The-Polyester-Prince

The Pai’s prided themselves on being discoverers and nurturers of talent. A small
museum at Manipal is devoted to the family patriarch T. M. A. Pai (older brother of T
A. Pai) and his teachings. One cherished precept: ’A pygmy nourished well can
become a giant.’
According to K. K. Pai, a family member who eventually became general manager of
the Syndicate Bank. Dhirubhai was introduced to TA. Pai in the mid- 1960s by a
former bank employee named H. P Rao, who was an insurance agent. The bank was
interested in developing its foreign exchange activities, and began handling some
transactions for the young spice and textile trader. ‘Our first impression was that he
was very enthusiastic, very enterprising, a man of ideas,’s Pai said. ‘From the
beginning I had the impression he was a go-getter. He was very persuasive, very
convincing in his arguments. He was able to present his case and business proposals
very clearly. He gave me the impression he was reliable and knew what he was
doing.’s The Syndicate Bank became the main financier for Reliance Textile
Industries when it started manufacturing soon after, in 1966, providing much of the
Rs 1,5 million needed to buy the first four knitting machines. Another early backer
was the Industrial Credit and Investment Corporation of India (ICICI), whose
chairman Harkisan Das Parekh, another Gujarati, also took a shine to Dhirubhai’s big
schemes.
Dhirubhai continued to impress the Pais by his insistence on the best equipment and
personnel, as well as his knowledge of the market and its trends. He also made
conspicuous donations to the educational institutes run by the family. Throughout
the late 1960s, Dhirubhai kept in close touch with T A. Pai, making sure he was
among the first to call whenever the bank chief visited Bombay from Manipal, and to
give Pai advance notice of ‘any major initiatives. Pai’s nephew Ramdas Pai, who later
became president of the Manipal Academy of Higher Education hears Dhirubhai
coming to Bombay airport in 1968 to greet him on his first trip back from studies in
the United States. T A. Pai in turn promoted Reliance where he could, even to the
point of carrying around samples of its Vimal-brand material in his brief- case to
show others.
The bank continued to be the major lending institution for Reliance even after Indira
Gandhi nationalised it and all India other leading banks and insurance firms in July
1969. Although the Pais were unhappy about losing their asset, family members like
K. K. Pai continued to hold the top executive positions for many years. T A. Pai’s
policies of directing credit to small entrepreneurs, agriculturalists and business new
corners which built up a portfolio of very small but sound loans for the bank-were
exactly what Indira had hoped to achieve by the bank nationalisation generally.
Ironically, the government takeover led to the steady bureaucratisation of
management and lending directed by political connections rather than commercial
viability.
This destroyed the soundness of the Syndicate Bank and all the other 20 nationalised
banks. By the end of the 1980s, the banks’ nonperforming assets or bad loans
greatly exceeded their capital base by a wide margin, and but for endless capital
infusions by the treasury almost all would have become insolvent. When private
sector banking was again encouraged, after the 1991 liberalising reforms, the Pai
family took over a small southern-based institution, the Lord Krishna Bank. If offered
the chance to buy back the Syndicate Bank, family members said, they would refuse
it. Immediately after his bank was taken away, Indira consoled T A. Pai by drafting
him to apply his ideas as the first chairman of the nationalised Life Insurance