100 years of Karur Vysya Bank!

There is much news (which is mostly noise) about future of Indian banking. There is very little on history of banking and particularly some banks, no matter how fascinating and interesting this history has been all these years.

This is a crucial period of Indian banking in a way. As we look to create new banking institutions (with most being old wine in a new bottle – link one, link two), we often forget how old some of our continuing institutions are and how they continue to serve us for so long.

In this list, we ignore the new private sector banks created post 1994 as they are still new in the list (though some post 20 years now) and just look at the nationalised banks and old private sector banks . Here is how the list looks now:

SN Classification Name of Bank Foundation Year Years completed
1 Nationalised ALLAHABAD BANK 1865 151
2 Nationalised PUNJAB NATIONAL BANK 1895 121
3 Old Pvt Sector CITY UNION BANK LIMITED 1904 112
4 Nationalised CANARA BANK 1906 110
5 Nationalised CORPORATION BANK 1906 110
6 Nationalised BANK OF INDIA 1906 110
7 Nationalised INDIAN BANK 1907 109
8 Nationalised PUNJAB AND SIND BANK 1908 108
9 Nationalised BANK OF BARODA 1908 108
10 Nationalised CENTRAL BANK OF INDIA 1911 105
11 Old Pvt Sector KARUR VYSYA BANK LTD 1916 100
12 Nationalised UNION BANK OF INDIA 1919 97
13 Old Pvt Sector CATHOLIC SYRIAN BANK LTD 1920 96
14 Old Pvt Sector TAMILNAD MERCANTILE BANK LTD 1921 95
15 Old Pvt Sector NAINITAL BANK LTD 1922 94
16 Nationalised ANDHRA BANK 1923 93
17 Old Pvt Sector KARNATAKA BANK LTD 1924 92
18 Nationalised SYNDICATE BANK 1925 91
19 Old Pvt Sector LAKSHMI VILAS BANK LTD 1926 90
20 Old Pvt Sector THE DHANALAKSHMI BANK LTD 1927 89
21 Old Pvt Sector SOUTH INDIAN BANK LTD 1929 87
22 Nationalised VIJAYA BANK 1931 85
23 Nationalised BANK OF MAHARASHTRA 1936 80
24 Nationalised INDIAN OVERSEAS BANK 1937 79
25 Nationalised DENA BANK 1938 78
26 Old Pvt Sector JAMMU & KASHMIR BANK LTD 1938 78
27 Old Pvt Sector FEDERAL BANK LTD 1940 76
28 Nationalised ORIENTAL BANK OF COMMERCE 1943 73
29 Nationalised UCO BANK 1943 73
30 Old Pvt Sector RATNAKAR BANK LTD 1943 73
31 Nationalised UNITED BANK OF INDIA 1950 66

This is an interesting list.

  • There are 31 banks. 19 are nationalised and 12 are old PSBs.  Eleven banks have completed 100 years, 7 banks are in their ninety years, 4 in eighty years, 8 in seventy years and just one in sixty years.
  • Of the eleven banks that have completed 100 years, 9 are Nationalised banks. The average age of these NatBs is 92 years. Oldest being Allahabad at 151 years and youngest being United at 66 years.
  • We ignore Nationalised Banks from this analysis as well. As one does not whether they would have survived if not nationalised. Though most of these nationalised banks were very good private sector banks before they were taken by the govt. In all likelihood most of them would have continued and not get into the issues we them as of now (This blog has argued earlier that these nationalised banks are being wrongly picked for banking woes in India.

Let us focus on these Old Private Sector Banks.

  • It is fascinating to see the longevity of these OPSBs. They continued to survive despite not being nationalised. The average age of these 12 banks is 90 years! There has been a continuous effort to close the banks under this category. There were about 25 of them in 1991 and now just 12 remain.
  • Within the 12, City Union Bank originating from Kumbhakonam completed its 100 years in 2004 itself.
  • The second bank in the list to complete its 100 years in Karur Vysya Bank based out of Karur in Tamil Nadu. Thus it becomes the title of the post as well. Karur Vysya Bank was found by Chettiars – Mr. Venkatrama Chettiar and Mr Athi Krishna Chettiar. Three more banks were found by the Chettiars who used their indigenous banking skills to form joint stock banks. These were Indian Bank (not formed but supported by Chettiars), Indian Overseas Bank and Lakshmi Vilas Bank.
  • There are another 5 in their nineties, 2 in eighties and 3 in seventies.
  • What is interesting is to see how they survived all the turmoils of multiple banking crisis in the country in the period – 1930s, 1960s, 1990s and so on. These started as mainly small community banks which somehow survived all the tough times. This blog also showed how some of them are even smaller than newly licenced small finance banks.

It is a pity that the  polity has hardly focused on these banks. All they choose to do is open some branch, ATM or give some lecture on annual day. Given India’s focus on banks and inclusion, these banks could provide invaluable lessons. Some of them could be doing much more inclusion than we actually know.  With most of them lasting for nearly 100 years, I am sure they have plenty of interesting insights for both existing and new entities. A study of their longevity alone could be very interesting.

But with a tag like Old Private Sector Banks, they are just buried under the carpet from any analysis. Before all of them are eventually merged into other entities as is the only focus of the polity, can we get some lessons from these entities?

 

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