I Am Tandon

This was in the same summer month, forty four years ago in 1974. They were the early years of my banking life. I was posted in a busy very large branch with total staff strength of more than sixty persons. The bank branches in those days had high counters with high chairs, and the feet of the person sitting on them never touched the ground. Foot rests were part of the counter to provide comfort to those feet. Branch Managers used to be in and out of branches on business visits. Branch staff did their normal work without much interaction with the branch manager as all functions of running the branch were taken care by the second in command. I was assigned a table at the end of the banking counter, just by the side of the wicket gate that allowed entrance inside the banking hall. Most of the customers work was done when they stood outside the counter. Very few came inside the counter for their work. My basic work related to receiving documents from customers against acknowledgement and attending the clearing house duties at Reserve Bank of India, located close to the branch at a walking distance. All work was manual with computers being unheard of. Even calculators were not around. The only calculator available was a book called "Kapoor's Calculator", a book with various tables for interest calculation that was done manually. 

On one such busy day, my branch manager entered the branch through the main door with our Regional Manager by his side. Entire South India was one region in those days and there was no system of Zonal or Circle offices. I recognised the Regional Manager as I had seen him once before. As they crossed the wicket gate and passed by my table, I greeted them and they acknowledged the greeting. They moved into the Branch Manager's cabin located behind me. I was still standing after greeting them when a tall distinguished gentleman entered the branch. He was carrying a leather bag which used to open at the top. Such bag was commonly carried in those days by medical representatives. He passed the counter, entered through the wicket gate and placed his bag on my table. He smiled and extended his right hand and as a reflex action I also extended my right hand. He shook my hands and said, "I am Tandon".

After shaking hands with me he went to the next person and continued meeting the other staff members. My Branch Manager and Regional Manager came out of the cabin to find that he was meeting all the staff at the branch. They waited for him to finish this round and later went into the manager's cabin. They stayed there for about half an hour and later went out together.

I went to my Assistant Manager and asked him who this Tandon was. He also did not know, but said that one Tandon was our new Chairman and Managing Director. It was confirmed to us later that he was indeed Shri Prakash Lal Tandon, CMD of PNB. 

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Prakash Lal Tandon (1911-2004) is considered as one of the best managers and most influential business leaders our country has produced. Born in Punjab, he was trained in London and was a Chartered Accountant before he moved into management roles. He was the first Indian Chairman of Hindustan Lever Limited, in 1961. He was a pioneer of management education in India. His student life in Manchester, UK and professional practice there gave him deep insights into sound management practices which he put to great use wherever he went later in his life. He was an advisor to top leadership in the government at that time and earned high respect due to his sound advice and integrity. After his stint in HLL, he was made chairman of State Trading Corporation (STC) in 1968. When he developed differences with the cabinet minister handling STC, he resigned the post. His high rating in the government circles did not permit losing his services. Government made him the CMD of Punjab National Bank (PNB) in 1971, which was one of the banks nationalised in 1969. This was perhaps the first instance when a non-banker and industry outsider was brought in as the CMD of a bank.

Banks like PNB in those days had a CMD and there were no executive directors. There was only one General Manager at the Head Office. We have come a long way since when such banks have 3 EDs and 40 to 50 General Managers. P L Tandon brought in various changes in PNB in his years of leadership at the bank. The present logo and fonts of name boards were among many changes brought out by him. Major branch expansions took place in those years and PNB became a truly All-India institution under his leadership.

Tandon was known for his talent spotting among the younger generation and encouraging them to take up higher responsibilities. His speeches in the AGM of the companies he headed were considered as essays in corporate management. He played a key role in setting up of IIM at Ahmedabad. He was highly respected in the academic circles as well. He was also associated with the National Council of Applied Economic Research.

Tandon was also known as an authority on Punjab affairs and is author of a trilogy of books: Punjabi Century, Beyond Punjab and Return to Punjab. His another book "Banking Century - A Short History of Banking in India and the Pioneer - Punjab National Bank" chronicles the growth of banking in India during the last century and the role of PNB in it as the bank was an integral part of it. He lived a full life of 93 years and remained active even after retirement from management roles.

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Prakash Lal Tandon is remembered in banking even today for yet another reason. In 1974 RBI constituted a working group under the chairmanship of P L Tandon to study and submit a report on working capital financing. This group did tremendous work and submitted a report in 1975. Inventory holding by various industries was studied in detail and recommendations were made covering various aspects of working capital finance. Current Ratio was brought into centerstage in working capital financing. The committee shifted the focus of working capital finance from security-based lending to need-based lending. The MPBF Method (Maximum Permissible Bank Finance Method) brought in by Tandon Committee is still used in working capital assessment of entities, with suitable modifications to suit present times. Working capital financing learning is never complete without taking the name of Tandon. 

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PUNJAB NATIONAL BANK was a product of swadeshi movement and started operations on Baishakhi Day in 1895, at Lahore, in the undivided Punjab. Punjab Kesari Lala Lajpat Roy was among the personalities who inspired setting up the bank founded on nationalistic values. Today, the bank is sadly passing through one of the worst crisis in its history. The bank has weathered many storms in its over 120 year journey. Partition of the country in 1947 and losing many branches and records in Pakistan was one such testing phase. One can be confident that It would come out of the present crisis as well and emerge stronger in the next few years. 

The memory of Prakash Lal Tandon and his management lessons are worthy of remembering in these difficult days and all concerned can derive inspiration from those ideals and values.