Wednesday, 31 July 2019

A lot can happen over a cup of coffee.

When VG Siddharth founder of Cafe Coffee Day (CCD), designed this tag line - A LOT CAN HAPPEN OVER A CUP OF COFFEE, perhaps nobody has  envisaged that this (his tragic death) could also happen.

When N T RamaRao died in the year 1996, Deccan Chronicle a daily from Hyderabad wrote an editorial on his death which was not so natural. There, the editor had mentioned a quote from - F Scott Fitzgerald, an American fiction writer. His quote was - Show me an hero, I will write a tragedy for him. This quote of Fitzgerald perhaps applies in case of VG Siddharth's death too.

Siddharth was a quiet, unassuming and self-effacing entrepreneur who shunned limelight and publicity. Many don't know the size of the business empire he has built. Only after his death that the world is aware of the scale and size of his operations.

His main grouse in his death note is against the Income Tax authorities. He says in that that IT authorities have harassed him and the raids on his business has caused him enormous damage to his business prospects from which he could not resuscitate himself and finally gave in to the stress in the form of his suicide. There may be other reasons too which at this stage cannot be deciphered. Only thorough investigation can throw some light on  the entire episode. It is said that the simultaneous raids on his premises across twenty two locations has sent the share prices plummeting to new lows thus causing large scale erosion of his asset value. Ever since he was missing and found dead in Nethravathi river there was a hue and cry over the high handedness of IT authorities and many termed it as Tax terrorism unleashed by the ruling dispensation. Also the IT authorities have clarified that they have proceeded as per law. This difference in perception of the issue between IT and rest of world is always debatable, but the fact remains that it has caused irreparable loss to the business, reputational as well as monetary.

This particular charge against IT brings to the surface another most important damage. The raids spree by IT authorities will be a serious jolt to the spirit of entrepreneurship in general. This negative sentiment will make the prospective entrepreneurs not to stick their neck out, there by people not only lose the existing jobs but also creation of new jobs becomes almost impossible because no Entrepreneur/Industrialist will ever come forward to venture into any new business. A negative business sentiment will pervade all through the capitalists who would otherwise have invested. Modi's favorite slogan of - ease of doing business will remain a mere slogan.

Siddharth, despite whatever may be the challenges, difficulties and obstacles should not have resorted to this kind of act. Because according to his own averment, the value of his assets is much more than the loans owed to the creditors. He could have been tenacious and persistent for some more time for the liquidity crunch to get over. He has failed to face the adversity with aplomb. This is most probably due to the fact that he all along kept these things to himself without discussing / sharing atleast with his friends and well wishers who could have given some guidance or shown the way. Life is too precious to be frittered away in the way he did.

The successful person therefore is not the one who is successful but the one who faces adversities, challenge the challenges and still hold his head high when chips are down and hope is distant. 

That's why there is a pressing need for all of us to discuss our failures essentially with our kids so that they should be mentally prepared to accept failures in their lives someday in future if they come across them. We should not make the mistake of always talking about success stories. Because success and failures are the two sides of our lives.

I pray God to give strength to the family of the bereaved and thousands of his staff to bear the loss. May his soul rest in peace.

Friday, 24 May 2019

Has Rahul Gandhi written the - epitaph for the Congress?

The much awaited results of the 2019 Loksabha election are out. The BJP has recorded a resounding victory. It has even bettered its own record of 2014. The enormity of the victory is such that it has dumbfounded even its own conservative analysts /poll pundits.

The moot point to be discussed here is more of opposition's failure rather than Modi's performance. The disparate and splintered opposition parties could not convince the voter of their commitment to come together and carry on the business of governance. This was very crucial simply because Congress's revival was considered a task of a tall order. Also congress failed to see the writing on the wall. It was in a wishful thinking that Modi's non keeping of his poll promises and his misdemeanor of demonetiization, GST etc would sail them through. What it also failed to appreciate is the fact that Modi provided a scandal free regime unlike them. The opposition, the
congress included really failed to match the fire power, the lung power and the muscle power of the BJP. They were clearly a distant second. And in organizational preparedness they were no match to the well oiled BJPs party cadres. One of the plus points that BJP had, was the RSS, its mentor, guide and philosopher. It had always guided, corrected and channelised the enormous resources of BJP - men, material and money to optimum levels. The opposition at no point of time sat up and took notice of how destructive the Modi and Shah combination could be to their survival. They couldn't do because they were in complete disarray and spent time in wishful thinking. Rahul Gandhi though he made some noices here and there, was drowned in the crescendo of the Modi and his ever ready brigade of enthusiast party cadres.

