Deshamanya Cyril Herath : The man who ‘resurrected’ NSB

The eighth of September marked the fifth death anniversary of Deshamanya Cyril Herath, former IGP, Defence Secretary, and Chairman of National Savings Bank (NSB), and also a distinguished alumnus of the prestigious University of Ceylon, Peradeniya. On this occasion, we think we have a duty to tell the people of Sri Lanka, the present employees of NSB, and the banking fraternity about some important but unknown facts relating to his unique and monumental contribution to NSB.

The first few years of Mr. Herath’s chairmanship of NSB was marked by turbulence, uncertainty, and challenges in the banking and financial sector. The World Bank’s panacea for all these ills, among others, was privatization.

In their report to the government in the late nineties, the World Bank made certain observations about the NSB, which appeared to be unpalatable and below the belt. We at the NSB at that time felt hurt, embarrassed, insulted, humiliated, and thunderstruck by this report. For obvious reasons we don’t want to quote it verbatim and would only paraphrase the two fundamental observations/recommendations they made.

There is no justification for continuing the operations of NSB.

NSB branches should be sold by auction (they are the very words used) to private and foreign banks; the state owned banks should not be allowed to bid. (Readers may not believe that such a recommendation was ever made but we can vouch for that.)

These recommendations curiously but not surprisingly coincided with the withdrawal of the interest subsidy paid by the Treasury annually to NSB since its inception in 1972. Throughout the years, it was this annual Treasury subsidy that ensured the continued viability of the bank; and this concession had been granted to NSB by statute to enable it to effectively compete with other financial institutions.

Deshamanya Cyril Herath who was the Chairman at the time considered the World Bank recommendation as totally unwarranted, ill timed, and unjustified. He firmly decided that we should not cave in. He and the management resolved with consummate determination to prove that the World Bank was wrong and that a government institution could be run efficiently and profitably without any subsidy provided there was good leadership and efficient management.

NSB employees spread all over Sri Lanka at that time would recall how Mr. Herath and the top management team visited the staff in the branches during weekends. On these visits he addressed them with a view to inspiring and motivating them to meet these challenges and to help realize the bank’s shared vision of achieving excellent bank status by the year 2002. (NSB realized the vision in the targeted year.) After these meetings, Mr. Herath and his team mixed with the staff in a spirit of camaraderie. He won their hearts and trust. All these factors boosted the morale of the staff and they were determined to contribute selflessly.

Any leadership guru will admit that the most crucial ingredient of turning around an organization or for that matter even a country is nothing but strong, genuine, and effective leadership. Mr. Herath possessed the essential qualities such as integrity, humility, intellect, pragmatism, communication ability, and empathy. Above all, he walked the talk and was fearless; he never succumbed to political pressure.

And he conducted himself with dignity and decorum, something very rare today. It was no doubt divine providence that Mr. Herath was Chairman at the worst of times in the history of the NSB; a case of Cometh the hour, cometh the man.

We believe that as a tribute to him it is appropriate to give a few examples of his leadership. We hope the top executives and managers in this country would emulate them to improve their effectiveness and also to win the hearts of their employees.

Believe it or not, he queued up with other employees (including the lowest grade of employees) every morning and waited for his turn to enter the lift to proceed to his office which was on the sixth floor.

He was approachable, and any employee could meet him on Wednesdays without an appointment to have their grievances redressed.

He mixed closely with staff and engaged in banter with everyone at bank get-togethers and parties.

His official vehicle was an unostentatious car (Mitsubishi Lancer and later a Honda Civic).

He was cost conscious and frugal. When travelling abroad, he and the others travelled Economy Class (unless of course it was upgraded by the airline at no extra cost).

When several top executives required to travel outstations or attend any other event the management team including Chairman travelled by a van to cut down costs.

He reemployed a large number of staff and / or restored the pensions of those employees who had been unfairly dismissed by a previous chairman.

He believed in empowering staff and gave them a great deal of freedom.

He never raised his voice when speaking to subordinates and was always conscious of their self-respect.

In passing we need to tell the readers the reason why the country didn’t know about the miraculous turnaround of NSB at that time. It was purely because Mr. Herath by nature was one who did not want to brag about it regardless of the fact that this was an extremely rare, unique and a peerless transformation that warranted and deserved publicity.

It is ingratitude if people particularly the employees and Board members forget the unique contribution Mr. Herath made to the NSB. They should be grateful to President Chandrika Kumaratunga too for appointing the right man at the right time as Chairman, NSB.

In this context, we need to stress that if Sri Lanka had another hundred leaders like Mr. Herath in top positions and among politicians, our country would be among the most developed countries of the world.

On a personal note we think that we were very fortunate, privileged and blessed to work under an exemplary leader of the calibre of Mr. Herath.

His beloved wife, Rani Herath who passed away within one year of his death was a gracious and virtuous lady who made it possible for Mr Herath to fully concentrate on coping with challenges of his job. She graced all events and ceremonies of the bank, mixed with the staff who adored her.

Her presence created a great deal of goodwill among staff that was a significant factor which made it possible for NSB to move to greater heights.

Beloved Sir, on behalf of all the employees of NSB, past and present, we wish you and Mrs. Herath peace and serenity in your sojourn in samsara.

Esbe Balalle and Eastman Narangoda

Former General Managers of NSB.