By John B Monteiro

Mangaluru, Aug 31: “Banking is a very treacherous business because you don't realize it is risky until it is too late. It is like calm waters that deliver huge storms.” Nassim Nicholas Taleb (b. 1960), Lebanese-American essayist and risk analyst.

The founders of banks in Kanara (also Canara), now all of them late, would agree with Nassim if they could articulate their views from the great beyond. Four banks in the old undivided district –Corporation, Canara, Syndicate and Vijaya – grew so fast and well that they became ‘eligible’ for nationalisation. And now (30/8/19) they figure in the merger list (Vijaya had been there for some time).

It is relevant and timely to focus on some aspects of these banks. For instance, the risk factor is reflected in the founder of the first bank, today’s Corporation Bank, back on February 19, 1906, followed by today’s Canara Bank on July 1, 1906. For the record, Syndicate Bank was founded in 1925 and Vijaya Bank in 1935. These banks gave South Canara district the informal title of “Cradle of Banking”. It was not smooth sailing as reflected in the life of the founder of the first bank who died in debt.

Founder ended bankrupt

It is interesting to go back to 125 years and highlight the life and role of the Founder of Corporation Bank – Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur.

Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur

“The public are hereby informed that at a meeting of the principal residents of Udipi (Note the spelling then) held on 11th and 18th instant it has been decided to start an Association styled ‘ The Canara Banking Corporation (Udipi) Ltd.’ (after explaining the objects and advantages, the letter continued). It will thus be seen that the primary object in forming the ‘Corporation’ is not only to cultivate habits of thrift among all classes of people, without distinction of caste or creed, but also habits of co-operation among all classes. This is ‘Swadeshism’ pure and simple, and every lover of the country is expected to come forward and co-operate in achieving the end in view. All possible guarantee is offered by the rules for the safety of the funds and their good management. The business will be started from 16th March…”

This is an excerpt from the first official letter, dated February 19, 1906, written by Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur under his signature sent to the public, mainly of Udipi. The bank was projected to start, and did, on March 16, 1906 under the title of Canara Banking Corporation (Udipi) Ltd. – the first such bank in Tulunadu. The only other bank functioning then was the Mangalore Branch of Bank of Madras opened in 1868, the predecessor of today’s State Bank of India. That bank was elitist catering mainly to the whites and leading locals. Udipi was served through the visit of British Agent of the bank’s Mangalore Branch once a fortnight. The local system of raising loans comprising Holy, Kuri and Hundi was marked by high interest rates. It was in this context that Abdullah took the initiative to start a bank in Udipi.

Respected Muslim

Though a Muslim, Abdullah was highly regarded as a leading merchant and landholder. That is how he could carry with him the 12 first Directors of the bank which had only one other Muslim. He was the only Muslim among the 10 signatories to the Memorandum of Association sent for registration on May 13, 1906. But, he walked tall as Founder President of the bank from 1906 to 1929, with short breaks during his Haj pilgrimages. Abdullah brought to the bank not only his prestige and resources but also the participation of fellow Muslims, rich traders of the time, as shareholders of the bank. In 1908, community-wise, Muslims were the largest shareholders – 251 in number representing an amount of Rs.57, 609. The other leading shareholders were Saraswaths, 850 (Rs.33,273); Gowd Saraswaths, 376 (Rs.33,003); Shivali, 299 (Rs.16,704); Catholics, 66 (Rs.6,172); and Protestants, 33 (Rs.1,309). Thus, at its very inception the bank had acquired a cosmopolitan character.

It is significant to note that the first office of the bank was started in a portion of Abdullah’s palatial mansion in Udipi. A street next to his mansion is named after him and to mark the centenary of Corporation Bank, his statue has been unveiled in Udipi.

According to the late M. V. Kamath, who wrote the bank’s history, Corporation Bank – A Corporate Journey, Abdullah was a Deccani Muslim and possibly of Turkish origin whose ancestors had migrated from the Deccan to South Kanara. His father, Haji Kasim Haji Budan Saheb, was a rich landlord. Abdullah had no children. His family owned large tracts of agricultural land in the district. His share of wealth was about 1,000 murrahs of rice annually. He was the sole distributing agent for Wimco matches for the whole of the then Madras Presidency. He traded in dried fish in partnership with the head of the fishing community of Malpe (Madhwaraj). He also traded in dry fruits imported from Arabia. His family lived lavishly. The late Kamath, quoting (also the late) A. Wahab Doddamane in his book Muslims of South Kanara, refers to how Abdullah’s father celebrated his eldest son’s batna (circumcision ceremony) by feeding members of all communities with their own special brand of food. Brahmins were given as dakshine (monetary presents) on the occasion. Abdullah’s father had the reputation of distributing one murrah of rice every day to the poor and needy.

