Rivers themselves do
not drink of the water they carry
Trees do not eat of the fruits they bear
Clouds do not partake of the rains they produce
For, the riches of the good are utilised for the welfare of others.
Sriram V, the author of the book on
Sundaram Finance Limited (SFL), brought out on the occasion of the Diamond
Jubilee of the Company, quotes the above translation of a Sanskrit verse to
describe the manner in which T.S. Santhanam led his life and steered Sundaram
Finance Ltd. of the TVS Group.
The book is in many ways the history of growth and development
of the road transport industry in India and the efforts of T.S. Santhanam and
SFL to make affordable finance available to a vital but vulnerable section of a
newly independent nation. It is also a story of entrepreneurship, innovation
and pioneering spirit, says T.T. Srinivasaraghavan, the present MD of SFL in
his Foreword.
The story begins with several businesses being carried forward
in the name of T.V.Sundaram Iyengar, the founder of the Group. These were
related to auto component manufacture and the retailing of automobiles and
spares. Venturing into the area of automobile finance was left to his fourth
son, T S Santhanam.
As early as 1948 Madras Motor Insurance Company (MMI) came into
existence with Santhanam as its MD. The Company branched into other areas of
general insurance, fire and marine in 1960, when it changed its name to Madras
Motor and General Insurance Company (MMGI). While this business was doing well,
Santhanam was already looking at growing his pet project, Sundaram Finance.
Thanks to his involvement with the Motor Vehicle & Allied
Industries Association, he was aware of the non-availability of easy finance
for operators and fleet owners. While banks dealt only with large commercial
establishments, the small fleet owners were left high and dry. According to
Santhanam, it was these transporters who persuaded him to get into the finance
business. Till the end of his life he would always maintain that Sundaram
Finance was established for the welfare of truck and bus operators.
Sundaram Finance came into existence on August 11, 1954 as a subsidiary of
MMGI. Among the first loans from the company was one to a VIP customer, M. G.
Ramachandran, who received a loan of Rs. 66,000 at 7.5 per cent interest for
the purchase of a new Fiat car.
“Due to Sundaram Finance
loaning money at reasonable rates, cleaners and drivers could realise their
dreams of becoming vehicle owners. Single vehicle operators began to aim at
maintaining a fleet. To every one of them, Santhanam became an icon to be
looked up to. And as he studied the business with increased focus, he was to
see that both the road transport industry and its financing were to go hand in
hand,” says Sriram. He adds, “Santhanam envisaged SFL to be a bank in
everything but name and that meant welcoming depositors. At SFL, depositors
were handled with kid gloves. There were all kinds of things SFL did for its
depositors, long before customer delight became a buzzword. As for the face of
SFL, Santhanam was to be it. Cheques sometimes arrived simply addressed to
‘Santhanam Company’!”
The South India Hire Purchase Association (SIHPA) came into existence in 1967,
with the Sundaram Finance office as its registered address. It was an
organisation that was very close to Santhanam’s heart. In 1975, with the
country having over a dozen regional hire purchase associations, there was born
the Federation of Indian Hire Purchase Associations (FIHPA) with its
headquarters in Delhi.
This was also the time when the TVS Group entered the manufacturing field, with
SFL, in particular, providing financial support during the setting
up of the various companies.
In order to run the business on professional lines, right from the beginning
Santhanam focussed on systems. To cut down on delays occurring from unnecessary
paper work, SFL was computerised way back in 1968. According to an IIMB case
study done at the time, the backbone of SFL was its personalised intelligence
network.
It was in the 1980s that SFL began venturing north of the Vindhyas for the
first time. As SFL spread its network in the North, its business methods were
to give rise to slogans like Sundaram ka paisa Balaji ka paisa (meaning money
loaned by SFL was God’s money). The other popular expression was Sundaram ka
paisa phulta hai – borrowing money from SFL brought prosperity. By early 2000
SFL had spread across the length and breadth of the country. SFL, today, has
over 500 branches and 2 lakh depositors and borrowers. Apart from vehicle
finance, the Company now offers loans through its subsidiaries to finance
homes, tractors, etc.
Quoting Srinivasaraghavan, who joined the company in 1983, Sriram says, “The
reason for the success of SFL is that the organisation functioned as a kind of
gurukulam – the traditional Indian way of learning, where the student is a
disciple-in-residence with the Guru and imbibes what he has to teach through a
kind of mental osmosis. The teacher in question was Santhanam. Others ensured
that his philosophy and way of doing business were kept intact and continued
forward. Not that Santhanam ever really took a back seat. Almost till
the very end, and he was to live well into his nineties, he was very
much a presence at the office.”
While SFL has been known since its inception for the best
practices it follows like knowing the customer, not compromising on principles,
remaining close to core strength, another constant is one of support to
organisations connected with art and culture, healthcare and heritage. Apart
from major institutions, SFL encourages children’s participation in art and
craft, music and personality development, through year-round programmes. Chief
of these is the ‘Concert at the Park‘ series wherein young children who are
proficient in Carnatic music are encouraged to perform at the Nageswara Rao
Pantulu Park in Mylapore on Sunday mornings.
Perhaps a more visible sign of the Company’s involvement with culture and local
traditions is the Sundaram Finance Mylapore Festival, started by the weekly
tabloid, Mylapore Times. Celebrated every January, it is a people’s festival
that is marked by the enthusiastic participation of the community.
SFL began its journey chiefly as Santhanam’s dream. The naysayers were plenty,
but he alone saw what others did not – that there existed a space for a company
that would handle vehicle finance on professional and ethical terms. He also
envisioned it as a safe investment opportunity for countless people of India who
brought all their little to him and his company. He considered himself
answerable to each of them and it was this trust and goodwill that enabled the
Company to grow. That the banks and financial institutions came forward to fund
the growth of SFL is really an outcome of the way SFL stood by its depositors
and customers. It was the value system of the Company that enabled its growth
and which has remained constant over time. Today, Viji Santhanam, the youngest
son of Santhanam, heads the Company.
From Madras Musings issue dt. 1-15th Sep.2015. based on the book `Sixty Years of Trust- The Sundaram Finance Story by V.Sriram
