Hormis

Title: Hormis – Biography of K P Hormis, Founder of Federal Bank

Author: K P Joseph

Publisher: DC Books, 2016 (First published 2005)

ISBN: 978812641117

Pages: 294

 

This book is the biography of Kulangara Paulo Hormis (1917 – 1988), founder of Federal Bank, the largest private sector bank in Kerala. Even though unable to attract industry, Kerala was a fertile land for financial institutions of various kinds. With an early flourishing of money economy, the need to develop institutions to avail credit was felt among the local people and associations for running chit funds were fairly popular even almost a century ago. These funds slowly evolved into banks, but the very large number of such firms engendered instability and crashes. Eventually, consolidation among banks took place by mergers and takeovers. The Federal Bank rose as a very prominent enterprise in central Kerala led by Hormis, who rose from an ordinary family involved in agriculture and small scale trade. Hormis graduated in law and took over the bank to grow its business and assets manifold. The bank and its leader faced crippling restrictions during the Indira Gandhi era in which high growth would have made the government take over the bank ‘in national interest’. Hormis led the bank through severe crises and remained at the helm till Parkinson’s disease debilitated him. K P Joseph, who is the author, is a former civil servant and one-time consultant of FAO, UN. Joseph has worked in several places in India and abroad and is related to Hormis through his daughter’s in-laws.

 

Hormis had a good education by the day’s standards, having studied at Trichy and Thiruvananthapuram. After attaining a legal degree, he found that refurbishing a failed bank was easier than starting one from scratch. This saved him the legal lacunae in building up a Greenfield financial institution. Travancore Federal Bank was formed in 1931 at Thiruvalla, but had become dysfunctional a few years after. Hormis took over the bank in 1944 and transplanted it to Aluva. He rechristened it as Federal Bank in 1947. Unlike the typical businessman, he openly took sides in politics. Hormis always supported the Congress party and he made a brief foray into electoral politics through that party. In 1954, he contested and won from Perumbavur constituency of Thiru-Kochi assembly, defeating the reputed administrator-cum-writer Malayattoor Ramakrishnan of the CPI. He did not return to politics after that term was over, but lent support to the people’s liberation struggle to oust the EMS ministry in 1959. Hormis retired in 1979, but declined send-off as he waited for a re-appointment by RBI which did not arrive. This shows the amount of discriminatory power wielded by regulatory agencies over private enterprise. Hormis’ outlook for the bank was to promote economic development of the country with particular emphasis to Kerala. He wished to do intensive banking in the state by a network of branches in its every village linking them with branches in all important cities of India.

 

Even though a businessman, Hormis let his political opinion be known to everybody by running for the assembly elections on a Congress ticket. However, he respected the sincerity of early Communist leaders in Kerala, but bemoaned their utopian idealism, senseless violence and fundamentalist approach to problems. Gherao as a strike tool was first used in Kerala against Hormis. He was also manhandled by striking workers. This was only a small price to pay for entrepreneurs who chose to start business in Kerala in the 1960s and 70s. Hormis never believed that a violent revolution would liberate the poor from their poverty. It will only be through empowerment of the poor like inculcation of saving habit, development of social capital, promotion of entrepreneurship and extension of credit to ordinary people. The book presents a very short description of what happened to the banking sector under the first Communist ministry in Kerala. The credit-deposit ratio sank abysmally due to lesser advances. Stagnation in industry and agriculture ate into the profit margins of banking. The economic downturn is attributed to uncertainties in economy due to concerns over the state government’s policy. It also interfered with the deposit regimes of the banks insisting on atrocious and unheard of ratios regarding deposit liabilities and paid up capital (p.163).

 

Hormis was a devout Christian who faithfully practiced what his faith demanded. In addition to regularly attending church services, he contributed his sincere hard work to auxiliary church bodies like the Marian Sodality. While studying for law in Thiruvananthapuram, he joined the Catholic League and stayed in a Catholic hostel run by priests. This religious affiliation prevented him from joining political movements. Diwan Sir C P Ramaswamy Iyer banned political organisations clamouring for responsible government. This left the student community seething in anger. The church was also poised against the diwan due to his perceived antipathy to Christian entrepreneurs in the state. But at this time, Archbishop Mar Ivanios became friendly with the diwan who then gave permission to start a school which later developed into the Mar Ivanios College. Even though a fairly religious person, Hormis retained his power to spot talent in others. While in the bank, he employed people of all faiths in positions of responsibility. His thoughts sometimes proved prophetic. He recommended disinvestment of government equity in existing industries as a way to finance new industries. He had done the homework well and suggested in the legislative assembly to liquidate the shares in Travancore Rayons and Aluminium Industries at 60-70% profit per share and reinvest the money.

 

The author was a civil servant and this book is probably his first. Joseph has employed a condescending style in the book. After writing a paragraph on Hormis, he would churn out several pages on Indian history or political movement of the time even though these may have no relationship to the subject under discussion. The shortsightedness of the author’s vision is amazing. He quotes from a speech made by Sonia Gandhi – whom he calls the architect of the new government that took over in 2004 – and claims that Hormis’ vision was not different from Sonia Gandhi’s! I am sure Hormis wouldn’t have felt flattered had he been alive. Moreover, the author shows an unwarranted partiality to Christian religion throughout the narrative. In one instance, he takes pride on his religion not recognizing castes. While describing the funeral services of Hormis, the author remarks that ‘of all the religions, Christianity is unique in dealing with human life here and hereafter with great optimism and sense of triumph. Of all Christian denominations, Catholicism treats death with the greatest of dignity’ (p.280). He then goes on to reproduce verbatim the church service with prayers and all devotional chants.

 

This book builds a biography up from scratch even though the author seems to be not personally acquainted with the protagonist. For the first thirty years of his subject’s life, the author does not have a clue and looks like using information from a biodata to make the biography. He has not bothered to interview people who had personal friendship with Hormis. This omission leads to a bland narrative that doesn’t do justice to the legendary person. To make up for the shortcoming, Joseph uses his imagination to fill the gaps in. For example, he tells that Hormis went into a reverie of his past life while lying in a hospital bed in a serious condition from which he never recovered. He then lists out a summary of his life as the dying man’s ‘thoughts’. In another part, the speeches made by Hormis and other VIPs on inauguration of new bank branches are reproduced in full. Then comes lengthy quotations from the Bible, Indian and Kerala histories and works of Nehru. These material fill up almost half of the book. Writing sixteen years after the death of his subject, the author is hard pressed to make reading material. The overall impression is that the author has failed to do justice to Hormis’ memory in this book. Incidentally, the book’s reluctance to discuss the thorny issue of bank nationalization in 1969 and how it threatened the comparatively larger Federal Bank is highly disappointing.

 

The book is recommended.

 

Rating: 2 Star