Palai Central Bank - Beginning

Beginning

The Bank was founded in 1927 by Joseph Augusti Kayalackakom in Pala (Palai), a small town in the central part of the then native state of Travancore (which later became part of the Kerala State). His Uncle, Augusti Mathai Kayalackakom, funded the start up capital. Joseph Augusti, who belonged to a family of agriculturists and traders, had carried on some other businesses before going into banking. He had run textile business initially in Pala, and later on in Thiruvananthapuram (Trivandrum) in 1910, besides bus service in Thiruvananthapuram from 1913 onwards.

Some of the major Banks in India were formed during the beginning of last century. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. In 1921 Imperial Bank of India was established through the amalgamation of three Presidency Banks which were earlier set up by the English East India Company. The native states of Travancore and Cochin, as well as Malabar forming part of Madras Presidency, also saw the formation of many banks.

It was in this scenario that a bank by name ‘The Central Bank Limited’ was started by Joseph Augusti in Palai in 1927. It was incorporated under the Travancore Companies Regulation 1092 with the following persons as the initial Promoter-Directors:-

• Chairman: Augusti Mathai Kayalackakom
• Mg. Director: Joseph Augusti Kayalackakom
• Directors: Outha Ouseph Thottumkal, Varkey Ouseph Vellookunnel, Cheriyathu Thommen Menamparambil, George Joseph Kottukappallil and Jacob Cherian Maruthikkunnel

The Bank was on a growth track right from the beginning. Its style of functioning was quite different from the other banks of the day. It was more of 'mass banking' than the 'class banking' practised by other banks of those days. This was a welcome change for the people who, for their needs, had largely depended on small moneylenders, most of whom were from Kalladaikurichi in Tamil Nadu. The Tamilians were charging exorbitant rates of interest on loans.

In 1929, when the Great Depression struck and Travancore's plantation sector was badly hit, the Bank gave liberal assistance to the plantations. The Bank, which later changed its name to ‘Palai Central Bank’, started expanding its activities by opening branches at several places. When the Bank opened a branch in New Delhi, India's new capital city in 1932, it was the very first bank to do so, ahead of even the established north-Indian banks. The Bank also discovered the potential of Aluva (Alwaye) by opening a branch there, years before Aluva became a major industrial town.

In 1935, the Bank introduced electricity in its head office building in Pala by installing oil-powered generator, years before Government's first power project was commissioned at Pallivasal and electricity became common. The Bank was also a pioneer in introducing modern advertising, which was quite different from the staid advertisements of other banks of the day.

Employees – both executives and staff – were trained to project the Bank's motto of customer service. A young boy coming to deposit the scholarship amount he got received the same service that large depositors enjoyed. It was, therefore, natural that years later, when the bright youngster became District Collector, he still regarded the Bank as 'his' bank. The Bank’s branch managers followed an ‘open door’ policy making them accessible to everyone. This was in sharp contrast with their counterparts of the Imperial Bank of India, who were totally unapproachable to the common man. The Bank's managers, KM Joseph and later KM Augustine in Thiruvananthapuram, George Joseph in Chennai (Madras), KM Chacko in Nagercoil, C J Thomas in Delhi and others enjoyed exceptional popularity and influence.