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Dakshina Kannada, Birthplace of Four Big Nationalised Banks, Mourns Merger Move

Dakshina Kannada, Birthplace of Four Big Nationalised Banks, Mourns Merger Move

Locals and observers say finance minister Sitharaman’s announcement on Friday that 27 state-run banks will be consolidated to form a dozen strong lenders has ended a glorious inning in the history of modern Karnataka.

Bengaluru: Once famous for producing nuns, nurses and nuts, the beautiful coastal district of Dakshina Kannada in Karnataka is also a hub of nationalised banks. It has the unique distinction of producing four major public-sector lenders: Canara Bank, Corporation Bank, Vijaya Bank and Syndicate Bank.

Now, the people of Dakshina Kannada, Udupi and rest of the state are mourning the “death” of their beloved banks. Thousands have taken to social media to express their sadness and anguish. Finance minister Nirmala Sitharaman’s announcement on Friday that 27 state-run banks will be merged to form a dozen strong lenders has ended a glorious innings in the history of modern Karnataka.

The fifth lender from the same place, Karnataka Bank, is still a private limited scheduled bank and has escaped the merger.

All these institutions in the district have an interesting history. Different castes have produced different banks. Yet, there was a healthy competition among them with no caste or religious colour to it.

Corporation Bank was the first to be born in Dakshina Kannada district. On 12 March 1906, Khan Bahadur Haji Abdullah Haji Kassim Bahadur Saheb established Karnataka’s and one of India’s first lenders to help the traders and general public. It was set up in the temple town of Udupi.

The content of the first appeal to the public dated 19 February 1906 speaks volumes about the lofty ideals and ethos behind the foundation. Haji Abdullah declared that:

“The primary object in forming ‘Corporation’ is not only to cultivate habits of thrift amongst all classes of people, without distinction of caste or creed, but also habits of co-operation amongst all classes.”

“This is ‘Swadeshism’ pure and simple and every lover of the country is expected to come forward and co-operate in achieving this end in view.”

Corporation Bank was nationalised in 1980 during the second round of this activity by Prime Minister Indira Gandhi.

In July 1906, Ammembal Subba Rao Pai, who hailed from the trading Gouda Saraswat Brahmins community founded Canara Bank in neighbouring Mangaluru. Indira Gandhi nationalised it in 1969 during the first round of bank nationalisation.

A quarter of a century later, the fourth lender from the district Vijaya Bank was established by local farmer AB Shetty. Its name is rooted in the fact that it was established on Vijaya Dashami day.

Shetty, who hailed from the agrarian Bunt community, together with 12 other Bunt farmers founded the bank mainly to help local cultivators who were struggling during the great economic depression of the 1930s.

It was also nationalised in 1980. During last year’s consolidation of such institutions, Vijaya Bank was merged with Dena Bank and Bank of Baroda.

Syndicate Bank was the third bank to be established in 1925 at Udupi, as Canara Industrial and Banking Syndicate Limited, with a capital of Rs 8,000 by three visionaries – Upendra Ananth Pai, a businessman, Vaman Kudva, an engineer, and Dr TMA Pai, a physician – who shared a strong commitment to social welfare. Their objective was primarily to extend financial assistance to the local weavers who were crippled by a crisis in the handloom industry through mobilising small savings from the community. The bank collected as little as 2 annas daily at the doorsteps of the depositors through its agents under its Pigmy Deposit Scheme started in 1928. Thanks to this, Syndicate Bank was known as the “small man’s big bank”.

The lender was renamed as Syndicate Bank Limited in 1954. Also, the head office moved to Manipal. In 1969, the bank was nationalised along with 13 others.

Besides performing their primary role of banking, all four banks also played the part of Karnataka's brand ambassadors across India.

All the employees during the first 50-60 years were from Dakshina Kannada and neighbouring districts. They took local languages, culture, food, art and literature with them to every nook and corner of India.

They spread Karnataka culture from Gangolli to Guwahati, Ranebennuru to Ranthambore, Kundapura to Karnal, Vitla to Agra, Uppinangady to Uttar Pradesh, Belthangady to Bengal, and Sringeri to Srinagar.

Till economic liberalisation of the 1990s, there were at least half a dozen bank chairmen from Dakshina Kannada, says a Mangalorean and an observer of the banking system, Shivaprasad Shetty.

“It is true that we feel sad. With the merger of our banks with outside banks a rich legacy is over. Uniqueness is lost. But, there is no place for sentiments in the money market,” he said.