*The story of Syndicate Bank*
(a bit long but truly amazing to the core)
31 Mar 2020 was the last day of Syndicate Bank.
Here is an interesting post I came across a while back.
With bank mergers taking place and banks losing their identity, here is a little-known story of once-private Syndicate Bank, which started with a 25-paise deposit...
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.
Firstly, it was born out of a belief that an innovative person cannot really generate wealth for himself on a sustainable basis unless he works out a way to make his community wealthy as well.
Secondly, it was the only large bank in India to locate its headquarters in a rural area – in the 1930s Manipal was still a village.
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, Syndicate’s promoters opened accounts with just 25 paise.
Unfortunately, this is a story that most management schools too do not teach.
The bank itself was a brainchild of Tonse Madhav Ananth Pai, who went to Bangalore to study medicine.
He excelled in his studies, and when earning his licence to practise medicine, he went back home to the fishing village of Malpe.
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 of the people he grew up with.
That broke the boy's heart. He wanted to study more.
And he knew that a fishing village would provide him neither money, nor the intellectual challenge.
He was proved right. In six months' time, he confirmed that a fishing village had only colds, fevers, diarrhoea, dysentery and indigestion as regular ailments.
He tried persuading his parents one more time to let him go overseas for further studies.
Once again, he was rebuffed. His relatives would talk of how the boy would go to sleep sobbing into his pillow crying over the unfairness of life.
Till one day, he had his Eureka moment. He realised that one reason why he was not earning enough was because the people around him were also not earning enough.
Could he change that?
He began strategizing a social revolution that India had never seen or imagined.
He knew, as a doctor, that children are brought o doctors invariably by mothers; seldom by fathers.
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 returned to home base.
The cleaning of the fish, selling them, managing provisions, balancing incomes with expenses was left to women.
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 there wasn’t enough money for saving. He would then ask them to show how much money they had. They would show him a few coins.
He would gently take a 25 paise coin from each woman and tell her to start with this.
Since he was not a bank, he kept two notebooks for each woman – one kept with him and the other with the 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 persuasions and exhortations, worked.
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.
It was time to go to phase 2 of the plan.
