S H Khan - soft voice, hard talk

In 1998, when Serajul Haq Khan retired as the chairman and managing director of Industrial Development Bank of India (IDBI) he said in an interview that he looks forward to contribute at the macro level. Apparently, this did not go down well with some of the industrialists who asked him whether working in the private sector would be tantamount to not contributing to the economy or the country. But Seraj uncle's philosophy was clear – after being at the helm of IDBI, the premier development financial institute (DFI) which was also the promoter of other remarkable, path breaking institutes like CARE, NSE to name a few, he wanted to stay clear of executive positions in the private sector.

Till his sudden passing away on January 12, he was associated with few companies as an independent, non-executive director. In fact, he was in Pune in connection with his role as chairman of the audit committee of the Bajaj group when he died. He was 78. He was brought to Mumbai, a city where he built his career and had his family, and was buried at the Bada Kabrastan on Wednesday (January 13) afternoon. In his illustrious career he had been on the boards of several companies like UTI, Air India, LIC, Indian Airlines, Exim Bank, IDFC. 

Born and brought up in dusty and remote villages of UP’s Ghazipur district, Seraj uncle was a consistent topper all through his academic life. After attending the local school, he went on to do Masters in Commerce from University of Bihar where he was a gold medalist. A famous line about him was that he was inseparable from books even while on the football field! I am not sure if he had planned a career in banking but after a short stint as a lecturer in a Bihar college he came to Mumbai and joined the Reserve Bank of India (RBI) as a probationary officer in 1961. For young budding economists and bright commerce graduates, the RBI in those days was a magnet. In 1965-66, he became a part of the newly established Industrial Development Bank of India (IDBI), which grew under the shadows of the RBI. I am sure he must have had considerable difficulty explaining to people that one couldn’t open a savings account in the ‘bank’ where he was an officer!

Over the years IDBI, which was formed by an act of Parliament, became the premier DFI in India. After being a subsidiary of RBI, it ultimately became a wholly-owned undertaking of the government of India. Seraj uncle too rose in the hierarchy. He became executive director in 1986, managing director in 1992 and chairman and managing director in 1993. The legendary S S Nadkarni had spotted the talent of Seraj uncle and favoured him to succeed after his retirement. This spoke volumes of the talent and industriousness of Seraj uncle because, as is well-know, IDBI at that time could boast of the best, which included most notably Dr R H Patil – NSE’s main architect.

But there was a minor hiccup to his elevation. While he had the internal support from IDBI, there was a possibility, which quickly died down, of an outsider pipping him to the post. In 1993, after the retirement of Nadkarni as chairman of IDBI, he became the acting chairman. While it was widely believed that he would ultimately succeed Nadkarni, who had groomed him for the takeover, there was a possible coup in the making. Taking advantage of its close proximity to certain key politicians of the day, a business house began to actively lobby on behalf of the chairman of another bank to head IDBI. But ultimately merit ruled over politics, and Seraj uncle was appointed to the much deserved post of chairman in December 1993. By this time a whole generation of people, at least in eastern UP and parts of Bihar, had become aware of IDBI - and why one couldn’t open a savings account there. 

I do not have any early memories of Seraj uncle, as he seems to be always present from the time I can remember. He was a good friend of my late father and I vividly remember several evenings in his flat. On some occasions (perhaps on Eid) he would come to our house and then my father would accompany him back. Those were the days of VCRs, and a distinct advantage of going to his house for the kids was the access to a well-stocked video library in the neighborhood. During the 1992-93 communal riots in Mumbai, he came to our house suggesting that children and the women accompany him. We didn’t go at that moment, but the situation deteriorated, and the very next day we shifted to his house, where we stayed for a good 10-12 days.

Seraj uncle at a reception @urdufigures.blogspot.com

In the next few years, under his dynamic leadership, he took IDBI to greater heights in terms of productivity and profitability. In its category, IDBI was among the top 10 in the world. Most importantly he strongly believed in the transformation of DFIs into banks, a thought that had first gained currency during Nadkarni’s reign. The RBI constituted a committee under his chairmanship known as the Khan committee to look into ‘universal banking’. This report stands out as one of the highlights of his career. It was this committee, which had as its members K V Kamath and M S Verma among others, that first proposed the conversion of DFIs into banks. But ironically, it was ICICI that beat IDBI in the game and moved ahead. Of course, one of the reason for the quick transformation of ICICI was that it was not tied down, as IDBI was, to government regulations and had more flexibility.

One outcome of this overarching government control was the comparatively low salaries of the staff at IDBI. “If you pay peanuts you will get monkeys,” he reminded the government. Being an insider, he tried his best to delink the salary scale at IDBI to government norms. This certainly added to his popularity and respect at IDBI. He was also very happy with the fact that it was IDBI that acted as promoter to institutes like SIDBI, NSE, and the rating agency CARE. He was also the chairman at both NSE and CARE and always spoke of how the NSE convincingly left BSE way behind.   

  

In 1998-99, when I was at Elphinstone College, Dr Sonu Kapadia, the editor of the College magazine and the last of the distinguished names at the college, was looking for contributions from students. I had few articles in my mind, and was fine-tuning them, when I read in The Economic Times how Seraj uncle completed his innings at IDBI without knowing his successor. I suggested Dr Kapadia an article on the importance of HRD and her first reaction was that it should not be related to the optional paper I was studying! I told her it would be a journalistic piece and was very excited to see the magazine carrying the article mentioning how governmental indifference and politics was clouding the naming of successors at key institutes, along with other issues. (During the same period the announcement of a successor to another key post was delayed).

Seraj uncle’s career was seen in remarkably different ways by different people. Some would label him as only among the few from UP/Bihar to occupy a high position in the financial and banking sector. For many he was representative of the fact that Muslims too can reach coveted positions. For votaries of Hindi he was a good example of why convent or English education was not the only way to success. And there indeed was a powerful message in the way his career shaped. It epitomised the importance of hard work and meritocracy. His refined manners and good looks added to his charming personality, which also at times confused people. A foreign pink paper once described him as ‘aristocratic’! 

Despite his busy schedule and travel, he always found time to visit his native village. He never lost touch with his roots and took a keen interest in the affairs of his extended relatives and the community. He fondly remembered his friends from his school days hailing from different villages. In the later years he patronised an NGO working in the field of education and social empowerment in Mumbai. “Hasib sahab (Abdul Hasib Siddiqui, former executive director, RBI) told me about them. They are doing good work,” he told me after I asked him about his picture with kids in the NGO's newsletter. In the last few years I would occasionally call him. “So now you have become an NRI,” he would say. When I met him during my last visit to India I asked him that he should write about his life and career. “I have never thought about it. Also, if I write one it has to be an honest account, but considering that several people I worked with are still alive I don’t think I will be able to do justice. So it’s only better that I do not write.”

While he may have chosen not to write about his experiences, any serious volume on the history of project financing or financial institutions in the post-Nehruvian era will be incomplete without the mention of IDBI and his stewardship. He had a soft, very distinct and distinguishable voice - which is difficult to forget. Sadly, that voice will never be heard now.

He is survived by his wife, two daughters and two sons.