Banking (Juris)Prudence

Author: G R K Murty 

Indian banks have been quite fortunate that the crisis faced by the international banking community has left them pretty unscathed—so far at any rate. They have, perhaps, benefited from the fact that they have not strayed too far from the basic ground rules governing the banking business. ‘Pure banking, nothing else’ seems to have served the Indian banks, especially those in the public sector, rather well. Mercifully, they remain relatively robust.

Even so, the contagion of the international banking crisis is still quite virulent, and it is not as though the Indian banks are completely immune to the serious afflictions besieging their international counterparts. And it does not really need a seer to point out the elementary fact—though many management pundits have done it—that when faced with a crisis, the secret of survival lies in going back to the basics and getting them right.

A fairly large number of new entrants to the Indian banking system are struggling with the mind-boggling challenges of operating in a globalized and extremely complicated business environment in myriad innovative ways. In the tsunami of innovations in business process reengineering and technological leapfrogging, it is understandable, without being acceptable, that today’s banker generally, and in India in particular, is not able to give attention to the basics. He is too busy for tomes like M L Tannan’s great book on banking law and practice, which, decades back, used to put the career banker through the paces, but does not, regrettably, seem to enjoy the patronage of today’s generation of initiates into banking to the same extent. Probably, the size and scope of the book daunt the uninitiated first-time user.

 

But it cannot be gainsaid that legal illiteracy would adversely impact the efficiency of the Indian banking system. Access to new technology and techniques of management are no substitute to a reasonably thorough knowledge of the rules of the game.

G R K Murty’s book, Banking and The Law: A User’s Manual, seeks to equip the Indian banker with the essentials of critically important statutes relating to banking. In crisply written chapters, the book gives more than a bird’s eye view of the gamut of Indian statutes having a bearing on banking. From the time-tested and quite wonderfully adequate Indian Contract Act to the IT Act 2000 to the SRFAESI Act 2000, the book covers a large canvas and does so in a lucid, succinct and convincing way.

Conscious perhaps of the soporific potential of the subject dealt with, Murty brings the full range of his extensive experience in the training of bank personnel into play and comes up with an eminently readable book. The treatment of the subject throughout the book is contemporary and laced with appropriate and relevant case law.

It is difficult, especially while essaying the subject of law, to do full justice to both the theory and practice and make it interesting as well. The author walks the tightrope with consummate skill. The most distinguishing trait in his treatment of the subject is intelligibility, that one does not have to read and re-read the text and keep going back and forth to make sense of the subject. It is quite easy to get the gist in one reading.

For someone looking for interesting and adequate coverage of all statutes relevant to the modern Indian banker between the covers of one none-too-fat and readable volume, Murty’s book is the one to reach for.

M Hanumantha Rao

Former Deputy General Manager,

State Bank of India.