February 21, 2020
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The Konkan Rail

Banks, education, South Canara’s B-people have set the trend

The Konkan Rail
Namas Bhojani
The Konkan Rail

Santosh Hegde, who took on the might of the Reddy brothers of Bellary mines with his Lokayukta report; Bollywood beauty, talent and enterprise like Aishwarya Rai, Shilpa Shetty and Sunil Shetty; flamboyant (and currently flailing) businessman Vijay Mallya; illustrious writer Arvind Adiga—the list of Mangalore’s icons is endless. Beyond the glamour, what has put Mangalore firmly on India’s economic map is the spirit of enterprise and its reputed educational institutions (though one’s eyes may boggle at the capitation fees charged by some of them).

Yet, despite competition from many replicas the originals stand tall, whether in education or banking, two areas where Mangalore has carved a niche. When India nationalised 20 banks in two phases, four of them—Syndicate, Canara, Vijaya and Corporation—were from south coastal Karnataka. Situated on the west coast, Mangalore, part of the Madras presidency during the British rule, came under Mysore administration post-Independence. It says much about the enterprise of the region that despite neglect by the new administrators, Mangalore became a hub by the 1970s.

The main business communities of south Karnataka region are the Bunts, the Goud Saraswat Brahmins (known simply as GSBs), the Mangalore Catholics and also the Bearys. Bunts, a martial race of Mangalore, are often likened to the Punjabis of the north and GSB to the Patels of Gujarat in their entrepreneurial spirit. “The Bunts have been landowners and traders for centuries. The GSBs were merchants and entrepreneurs in Goa too, and carried that character with them when they migrated (the largest number during Portuguese rule of Goa). They landed in the South Canara districts with little resources, so the GSBs had to start life from  scratch,” says Vinutha Mallya, an independent publisher who belongs to the GSB community.

It is difficult to say who led whom in the race to set up new institutions of learning or enterprise. But being highly literate, GSBs soon settled in to build several remarkable enterprises. Among the pioneers in setting up banking institutions in Mangalore were Ammembal Subba Rao Pai, a Goud Saraswat Brahmin, who started the Canara Bank in 1906. This got the ball rolling with Khan Bahadur Haji Abdullah Haji Kasim Sahib of the Muslim community setting up the Corporation Bank in Udupi, a temple town, which was part of the erstwhile undivided Dakshina Kannada (Mangalore) district of Karnataka.

“The element of nepotism helped people get bank jobs but the climb up thereafter was purely on merit....”

Other banks followed with Karnataka Bank set up by prominent members of the Brahmin community in 1924, Syndicate Bank in 1925 by a group of GSB community members, while Vijaya Bank was set up in 1931 by A.B. Shetty of the dominant land-holding Bunt community. Over the years, the private sector Karnataka Bank grew with the merger of Sringeri Sharada Bank Ltd, Chitradurga Bank Ltd and Bank of Karnataka. “The foundation of banking is trust and each of these banks came up in competition with each other along caste and religion lines. Each bank is a story of different community efforts—exactly like the Kerala side of the banking story,” says Prof D. Narayana, a business historian and head of the Thiruvananthapuram-based Gulati Institute of Finance and Taxation.

Community feelings were so strong that till the 1980s top bank officials were from the respective groups. Mallya narrates how people like her mother got a walk-in bank job just because she was a graduate. “It was considered philanthropic. The element of nepotism helped people get jobs but the climb up thereafter was purely on merit,” she says.

B.R. Shetty, New Medical Center, UAE Dr Devi Prasad Shetty, Narayana Hrudayalaya

Vijay Mallya, UB Group K.V. Kamath, ICICI Bank/Infosys

An ability to mobilise small savings is an important usp of the GSB community, which led to the setting up of chit funds, cooperatives and banks, points out business journalist Vivian Fernandes who hails from Mangalore. This concept took shape and assumed various guises in this coastal region, stretching right up to Kochi in Kerala where GSBs have a strong presence. One such was Pigmy banking or daily collection, said to have been started in 1928 by Syndicate bank just three years after it opened operations. “The bank collected as low as 2 annas daily in 1928, today the bank collects around `2 crore per day under the scheme,” reads a brief history of the bank.

Starting self-financing colleges may not have been the original idea when Dr T.M.A. Pai, a practising surgeon, bought 107 acres of barren land on a hilltop near Udupi. But after some failed ventures, when Pai, a prominent GSB industrialist, ventured into education he hit upon a winning formula that’s been replicated across the country. Today, Mangalore and Udupi are the hub of several such ventures by different communities, whether Bunts, other Brahmin groups, Christians or Muslims.

“After two generations, we are witnessing a shift with large numbers moving to IT. There is a sizeable number of IT entrepreneurs in the US now,” says T.V. Mohandas Pai, current CEO of the Manipal Education and Medical Group. Pai points to the fact that undivided South Canara had the highest human development index, and has emerged as the net exporter of talent with 10 per cent of the population, mostly professionals, working overseas.

An intrinsic aspect of the GSBs and the Bunts are their restaurant and liquor business. In the early 1930s-40s, if a Brahmin set up an eating joint, everybody would eat food there. This led to the emergence of Brahmins as hoteliers for the entire south—Udupi, Woodlands, Dasprakash, to name a few.

The Bunts, on the other hand, took their hotel business to the north and many prospered with their eateries serving non-vegetarian food in places like Mumbai and Pune. Similarly, in the liquor business, the takeover of United Breweries Ltd by prominent GSB member Vittal Mallya and later its emergence as the king of domestic spirits under his son Vijay Mallya is a well-charted growth. Of course, Mallya’s foray into aviation with Kingfisher Airlines has hit a bad air-pocket in the past months.

As the government flounders through various models of public-private partnership (PPPs), the GSBs have a takeaway. Narayana says that when T.M.A. Pai set up the Kasturba Medical College in the 1950s he requested then finance minister of Madras state, C. Subramanian, that the college be allowed to use the Vellore district hospital facilities for training for a fee. A perplexed Subramanian is said to have wondered aloud at “this mad man who wants to pay for the use of the district hospital”. Permission was granted and till today the arrangement continues—benefiting both the medical college and the Vellore district hospital.

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