What many including the opposition could not really saw is the subtle undercurrent of a pro hindutva desire that was in hibernating status. The Pulwama and Balakot incidents were the real trigger for this undercurrent to manifest to the mainstream. This is the watershed moment in the entire election campaign which was vicious, vitriolic and without discussing the real issues confronting the common man. Many times it degenerated to personal and derogatory.

This victory has enhanced the responsibility of the government to be more responsible, fair and judicious to all sections of the society.

Perhaps Rahul Gandhi would have now realized that Modi as a rival is too intimidating and overwhelming for him. Probably this is the reason why he has reportedly offered to step down. Congress lost the game long ago when they sent Pranab Mukherjee to the Raisina hills. Instead they would have done well by projecting him as the Prime ministerial candidate. This would have atleast increased its longevity. Hoisting a novice on the grand old party, a party full of seniors and most experienced politicians and not looking outside the Gandhi family for leadership, congress committed a blunder and it is too late to undo the damage.

Monday, 1 October 2018

The Loan waiver & the Loan recovery.

Loan waiver and loan recovery are two polar opposites. They don't have a meeting point. They cannot converge as they are divergent. The bankers' task now is, how to achieve these both ends meet. The obnoxious and oft-repeated press statements by the Chief Minister instructing police authorities to arrest the bank officers if they issue the notice of recovery of loan has set the cat among the pigeons. This is a grave and extraordinary situation in the state which is unprecedented. This has devastated their morale. The loan waiver is spereheaded by the head of the government with all the pomp and public gaze where as the recovery has to be made by a poor official at the branch level without any support or protection from his superiors. Will he be left to fend for himself, is my fear. The poor fellow has a daunting task on hand.

Loan waiver is fraught with long term implications which will breed the culture of non repayment. It is a very negative and dangerous indulgence. No Economist hitherto has advocated waiver as a remedy for the farmers'distress. Government /economists /planners can think of alternative ways of ameliorating the hardship of the farmers. Unfortunately for the political class, farm loan waiver is a low hanging fruit in vote bank politics. Indian farmer is frequently affected by the vagaries of the monsoon and uncertain market conditions. When such is the case, waiver is not the panacea. It is rubbing salt to the wound for the banks which are already saddled with unacceptable level of bad loans. At a time when banks are struggling to bring down the NPAs, the announcement of loan waiver is a big jolt to their efforts.

The top executives are also in a great dilemma. Neither they can issue any written instructions to the branch functionaries not to issue the notices to the farmers nor have the gumption to say to the Chief Minister not to issue statements like the way he is doing. If the bankers do not issue the notices, they are liable to be made accountable by the Bank for the lapse and if they issue, the situation is any body's guess. The officials are in such an unenviable position that they are damned if they do, damned if they not. Whatever may be the constraints of the management, time has come to sit up and take notice of creation of a very negative and hostile atmosphere for the grassroot level officials of the bank.

There is an urgent need to educate the the Chief Minister of the immense damage his statements cause to the safety and morale of the bankers and the long term negative impact it will have on the entire farm credit dispensation. Loan waiver is a double edged sword, it cuts both ways. While on one side, it incentivise the defaulter on the other it demotivates the honest borrower and makes him become a wilful defaulter. In short, it vitiates the repayment culture of the borrowers and make life difficult for the banker.

State Level Bankers Committee's (SLBC) role now assumes importance. It has its task cut out if at all it is serious of the situation. The present situation demands lot of education, persuation and perseverance on the part of all the stake holders - the bankers, the government and the farmers. It is just not the waiver per say that is involved in the issue but the whole perception and attitudes has to be corrected.

What can be done?

1. All the heads of the banks affected by this should meet the Chief Minister and protest his remarks in the media. Loan waiver is one thing and giving dangerous and irresponsible statements is another. (But will anybody bell the cat is a million dollar question).

2. Explain him the negative impact it is creating on the credit discipline and the potential it has to breed a culture of non repayment.

3. Arrange a discussion in the electronic media by a panel consisting of RBI representatives, bankers and raitha sangha leaders and explain the intricacies of the issue and the advantages/benefits for prompt repayer. This should be done periodically for certain periods of time.

4. Publicize in daily local vernacular press the Rinn samaadhan (OTS) its details and benefits in bold captions and in front pages.

5. Conduct townhall meeting type of gathering in Agri intensive areas and play a suitably designed / tailored videos mounted on mobile vans that inspire and instill repayment.

6. These mobile vans should tour the Agri intensive pockets.

And in all these, the ghosts of Vijay Mallya, Nirav Modi, the Essars, the Videocons etc will definitely haunt the bankers. The thousands of crores of Corporate loans written off will stare in the face of the bankers. This is something that will weigh on the spirit and drive of the banker in this marathon.

