Rest in Peace Narayanan Vaghul, the Bhishma Pitamah of India's Banking Industry

Narayanan Vaghul passed away on 18 May. He was 88 years old. 

(Photo: Vibhushita Singh/The Quint)

Narayanan Vaghul, an Indian banker and philanthropist, died at the age of 88 in his hometown Chennai on 18 May 2024.

The ‘accidental banker’ was born in a very modest, large family in rural Tamil Nadu in 1936. Vaghul’s journey to becoming one of the most respected bankers in India is a testament to his exceptional intellect, unwavering dedication, and profound understanding of finance.

After completing his Bachelor of Commerce from Loyola College, Madras (currently Chennai) he set out on a remarkable career in banking. Though banking was not his first choice, he came to represent and transform the financial services industry in immeasurable ways.

Vaghul’s illustrious career began in 1955 when he joined the State Bank of India (SBI) as a probationary officer. His talents were quickly recognised, and he rose through the ranks to hold various significant and senior-level positions within the SBI and at the Central Bank of India, the National Institute of Bank Management, and the Bank of India.

However, it was his tenure as the Chairman of ICICI Bank, starting in 1985, that truly cemented his legacy. Vaghul considered RK Talwar — the former Chairman of the State Bank of India — his mentor, imbuing similar qualities of values, integrity, dynamism and professionalism.

When Vaghul took over the Industrial Credit and Investment Corporation of India (ICICI), the institution was primarily a development finance institution. He had the foresight to envision the changes that were about to sweep across the Indian economy and recognised the need for ICICI to evolve. His strategic thinking and bold decisions transformed ICICI from a development bank into a diversified, full-service financial conglomerate, eventually leading to the creation of the ICICI Bank, one of India's largest and most successful private sector banks.

Vaghul's leadership style was characterised by his ability to think ahead of his time. In an era when Indian banking was still heavily regulated and dominated by public sector banks, Vaghul pushed for innovation and modernisation. He was instrumental in adopting technology in banking operations, laying the foundation for the tech-savvy banking sector India boasts today.

Under his guidance, ICICI Bank was one of the first in India to introduce electronic banking, ATMs, and online banking services, setting a benchmark for others to follow. Vaghul helped introduce the credit rating system in India and initiated the CRISIL (Credit Rating Information Services of India Limited) in 1987.

One of Vaghul’s significant contributions was his role in nurturing talent and fostering a culture of excellence within ICICI. He had an eye for spotting and nurturing junior members, executives and board members. Many of the leaders he mentored went on to become prominent figures in the banking and finance industry.

His mentorship created a cadre of banking professionals who carried forward his legacy of innovation and customer-centric services. This included KV Kamath, Kalpana Morparia, Shikha Sharma and Renuka Ramnath, to name a few. Even non-bankers like Kiran Mazumdar-Shaw, Ajay Piramal, Anand Mahindra and LN Mittal looked up to Vaghul as their mentor.

Beyond his role in transforming ICICI, Vaghul was a key player in shaping India’s financial sector policies. He served on numerous government committees and supervisory boards, and his recommendations were instrumental in the liberalisation of the Indian banking sector, promoting competition, and improving service quality.

Vaghul was also deeply committed to corporate social responsibility. He believed in the power of financial inclusion and worked tirelessly to extend banking services to the underserved and unbanked populations in India.

His efforts in promoting rural banking and micro-finance have had a lasting impact, providing millions with access to financial services and contributing to the economic upliftment of rural communities. In his interview with Forbes in 2012, when he was awarded the ‘Corporate Philanthropy Catalyst’ award, he talked about the need for every human being to engage in philanthropy of thought, ideas, time and resources.

He said, “A corporation should start giving as soon as it is formed. There is no need to wait for anything.”

Even after his retirement in 2009, Vaghul remained an influential figure in the financial world. He continued to share his vast knowledge and experience as an advisor and mentor to various financial institutions, start-ups and NGOs, including Pratham, Azim Premji Foundation and GiveIndia. His guidance was sought by policymakers and business leaders alike, underscoring the immense respect he commanded in the industry.

In 2023, during the release of his book ‘Reflections’ which he co-authored, Finance Minister Nirmala Sitharaman reflected on Vaghul’s ideas and vision on women empowerment, which continue to be relevant and valuable for India as more women take on leadership roles in financial services.

In his interview with India Today Group, he said, “It is about merit, and I removed the firewall between the genders.”

Vaghul was instrumental in fostering openness and gender diversity at senior levels of the banking sector.

Narayanan Vaghul's contributions were widely recognised, and he received numerous awards and honours throughout his career.

He was conferred the Padma Bhushan, one of India’s highest civilian awards, in 2010 for his exceptional service to the banking sector. He was given an award for his contribution to Corporate Governance by the Institute of Company Secretaries in 2007. He was given the Lifetime Achievement Award by the ’Ernst & Young Entrepreneur of the Year Award Program’ in 2009.

He was awarded Life Time Achievement Award by the Bombay Management Association in March 2013. In 2014, he was awarded the Lifetime Achievement Award by the Economic Times, further solidifying his status as a titan of Indian banking.

Despite his towering professional achievements, Vaghul was known for his humility and integrity.

He remained grounded and accessible, always willing to lend an ear or a piece of advice to those who sought it. His colleagues and peers often spoke of his down-to-earth nature and his unwavering commitment to ethical practices in banking.

Narayanan Vaghul is survived by his wife, two children, and four grandchildren. His family remembers him as a loving husband, a doting father, and an inspiring grandfather, who instilled in them the values of hard work, integrity and compassion.

As we bid farewell to Narayanan Vaghul, we celebrate a life that was not just well-lived but also profoundly impactful. His legacy is one that has left an indelible mark on the Indian banking sector, one that will inspire future generations of bankers and entrepreneurs.

His vision, leadership and commitment to innovation have paved the way for a more inclusive and dynamic financial landscape in India. The story of Narayanan Vaghul is not just a tale of professional success but also one of immense contribution to society. His life's work has touched countless lives, making him not just a legendary banker but also a true champion of financial empowerment.

The banking industry, and indeed the nation, has lost a giant, but his legacy will undoubtedly continue to guide and inspire them for many years to come.

In an interview with Awakin Talks, he was asked about one thing on his bucket list. His response summarises his spiritual philosophy and humanity: “Simple. In my journey in search of the meaning of life, I want to travel as far as possible before my lifetime ends. I know this is a long journey and it may take several births to achieve enlightenment.”

You have already enlightened us, Narayanan Vaghul. Au revoir!

(Ram B Ramachandran is a Professor and Vice Dean at Jindal School of Banking and Finance, OP Jindal Global University.)