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Lending is an art. Perhaps modern bankers with their thrust on consumer and retail lending have lost touch with this. When did you hear a banker do a big ticket financing last? I have not heard of one in the past few years. Of course, the robust credit expansion at the quantum level successfully hides this fact. But if lending were an art, recovery is an art, science and much more. Yes I am referring to some bankers who are rumoured to use coercive methods to effectuate recoveries, besides the usual legal processes.

Yet there are people, like my cousin Jai, who are beyond the any recovery process. Jai was a brilliant young man with a professional qualification. He started a manufacturing venture with a noble intention in the early 90’s. But those were different times when Jai was straightforward, honest and simple. Somewhere, something went amiss. Instead of manufacturing, hoodwinking bankers became his prime objective. Bankers became his gullible victims. It was thus a pleasant surprise for me to know that Jai had settled with his bankers amicably last month. I was relieved for a friend of mine who as a banker had sanctioned loan to Jai had to subsequently face enquiries. Thank you lord for small mercies.

“Let us go for a drive in my new Mercedes,” Jai said as I met him the other day. “Tell me Jai how did you manage this new Mercedes – and the settlement. Weren’t the bankers after you?” I asked in complete bewilderment. “Anything is possible,” was his cryptic reply. I thought he said “in India” beneath his breath. “I recall that you had given some personal guarantees to the bank apart from securing the loan with fixed assets of your factory. Frankly I thought you would be ruined while settling the bank. I am really amazed that you escaped... err.. I mean settled without any loss to your assets.” Jai chose not to notice the slip and instead honked repeatedly to remind me that all his prized possessions were intact. He opened up after a few seconds of deep contemplation, “Narada, perseverance is crucial in such matters. My experience with bankers is that they lend to people who overstate their profits and settle with those who overstate their loss. The trick is to convince them either way. In my case I had to demonstrate on paper that there was hardly anything to recover. Further as my bank was contemplating an IPO it wanted to reduce its NPAs. That helped too.” “I don’t believe this. Obviously, your audited accounts would throw up your true position. Wouldn’t it?” I asked displaying my innocence once again. Jai laughed, a laugh that conveyed quite a lot. “Narada bankers collect balance sheet for filing only – not reading. Which banker has the patience and time to go through the same? Also Narada, it was really funny to see bankers coming to meet me and pleading with me for settlement. I recall years back these very officers made me wait outside their cabins when I wanted credit desperately. By refusing to help me in times of need bankers are responsible in a way for my state of affairs. When my turn came I was not found wanting.” The revenge of the borrower I thought! I could comprehend Jai’s game plan by now. By tiring out the bankers and portraying a dim future, aided and abetted by a pliable system, Jai forced the issue on his bankers. “What were the final figures?” I enquired pryingly. “25% for the principle and complete waiver of outstanding interest,” he said without batting an eyelid. I was shocked. “But your factory assets and crucially your personal properties would have fetched a higher sum for the bankers? Were your bankers oblivious to the increase in their value?” I probed further. Jai simply winked at me and said “trade secret.” Obviously Jai didn’t want to reveal his sleazy side. “What do you propose to do with the factory land?” I asked. “Simple. Sell it,” was the prompt reply. When asked for the rate at which he proposed to sell, Jai whispered something into my ears. I cannot put them in “black or white.” Nevertheless I was thankful to Jai for a wonderful ride in his new Mercedes. I am not so sure about his bankers.

Last modified on Sunday, 07 July 2013 07:36

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