In a recent conversation with an old colleague, we revisited the complexity and dedication required to implement meaningful process changes in an organization. This reflection brought back one of my most memorable professional experiences—a pivotal moment early in my career that illustrated how transformative change, especially in the banking sector, demands both resilience and courage. Writing this story seemed essential, as the lessons from that time continue to resonate with me.

Banking plays a vital role in any nation’s development. By managing credit through a process called maturity transformation—using short-term deposits to support long-term loans—banks fuel the economic backbone of a country. However, the ideal scenario of all borrowers repaying on time rarely aligns with reality, and defaults disrupt the credit cycle, impacting national growth.

In the mid-1980s, Indian banks, including Punjab National Bank (PNB), where I joined as a Management Trainee, used the Health Code System to classify loans. The Narasimham Committee (1991) saw this system as misaligned with global standards and recommended a more objective, recovery-based approach. In response, the Reserve Bank of India (RBI) mandated new income recognition and provisioning guidelines to strengthen the banking sector’s integrity.

I joined PNB in 1985, and after my initial posting in Aligarh (Uttar Pradesh), I was transferred to the Head Office in 1993. There, I became part of the team responsible for preparing the bank’s balance sheet, specifically focusing on the credit portfolio and bad debt provisions. We were getting the loan classification statements from branches in the old format based on the date of irregularity and we used to classify each loan by calculating their respective Non-Performing Asset (NPA) status based on the past due period and re-calculating the bad debt provisions based on their assessed NPA status.

With the workload surging, we decided to decentralise this process to Zonal Offices, effective from 1995. My task was to create standardised procedures and train zonal staff in NPA classification, provisions, and loan portfolio management.

I was made responsible for the Schedule IX i.e., credit portfolio, bad debts, and related provisions. It was planned that they will do this at their respective zonal offices and then will come to Head Office to work under our supervision to get their statements, provisions etc. discussed and certified by the central statutory auditors. The process was challenging but empowering; explaining this intricate work to Zonal Managers and senior officers, often of much higher rank, was an honour and a career-defining experience.

At the time, Mr. K.I. Singh, the Chief Manager of the Credit Administration Division, humorously held me “responsible” for all the bank’s bad debts. I worked closely with Mr. C.P. Swarnkar, the Deputy General Manager, an esteemed banker who later rose to become the Executive Director of PNB and the Chairman of Syndicate Bank. He’s a great banker whom I admire a lot. Presenting him with my proposed changes—new forms, processes, and detailed formats for loan classification—was both nerve-wracking and thrilling.

The time was not only a time for decentralization but also for continuing with the new system having a potential impact on the quality of the bank’s credit portfolio along with the bank’s profitability. The NPA classification was a new thing and it’s going to say for a long period. I thought that although we are sending circulars to the branches, we must trust them in adopting the new classification guidelines in the right manner. I came to the Head Office from field and so I had more faith on the capabilities of the field functionaries.

I proposed to Mr. Singh a revised format of the detailed loan-wise statement of position and also the format for the register that we use at the Head Office for consolidating and summarizing the loan portfolio for the schedule IX of the balance sheet of the bank. He took it to Mr. Swarnkar.

“We are products of our past, but we don’t have to be prisoners of it.”

Rick Warren, The Purpose Driven Life: What on Earth Am I Here for?

Mr. Swarnkar called me and one of my colleagues, Mr. MP Sharma, along with Mr. Singh for a discussion. It was then the month of November, and it was then getting cold in Delhi. Mr. Swarnkar asked me for the details, and I explained to him the details about the changes and the purpose. He doubted that these changes might cause a huge impact on the bank’s profitability for which he would be held responsible. He kept quiet for some time, and we could see the sweat on his forehead. He was very much worried about the risks involved in the change. He liked the idea, but he was not sure whether he would bet on my recommended changes. Understandably, Mr. Swarnkar hesitated; the suggested changes could significantly impact the bank’s profitability, and he would have to bear the responsibility

Don’t underestimate Small Humble Beginnings, because sometimes they can turn out to be the Greatest Success Stories.

Jeanette Coron

He asked me what if the experiment went wrong then what would happen. To go back to the present system would be time-consuming, which delay the publication of the bank’s balance sheet and that would make the Reserve Bank levy penalty on the bank and also the bank’s reputation would be at stake.

“Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.”

Harriet Tubman

I was confident and had trust in getting the plan a successful endeavour. I prefer to burn the ships behind. In 334 BCE, Alexander the Great attacked the Persian Empire, one of his most formidable enemies. Upon reaching the Persian shore, he instructed his men to burn their boats. Alexander said to his men, “Either we will return in Persian ships, or we will perish here.” In the year 1519, Hernán Cortés arrived in Mexico with six hundred men and, upon arrival, made history by destroying his ships. This sent a clear message to his men: There is no turning back.

If you leave the ships in the harbour, your people will see that you’re not fully committing to the transition needed. Burning your ships doesn’t mean you can’t ever change course or decide that a current pursuit is not working. But no change process has a chance of working if your team has an off-ramp.

I reassured him that, even in the worst-case scenario, I was fully prepared to revert to the original system within a strict timeframe if needed. I requested a handpicked team of officers from all the zonal offices, along with accommodations at the Central Staff College, so that we could work intensively to recreate the statements in the original format. I assured him that we would review every loan account and prepare a new statement in the existing format within 15 days.

After a silence of around 10 minutes, he said that he would discuss this with General Manager and the Chairman-cum-Managing Director. I don’t know what moved him, was it my idea to change, my confidence, or both! Mr. Sharma told me when we were out of his office that he was scared as my idea might have caused a stroke, the way he was perspiring in the cold.

“And that is how change happens. One gesture. One person. One moment at a time.”

Libba Bray, The Sweet Far Thing

The next day, he called me and Mr. Singh. He said that he got the consent to go with the change, but I would be responsible for any untoward happening and I would have a maximum of 15 days to rectify any unpleasant situation. I would get what I wanted to get the corrections done. Ultimately, his approval signified trust in the team and my vision.

“All things are difficult before they are easy.”

Thomas Fuller

With the zonal officers engaged and committed, we rolled out the new process smoothly, earning appreciation from the statutory auditors. That accomplishment marked the start of a new era in PNB’s loan management and classification, which became a model of efficiency.

We, all who were involved in the exercise, worked as a coherent team with enthusiasm to succeed and determined not to fall back. The officers and Managers from Zonal Offices were also excited to be involved in the exercise. With the zonal officers engaged and committed, we rolled out the new process smoothly, earning appreciation from the statutory auditors. That accomplishment marked the start of a new era in PNB’s loan management and classification, which became a model of efficiency.

“If you want to take the island, then burn your boats. With absolute commitment come the insights that create real victory.”

Tony Robbins

The success we achieved called for celebration, so our team organized a weekend trip to Lansdowne. Though mishaps abounded on that journey, the camaraderie and joy of the experience made it unforgettable.

The revised loan classification process we introduced stayed in practice until PNB transitioned to a core banking system. Looking back, it was gratifying to witness senior officials seeking my guidance on complex provisions, and I feel truly blessed to have gained their trust and respect.

I had to do some extra efforts with the central statutory auditors to arrive at a conclusion and finalize the classifications and provisions to cover up for the inexperience of my colleagues from the zones. That was my job, which I enjoyed.

Reflecting on this journey reminds me of how one person’s idea, with teamwork and determination, can create lasting change. This experience taught me that innovation is often born from humble beginnings, but with unwavering commitment, it can lead to transformative success.