There are three reasons why Syndicate Bank is important in the evolution of India as a wealth generator, and for working towards the upliftment of the masses.
Secondly, it was the only large bank in India its headquarters in a rural area –
Thirdly, even before CK Prahalad arrived on the scene, its promoters knew about how wealth could be found at the bottom of the pyramid.
At a time when all banks insisted on Rs 5 as the minimum deposit amount to open an account,
Unfortunately, this is a story that most management schools too do not teach.
The bank itself was a brainchild of Tonse Madhav Anant Pai, who went to Bangalore to study medicine.
He excelled in his studies, and
He asked his parents if he could go to Japan for further studies, but was told sternly by his mother that he should stay in the same village and practice medicine for the welfare
He was proved right. In six months' time, he confirmed that a fishing village had only colds,
Once again, he was rebuffed. His relatives would talk of how the boy would go to sleep sobbing into his pillow crying over
He began strategizing a social revolution that India had never seen or imagined. He knew,
So he focussed on the women who came to him. He began urging them not to let their children end up like their fathers who were good only for fishing and then getting drunk when they
If there was any surplus money, the man demanded it, and got drunk with that money. So he urged the women to save. But they told him that
Since he was not a bank, he kept two notebooks for each woman
He told them that he would send his compounder over to her house every day when the husband was not around. If they could save 25 paise, the amount would be registered in both the notebooks.
The scheme, backed by constant
Women began saving. In a few months, Pai realised he had more than a thousand rupees – which translates into a few lakhs using today’s valuations.
The 25 paise deposit scheme came to be known as the Pygmy Deposit scheme.
He urged them to give the children a glass of milk every day. That was impossible. A glass of milk was unaffordable.
They laughed: "We cannot afford a glass of milk, and you want us to buy a cow?".
But Pai gently told them that he could finance the cows for the women.
And repayment was also painless, he explained: "Just give your child
Within a short while, there were so many cows
To handle the amount of money coming in he started a bank - Canara Industrial and Banking Syndicate Ltd - with its headquarters in Manipal.
The first branch of the bank started
Then to benefit the community he began schools, then colleges and then institutions that
In fact, to grow the bank, Pai used to look around for good businessmen, who had the urge to grow and both the ability and willingness to repay the amounts borrowed.
That businessman was Dhirubhai Ambani,
And that is how a member of the Pai family remained on the board of Reliance Industries as long as he was alive.