K N Krishnan,           94496 12446
Vice President, SEWA, Bangalore.

Saturday, 8 September 2018

Shades of customer service.

Just a few days ago my mother in law expired after a prolonged illness. She was terminally ill for over six months.

To complete the process of cremation an undertaker in a crematorium was identified and was entrusted the job. Entire task was entrusted to him. Our job is just to take the body to crematorium.

At the appointed time we took the body to the crematorium. He received us at the gate and directed us to place the body on a particular platform that was meant to perform the last rituals before the body was offered to funeral pyre. The moment the body was unmounted, he took over the proceedings and was in full control of the things. He had by then ensured that all the items required are in place. He was directing us to perform the rituals in a particular order. He has become an expert in the matter. He is unkempt, not shaven but appeared a little drunken ( perhaps it is quintessential to do that kind of job). While he was directing the things, another two bodies arrived. He was simultaneously directing those bodies to the other vacant platforms and asked them to be in preparedness to perform the rituals.

As soon as we finished the rituals, he asked us to lift the body to the final stage where a bed of firewood was already stacked. After the body was placed on the bed of firewood, he started stacking up another layer of firewood on the body. In the meanwhile another body arrived. He was directing them to another platform. Finally he asked each one of us to place a stick on the body. He asked the person from our family who had been identified to perform the last rites to lit the funeral pyre.

By then I took a count of the bodies already on fire. It was 13. Another three are waiting. There is also lot of rush (customers) for him. But he was managing so ably at least we had not any occasion to be in grumbling against that ugly undertaker. He gave us service which is our money's worth.

The purpose of me narrating this was just to bring out the commitment, the sincerity and the (customer) service he provided for us. (Sorry for speaking the language of banking even in the graveyard. Afterall that is the disease  we are suffering from of late and I may not be an exception). He has no threat of competition what so ever for his profession, he is the one and only destination. On top of it a continuous stream of bodies were arriving (customers rush), he had to manage the crowd. He could have been arrogant, audacious and negligent. But he was not. All along I was observing the way he handled the job. He did it ably. Never I found him perfunctory. He was cool calm and focused. He is illiterate, uneducated and people may call him uncivilized. But he executed an uncivilized job in a civilized manner. But still I found a spark of customer service in the lowliest of the profession one could imagine on the earth.

Can we juxtapose this with the circumstances in the Bank? This comparison might appear to be outlandish and outrageous but somehow it caught my attention and I am so sorry for being so uncivilized to talk something in a graveyard and a Bank simultaneously. Afterall, I am a Banker too.

Sometimes - The greatest truths are the simplest.

Sunday, 12 August 2018

Amendment to anti corruption law.

In the aftermath of unearthing of the PNB scam, I wrote an article in my blog titled - "The PNB fiasco and the credibility of the bankers". This is still available in the blog which is dated 9th February 2018.

After reading this article, one of the top executives of our Bank at Corporate center what's apped me a short story which went something like this. It may not be the exact verbatim but the message is not lost.

Quote : A Buffalo was found running helter skelter and in great consternation. It was accosted by another Buffalo. The second Buffalo asked the first as to why it is running. The first replied, the government has ordered the arrest of all the cows and therefore I am running away. But you are not the cow. True, said the first one, but if I am arrested it takes 20 years to prove that I am not a cow. On hearing this the second Buffalo also ran away along with the first one.

Unquote : I didn't understand why he send this story nor did I appreciate the import of the message inherent in the story at that point of time. When the backdrop of the recent amendment to anti corruption law was discussed, I could appreciate and relate the morale of the story. It was argued that the indiscriminate arrest of the bankers by the investigative agencies whenever a loan turned bad has a debilitating effect on the ability of the banker to take a commercial decision to lend. This fear psychosis among the bankers has slowed down the credit off take and has an adverse effect on the growth of the economy. The IBA too had expressed its concern and in fact had taken up the matter with the government. The credit for amending the law should go to the finance minister Arun Jaitely without whose initiative, the amendment would not have seen the light of the day. He being the lawyer cum finance minister could understand the need for an amendment to the act and also succeeded in getting the amendment passed in parliament. The amendment to the law now requires permission from the appropriate higher authority to arrest an officer / banker. To that extent a safeguard clause has been inserted into the law. Whether this alone will suffice to allay the fears of the lenders has to be seen with the passage of time.

Now that, the concern of the bankers and IBA has been addressed by the government, it is expected that lending business will kickstart. The amendment to the anti corruption law may not be the  panacea for the poor credit off take. The problem requires a holistic treatment of the other enabling stimulators like quick disposal of cases before NCLT and NACLT etc.

