Tamil Nadu - Chennai

“Public sector banks are pillars of financial sector”

CHENNAI: Public sector banks in the country are among the strongest pillars of the world banking industry, P. Chidambaram, Union Finance Minister, said on Saturday.

This was due to strong traditions built into the Indian institutions which continued after nationalisation of banks. “Our banks are today among the strongest pillars of Indian financial sector,” he said, participating here in the centenary celebration of M. Ct. M. Chidambaram Chettyar (1908-1954) who founded the Indian Overseas Bank in 1936.

Emphasising how Chidambaram Chettyar, known as M.Ct., gave importance to the system of inspection of banks, the Union Minister said banks in the United States failed not because the economy in that country failed but because of poor regulation and almost non-existence of inspection system .

He said “if driven by greed and bonuses, chief executives and other executives [of financial institutions] take on unacceptable risks, the result is what we see happening around us in the world – meltdown in the financial sector.” The Union Minister hailed Chidambaram Chettyar for his contributions to insurance and banking and said he had demonstrated a “remarkable foresight, courage, vision and confidence.”

Noting that it first occurred to M.Ct. in 1942 that synthetic yarn would become the poor man’s fabric, Mr Chidambaram said the industrialist’s decision to found Travancore Rayons in January 1950 was the most intrepid chapter in his life. “To produce a product, unknown to this part of the world, was a great leap into the future.”

He recalled that M.Ct was elected to the Council of States at the age of 29 and served the Council for 10 years. He was responsible for a crucial amendment to the Limitation Act, acknowledging that what was widely practised in the Indian system of money lending was made part of the Act.

The Union Minister, who earlier unveiled busts of M. Ct. and Sivagami Pethachi on the campus of M.Ct. M. Chidambaram Chettyar Matriculation Higher Secondary School at Mylapore, received the first copy of a special postal cover on the industrialist. Among those who took part in the function were M. Ct. Pethachi, managing trustee of M.Ct. M. Chidambaram Trust, S.A. Bhat, chairman and managing director of the Indian Overseas Bank, M.S.Ramanujan, Postmaster General (Chennai City Region), Devaki Muthiah, grand niece of M.Ct, and Unnamalai Subramanian, former principal of the school.

Corrections and Clarifications

* * Indian Overseas Bank was founded by M.Ct.M. Chidambaram Chettyar on February 10, 1937. It was wrongly mentioned as 1936 in the Chennai report, "Public sector banks are pillars of financial sector" (November 23, 2008).

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