Founder of National Stock Exchange RH Patil is no more

RH Patil 1937-2012

The man who transformed the way Indians traded in stocks, is no more. RH Patil, the founder of National Stock Exchange, died in Mumbai on Thursday. He was 74.

Patil was a trained economist and had little knowledge of technology. He wondered at technology that he did not understand, but knew it could change anything. With this belief he set out to create an alternative to what he believed to be a clannish, century-old equity trading culture dominated by an unruly mob, which claimed the scalp of the then chairman of Sebi, GV Ramakrishna.

The conviction and belief with which he conducted business at the then premier institution, Industrial Development Bank of India (IDBI), made him the first choice of its chairman SS Nadkarni when the newly created regulator Securities & Exchange Board of India and the government wanted to end the reign of broker-ruled exchanges.

Patil moved out of the coveted IDBI Tower to a rented premise in central Mumbai with three key people - Ravi Narain, Chitra Ramakrishna and Ashish Chauhan. Patil trusted them and the rest is history.

"He was unparalleled in terms of professional knowledge,'' says YV Reddy, former RBI governor. "He had not only wisdom, but he mastered theory and practice and the link between macro economics and financial markets."

Patil started off as a research officer in RBI, after which he joined IDBI, then a leading long-term lending institution for industrial projects. It was not an easy ride for an economist facing the might of the stock broking community, which had unlimited powers.

Reddy, then at the finance ministry, in charge of capital markets, leaned on Patil heavily during his stint as joint secretary to modernise the way business was transacted. He identified the three pillars required to transform the market - an electronic trading platform, a clearing corporation, and the securities depositary.

If a young investor does not hear the common lingo of the 80s and 90s - bad deliveries and crores of rupees lost on them - it is due to Patil. If the trading volumes in Indian bourses have surged from an average 300 crore a day to more than a lakh crore now, it is due to Patil's stubbornness in fighting the broker lobby.

"If NSE has achieved market dominance, he was the pioneer who helped it achieve it," says PJ Nayak, chairman of Morgan Stanley in India and a former chief executive at Axis Bank. "Patil was a pioneer in setting new standards for exchanges, which now many people take for granted.''