenever I visited a village, I found the rural folk turned out in their best outfits and there was a general air of festivity.

They would put up torans (gates) to welcome us. This is a sure sign that we will be able to bring them into the mainstream of lending and free them from the clutches of local money lenders."

Leeladhar recalls occasions when he was asked to wear a turban or ride an elephant in deference to the local customs and he pulls out an album of photographs of village visits. I pick one of them "" the former Union Bank chief in turban and festive clothes "" to use in Business Standard.

As we shift to the dinning room, I discover that my host is to eat only idli and sambhar while an embarrassingly sumptuous array of non-vegetarian dishes has been laid on for me "" chilli chicken, prawn curry, pomfret fry and crab curry "" all cooked by Mrs Leeladhar.

He does not eat non-vegetarian but his wife occasionally indulges in a bite of fish. Both of us decide to start with idli-sambhar and look back at his career as a banker.

It's been an eventful one, punctuated with the kind of unique moments that only India's public sector banking can offer. His career, though, is unusual in that he has always worked at head offices, never branches. For all that Leeladhar maintains an old-world simplicity rather than the hard-bitten manner of the seasoned banker.

The best part of his career, he tells me as I devour crab, was his 16 years at Corporation Bank. "I learnt about credit and recovery there," he says.

Mrs Leeladhar is eager to find out whether the food suits my palate. "We normally put more chilli in our cooking. I have a Bengali neighbour who has told me that you don't like hot food," she explains.

Now she insists that her husband must try a bit of rice and dal after eating idli-sambhar. Leeladhar reluctantly mixes two spoonfuls of rice with dal signalling clearly that this is as much as he will eat, even as I gorge on prawn curry. His frugal eating habits prove indirectly proportionate to his talents as a raconteur.

He entertained me with some amusing stories about unique recovery cases he handled as a deputy general manager of Corporation Bank such as selling coffee beans at ports across the globe to recover dues when a coffee exporter went bust or selling an isabgol factory lock, stock and barrel to a pharmaceutical company when the borrower defaulted.

As I turn to the fried fish under the watchful eye of my vigilantly generous hostess, the conversation shifts to his views on the anticipated merger and acquisition wave in banking, which he sees as inevitable, and the health of the industry that he thinks can be taken care of with better corporate governance.

And inevitably, we're talking about rising interest rates. Was that a concern? Could banks be insulated against it? Like most, he, too, thinks banks needed to reduce their reliance on treasury operations. Which brings me to another deputy governor Rakesh Mohan's famous comment about "lazy banking". Are there too many lazy bankers who only chase zero risk sovereign paper?

Should the current level of mandated investment in government paper "" 25 per cent "" be brought down to force banks to lend? He decides not to answer this question.

So as a deputy governor, what is his prescription for the banking industry? "Three things: tighten monitoring system of all loans and investment; train the workforce and consolidate," he says without batting an eyelid.

As Mrs Leeladhar brings in home-made dessert "" karaundo "" a laddu made of beaten rice and jaggery, I try to make the air light by asking him how he relaxes. Watching football, reading fiction and listening to music.

He also meditates. "I go to bed early and cannot sleep beyond four in the morning," he says. It's well past 11 pm and I could see he is finding it difficult to keep his eyes open though he would not admit it.

The laddus are so delicious that I help myself to another. But I ask him quickly who runs a public sector bank "" the CEO or the government? Leeladhar is categorical that there is no government interference in the day-to-day business.

So, is everything just fine in PSU banking industry? "There are areas such as salary, perks and service conditions of CEO and wholetime directors where the banks need more autonomy.

We also need professional independent directors on board. There could be a search committee to identify the right candidates," he says.

I ask my last question: As a deputy governor, what's his plan for co-operative banks? How bad is the situation there? "Oh, it's quite grave.

It's going to be a difficult task," is his candid reply. "The sector needs a large dose of recapitalisation. Finally, the system of dual control must go. It should be either the government or the Reserve Bank," he says.

I am through with my laddus , but as I get up to leave, Leeladhar requests his wife to sing a song. She agrees and I am treated to a bhajan normally performed at Kannada weddings when the bride leaves her father's home, a touching finale to some munificent hospitality.

As Leeladhar sees me off, his mobile rings. On the line is his daughter who has been studying sociology in Bangalore. That's the only sign of change in the soft-spoken, tough banker's life after he has become a regulator.

He never used a mobile phone till he moved to Mint Road. "I am forced to take this," Leeladhar smiles abashedly as he bids me good night.