Thursday, 28 June 2018

The disenchantment

A few months back, I got an anonymous call. The person at the other end enquired me about how much salary a four years senior clerk in your Bank would draw. I asked why?  He told me that a marriage proposal has come from a boy who is working in your Bank. When I gave the information he wanted, he exclaimed! Sir, only that much? I thought it must be much more.

I just would like to juxtapose this with the statistics thrown out by the recently held clerical examination held in Bangalore. The attendance at the exam tells the story better than the words. The attendance for the first stage of examination is 40%. This is woefully low. This perhaps is the lowest so far in the history of banking recruitment. What could be the the reason / reasons for this abysmally low turnout? Is it on account of abundant job opportunities outside banking? I don't think so. The job opportunitiy outside also is not rosy either. Notwithstanding not a robust  job opportunity outside, the poor response to our banking examination is a pointer to the grim realities in the banking businesses.

Banking industry is in the news constantly for all the wrong reasons. Issues like, huge NPAs, frauds and resultant losses would have taken the sheen off from banking job. While this is the story for outsiders, the story for the insiders (staff) is no better either. The bank is grappling with acute shortage of staff. Post merger, it was thought that the problem would ease. But unfortunately it has aggravated further putting the staff under tremendous pressure. As if adding salt to the wound is frequent transfers. On top of this is not so attractive salary package viz., the other PSU counterparts. Even the state government employees draw better emoluments in similar positions, let alone PSU counterparts. All these factors would have adversely affected the psyche of the prospective candidates to take up the banking recruitment test. The poor turnout for the examination is perhaps reflective of the DISENCHANTMENT of the people about bank job which is not a positive sign. If concrete and concerted efforts are not put in place to reverse this negative perception about Bank jobs, it will be dissastrous. After all, the all important assets of a financial institution is its live assets called its employees. If these live assets are demotivated and frustrated, then the handling of dead stock assets by this human assets will not be appropriate. The result of this is left to one's imagination. Because, it is the employees who carry forward any organization.

K N Krishnan.

Saturday, 23 June 2018

NPAs and Frauds - the double whammy for Banks

A couple of days back, a what's app message and a video clip was going viral among the employees of banks. It is reportedly of an assault by the son of a woman borrower on the bank official when he visited the borrower for recovery of loan which has become NPA. It is reported that he was assaulted with iron rods. The fact that the General Manager of the network was briefing the press about the incident confirms the occurrence of the incident.

It is not a one-off incident. Such incidents happen across the length and breadth of the country but many go unnoticed or unreported. Even in Karnataka there are incidents of farmers threatening with dire consequences if the bank officials venture into their villages for recovery of loans. And there are examples of manhandling also.

What does all this indicate? Where from these borrowers get that audacity and arrogance. These are the moot questions that needs to be answered. But those who needs to be answered are burying their heads in the sand. May be it is banks top hierarchy, or the police or the political class or all who refuses to acknowledge that there is an elephant in the room.

This looking at the other way by these functionaries when they are suppose to take punitive action has emboldened the borrowers to take law into their hands. There is one more factor which has given these borrowers some semblance of moral legitimacy to their illegitimate behavior. What is that? This is what I have mentioned in my caption. The proverbial NPAs and the recent and all too sudden spurt in frauds. This is dangerous; has far reaching and widespread implications on the banks ability to lend and recover. The frauds have become a commonplace in the newspaper and is being reported with such an alarming regularity as if they are reporting weather conditions. The inability of the Banks or its supervisor the RBI or their master i.e, the government to take any action when lakhs of cores are classified as NPAs and thousands of cores are swindled through frauds, as I have already mentioned has lent some degree of acceptance of their hooliganism and outrageous acts. The worst fallout of this inability to bring to books, these economic offenders, is the growing resistance of the general and otherwise well meaning borrowers to repay the loans quoting these NPAs and Frauds. When the bank's officials go for recovery, even a man in the remotest area taunts - why you have not recovered from Vijay Mallya. And the latest addition to this is Nirav Modi. And the banker's conscience is really hurt and his morale is lowered though he may pretend otherwise. The urgent need therefore is to take punitive action on these large corporate willful defaulters and fraudsters which should be strong and demonstrative. Then only the last man in the last mile too behave. Otherwise, if it turns into a kind of movement by some ill-advised elements in the society not to pay the loans till the government recovers from the big defaulters, it will be disastrous for the banking system. Though this idea may be farfetched, but it has a distant possibility.

K N Krishnan.
Vice president, SEWA, Bangalore.