The Spirit of Enterprise vs. The Science of Numbers
"A great leader is not the one who knows everything, but the one who is willing to learn everything." — Unknown
Our new Chairman and Managing Director (CMD) arrived from the State Bank of India with a reputation as the ultimate authority on Credit Administration. He was a man of strict ground rules. Under his tenure, our department—staffed by fourteen Chartered Accountants and a dozen aspiring credit officers—felt the full weight of his expertise and the sharp sting of his scrutiny.
The Strained Sanction Note
The conflict began with a proposal for a large transport operator. The company had been a satisfactory client for years, but they were now seeking enhanced credit limits to fuel their growing freight business. After a rigorous audit of their requirements, my department submitted a sanction note.
The file returned from the CMD’s cabin as if it had been through a battlefield. His remarks were stringent. He pointed out that the company’s liquidity had been strained by an investment in shares, causing their current ratio to slip below the mandatory 1.33:1—a yardstick set by the RBI’s Chore Committee. "The department has lost its way," he wrote. "I am sorry, the note is declined."
The Classroom in the CMD’s Cabin
I didn’t want to accept the rejection without explaining our viewpoint. I felt the "Art of Banking" was being overlooked for the "Science of Ratios." I requested an audience in his cabin. As I entered, he looked at me with a sharp gaze. "Do you want to disagree with my remarks?" he asked.
"Not disagreeing, sir," I replied politely. "I just want to discuss the reality behind these numbers."
He laid out the case with prosecutor-like precision: the depleted current assets and the "speculative" investment in shares. Technically, he was correct. However, I asked for permission to offer a different perspective.
"Sir," I began, "these are not 'shares' in the sense of stock market speculation. These are strategic keys. Our client bought shares in four specific companies from whom they were soliciting freight business. By becoming a shareholder, they gained the standing to approach those boards and ask for more business."
I showed him the data. "Observe the revenue, sir. Since purchasing these shares, their freight collection has almost doubled. They aren't diversifying away from their business; they are using these shares to open new doors. Do you still wish to see this as a 'diversion' of funds, or as a brilliant business strategy?"
The Nobility of Acceptance
The CMD did not speak for a long time. He leaned back, looking at the ceiling in a profound silence. Then, he did something that only a man of true caliber would do. He pushed back his chair, walked toward me, and shook my hand.
"Mr. N.R.N," he said, "you have opened my eyes. I have always used these parameters to judge a company. Today, you have taught me that the Theory of Banking and the Practice of Banking are two different worlds. If we can combine both judiciously, we will be wise."
He didn't just approve the note. He wrote: "NRN's recommendations fully approved," and signed his name in full.
I left that cabin with a sense of fulfillment that no promotion could provide. To receive such an acknowledgement from a man of his stature was a rare honor.
A true authority is one who has the humility to learn from a subordinate. That day, we both moved beyond the ledgers to become better bankers.