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May 19, 2024

Narayanan Vaghul: A Visionary Leader and Colossus of Indian Banking

Narayanan Vaghul’s impact on Indian banking is profound, marked by his exceptional leadership, humility, and forward-thinking. His career, characterized by transformative initiatives and a people-centric approach, offers invaluable lessons in effective leadership and innovation.

Early Leadership at Bank of India

In 1980, Narayanan Vaghul joined the Bank of India as Chairman and Managing Director at just 44. His arrival signaled a new era, bringing fresh perspectives and ideas. Vaghul believed in the collective wisdom of the bank’s workforce, not just the head office. This belief led him to initiate a practice of identifying challenges faced by the bank and inviting officers directly dealing with these issues to deliberate and find solutions at conferences held at the head office.

One such instance occurred in 1981, when, as a JM Scale I Officer at the Bank of India’s Hyderabad Regional Office, I attended a three-day conference for Operations and Methods (O&M) officers at the head office. Vaghul actively participated, steering discussions and listening intently to various viewpoints. Despite disagreements on solutions, he never interrupted but rather took meticulous notes. His humility shone through when, on the final day, he sought my approval on a draft summary of the decisions, demonstrating his inclusive approach and generosity.

Champion of Innovation and Technology

Vaghul’s vision extended beyond traditional banking practices. Despite holding a Bachelor of Commerce degree, his understanding of and curiosity about the application of technology in banking were ahead of his time. Anticipating the benefits of the upcoming satellite INSAT 1B, he foresaw how it could revolutionize the Bank of India and the broader banking system, preempting similar strategies by major international banks.

His simplicity and unpretentious nature were equally remarkable. During a visit to the Electronics Corporation of India Limited (ECIL) in Hyderabad to discuss matters with the ECIL Chairman, he requested only a car and driver, eschewing the trappings of his high office.

Effective Communication and Management Reforms

A skilled public speaker, Vaghul often used powerful analogies to communicate his ideas. In one memorable speech, he compared dinosaurs to large institutions like banks, highlighting the necessity of adaptive and efficient management information systems. This analogy underscored the need for significant reforms in banking practices, many of which he successfully implemented.

Legacy at ICICI

Vaghul’s visionary leadership was most evident during his tenure as Chairman and Managing Director of ICICI. He was instrumental in establishing several subsidiaries, significantly enhancing ICICI’s brand and market capitalization. His strategic acumen culminated in the reverse merger of ICICI with ICICI Bank, a move that transformed the institution and set a precedent in Indian banking.

Even after transitioning to non-executive roles, Vaghul continued to mentor and support his successors, ensuring smooth leadership transitions and the sustained growth of the institutions he led. His dedication to mentorship and his commitment to nurturing talent further solidified his legacy as a leader who valued people as much as progress.

A Legacy of Humility and Forward-Thinking

Narayanan Vaghul’s life and career exemplify that decency, simplicity, and forward-thinking are key to achieving success at the highest levels. His qualities and contributions remind many of the late President APJ Abdul Kalam, another luminary known for his humility and visionary leadership. Vaghul’s approach to leadership, marked by generosity, innovation, and a deep understanding of technology, continues to inspire and influence the banking sector and beyond.

Jhumpa Lahiri

Jhumpa Lahiri

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