First to own car in Udipi

Abdullah was the first in Udipi to own a car. He was said to be the first one to introduce coffee as the breakfast drink. This fashion started by Abdullah has taken Udipi (a brand name now) far as hoteliers to the nation and beyond. Unlike Muslims of the time, he attended regular schools and passed SSLC. He was a well-read man, enjoyed Hindusthani classics and patronised Hindusthani musicians. He lived a disciplined life going out for walks in the morning and playing tennis in the evening. He presided over a meeting addressed by Mahatma Gandhi, during his visit to Mangalore on August 19, 1920, at the Central Maidan. He held public offices from Panchayat level to Madras Legislative Council. He was a member of Central Legislature and visited Delhi often. He was conferred by the government the title of Khan Saheb in 1909 and Khan Bahadur in 1920.

Charity was his undoing

Abdullah’s generosity knew no bounds. But, at the end, his unbound charity was his undoing. After he relinquished his Presidentship of the bank in 1929, hard times overtook him and he went deeper and deeper into debt. Some said that Abdullah’s generosity exceeded his wisdom. Abdullah, who once lived like a king in a palatial house and bestowed his generosity on others, had gone broke. The turn of events had unnerved him completely.

On the morning of August 12, 1935, he was found lying unconscious in his bed. Doctors tried to revive him in vain. He was 53 years at the time of his death. People from all over the district rushed to Udipi in their thousands to pay their homage. Many had been at one time or another recipients of his largesse or witness to his kindness. Brahmins and untouchables mixed freely on that day. Shopkeepers voluntarily observed a hartal on two successive days. It was a spontaneous tribute to Udipi’s most loved and highly respected citizen.

To this day Corporation Bank’s annual reports carry the photo of its founder.

The 'Canara' confusion

Now we come to another aspect of “Canara” in banking. ‘Canara’ was common to three banks at the time of their founding. An interesting chapter of banking history in Tulu Nadu is the inclusion of ‘Canara’ in the original titles of three banks and the subsequent shedding of the ‘Canara’ tag by two of them. The one which continues to sport ‘Canara’ in its title is Canara Bank.

Ammembal Subbarao Pai

Dr T M A Pai

The three banks involved are The Canara Banking Corporation Udipi Ltd, founded in Udipi on March 12, 1906, Canara Hindu Permanent Fund Ltd, founded in Mangalore on July 1, 1906 with Ammembal Subbarao Pai as founder President (the bank was renamed Canara Bank Ltd in 1910) and Canara Industrial and Banking Syndicate Ltd, founded in 1925 in Udipi by Dr T M A Pai of Manipal fame.

Worry over identity mix-up

Though the name ‘Udipi’ was deleted from the first bank’s title effective April 4, 1939, there was an undercurrent of concern among the Canara Bank Directors about the identity mix-up with three banks including ‘Canara’ in their titles. In 1938 Canara Bank’s Board of Directors gave some thought to the desirability of changing the bank’s name on the ground that outside South Kanara its name was often confused with two other banks (Canara Banking Corporation Ltd. and Canara Industrial and Banking Syndicate Ltd.) both of which were associated with ‘Canara’.

The Canara Bank Board noted: As at present advised we do not think it desirable to change our name from Canara Bank Ltd. But, all Agents outside the district will be instructed personally to intimate all our customers and others of the separate entity of the three banks without any deprecating remarks as regards the other two banks and impress on such customers and others they ought to follow the practice followed in our district, speaking respectfully of the ‘Canara Bank’ the ‘Corporation Bank’ and the ‘Syndicate Bank’.

Two banks shed ‘Canara’ tag

This was an era of widespread collapses, liquidations and mergers of small and weak banks and one of the ‘Canara’ banks was perceived to be weak. Canara Bank Ltd which viewed itself as stronger than the other two was afraid of being the victim of possible mix- up of the ‘Canara’ identity. There was a sigh of relief in Canara Bank circles when ultimately Canara Banking Corporation was formally renamed as ‘Corporation Bank’ and, later, Canara Industrial and Banking Syndicate Ltd was also renamed as “Syndicate Bank”. Thus, Canara Bank Ltd finally had exclusive use of the word ‘Canara’.

Today, Canara Bank’s annual report sports impressive figures of deposits, advances and profits. But, it started with 2000 shares of 50 each and functioned from a small rented building at 75A, Dongerkery Street, Mangalore. In the first six months of its operation, its income was Rs 3,800 and net profit Rs 2,420. Apparently, only the clerk, K Venkat Rao, was paid and the others did honorary work.