The incredible story of the founder of Central Bank who with his idealism, hardwork and capability brought an iconic institution to reality. Comments by Mrutyunjay Mahapatra, Senior Banker, Author and Public speaker
A Parsi lad 30 years young started his own bank, he registered it on
21,December 1911,with a Paid Up Capital of just 20 Lakhs
He had started his Bankers Career as an Accountant with Bank of India
Though the Bank of India was Indian sponsored, Top managerial positions were all held by Europeans.
At Bank of India, Mr. HP Stringfellow, Was the European Boss of the Parsi Bawa. He drew a salary of Rs. 5000/- a month while Parsi bawa was paid Rs. 200 a month.
Not only were there huge pay disparities and humiliations, Europeans dominated banks were partial when it came to giving out credit to Indian entrepreneurs and businesses.
Parsi Bawa didn’t like this. He wanted an Indian Bank managed by Indians. Early 1900s saw rise of Swadeshi movement and it was applied to the world of banking also
The young boy resigned from Bank of India service. Thakordas Parekh who worked with him at Bank of India left along with him & assisted him in setting up his bank by joining as Superintendent of Current Account and Bills It’s noteworthy that Thakordas Parekh is Deepak Parekh’s grandfather.
But initial few years post starting operations were not easy,
Between1913/1917. 87 banks failed
Early on post the bank started its operations, there were multiple runs on Parsi bawa’s bank too. Just 2 year into operations, there was a major run on the bank. Directors of the bank pledged titles of their personal properties to pay
Before 1923, Parsi bawa’s bank saw through another couple of bank runs. Each time coming out stronger purely on commitment and sincerity of its management.
Then something extraordinary happened in 1923
Not many know this, but Tata’s once owned and operated a bank too – for a grand total of 6 years.
They had once set up Tata Industrial Bank (TIB) during boom of WW1 (1917).
TIB had paid up capital of Rs. 2.3 cr and deposits totalling to ~6 cr. These were big numbers back then.
Post World War-1, the TIB started to get into trouble.
Once the boom of World War-1 ended TIB’s industrial investments rapidly depreciated. TIB had also spent 66 Lakh on magnificent structures in Bombay & Calcutta. House of Tatas was also passing through a lean phase in early 1920s.
Imagine what history would have looked like had a bank from Tatas failed.
Although a competitor bank, Parsi bawa didn’t want TIB to fail. TIB failing would have put shutters on operational success of lot of other Indian sponsored banks.
Parsi Bawa’s Banks all though less than one fifth in size of TIB, wanted to Amalgamate TIB with his bank.TIB was amalgamated with bank in July 1923.
The European staff of TIB was slowly replaced with Indians.
With this and some truly fantastic innovation mostly mastered by , the bank became a force to reckon with in Indian banking industry.
There were some firsts which came out from this bank. For example this bank was the first to launch a Safe Deposit Vault.It was also first in India to introduce HSS passbooks and system of withdrawals by cheques in Savings Account.
In 1924 it became the first to employ women assistants to serve lady customers and even maintained a separate department for them.Bank offered free life insurance if one maintained avg. bal. of Rs.10.
At one point one in 15 Bombayite had an account with his bank.
I belive you have gussed the name of Parsi Bawa and the Bank !
Parsi bawa’s name was Sir Sorabji N Pochkhanawala & his bank’s name is Central Bank of India.
Sir Sorabji was only 30 year old when he founded Central Bank.
Today Central Bank of India is a government owned bank, it is one of the oldest and largest commercial banks in India.It is based
in Mumbai.It is one of twelve public sector banks in India to get recapitalised in 2009. In a merging initiative Central Bank of India is kept out because it has Pan India presence
Despite its name it is not the central bank of India. It is a public bank.
(RBI)RESERVE BANK OF INDIA Is the central bank to India.
Source: Internet, Goggles Search, Reference Article by Shri.VK Chopra, Former CMD Corporation Bank