A saga ends in India’s cradle of banking: South Canara

Superb piece by M. Raghuram in Mint:

In the new wave of bank mergers announced by finance minister Nirmala Sitharaman on 30 August, Syndicate Bank will now be merged with the anchor Canara Bank. In short, Syndicate Bank will cease to exist.

The Udupi-born Corporation Bank will also lose its name. Founded by Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur in 1906, it will be merged with Union Bank of India and Andhra Bank. Last year, another local bank, Vijaya Bank, which was started by the Bunt (landowners) leader A.B. Shetty, was merged with Bank of Baroda.

So, Canara Bank is now the lone public sector bank standing in the region that has been dubbed the “cradle of banking”. Before they were bifurcated in 1997, the Udupi and Dakshina Kannada districts had birthed five banks. Four of them were nationalized commercial banks—Syndicate, Canara, Vijaya and Corporation Bank. All these banks were initiatives of private individuals, highly motivated for community welfare.

The fifth bank, Karnataka Bank, is still in private hands.

This second wave of bank mergers in August has rocked this “cradle of banks” more violently than the bank nationalization did in 1969. The undivided Dakshina Kannada district has always shown great concern about anything to do with its banks. The district raised the loudest protest when nationalization happened. In 2017, when Vijaya Bank, along with Dena Bank, was merged with Bank of Baroda, there were widespread protests. The district also experienced a partial bandh, but it was dubbed as a “panic reaction”.

As things stand, there has been a mixed reaction to the massive changes. While customers are seeking more clarity, there’s muted resentment given that this area has traditionally been supportive of the ruling Bharatiya Janata Party (BJP) government at the Centre. Some opposition political parties are planning protests. And of course, many bankers and their families are upset and even perplexed at the development.

Hmm.. Another piece in The News Minute wrote why some people are upset over the move and some asking to move on.

Dr Thingalaya, the lone scholar who studied history of banking in South Canara district passed away in Jan-2019. He would have been saddened seeing how quickly the legacy of banking in the region has gone in a few strokes.

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3 Responses to “A saga ends in India’s cradle of banking: South Canara”

  1. Umang Shah Says:

    hi

    on looking at the financials of Dena Bank, Vijaya bank and Bank of Baroda, it can be observed that Vijaya Bank has had the best financials, not only among the 3 merged banks but across all PSBs. It has never made a loss since 2003, nor has there been a major delinquency observed in its operations leading to significant recapitalisation in its accounts. Do you think, this bank was chosen to merge with 2 bad eggs simply to cover the stink of financials of Dena Bank?

    regards
    Umang

  2. Umang Shah Says:

    yes, absolutely.

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