NaMo. DeMo. NiMo. We can’t deal with this NoMo.

It is absurd, the rapidity at which scams are unfolding in the banking sector. We barely have time to catch our breath from the NPA scam, when NiMo hits us. Followed rapidly by Rotomac. God knows what else lies hidden in the vast mess that is is our banking system. Short of capital, short of management talent and very very short on integrity.

One of the more ironic jokes that crossed my whatsapp, was the picture of a cheap pen chained to the tellers grill to prevent it from being pilfered by a customer. And talking about pens,  how does a banking system justify an exposure of Rs 3000 crores to a single pen manufacturer, when the size of the entire writing instruments (as pen manufacturers prefer to be called) market in India in 2014 was less than 250 crores.

And the diamond trade in India, as everyone knows is mostly a money laundering and havala operation..and now banking products have been devised to enable and facilitate this. You can get both pre shipment and post shipment credit for illegal money transfers now. You can hedge the currency risk with forward contracts or options, on all of which banks make a nice commission, thank you very much. And let’s not even go into letters of undertaking. For those of you who are curious on how this works, here you go:

If you are a worthy customer, you can walk into your friendly neighbourhood bank in India , and request them to guarantee a loan of a couple of billion dollars from a bank in let’s say Hong Kong. Your friendly neighbourhood banker types up something on a typewriter which you present in Hong Kong and presto you have a couple billion dollars in your bank account. One would think, that there would be some sophisticated verification processes in place in both banks to make sure that the letter of undertaking is properly authorised, executed and accounted for. But no. They are mere details.

What happens when the loan of a couple OD billion dollars falls due for repayment. No problems. You go back to you friendly neighbourhood bank in India and ask them for a fresh letter of undertaking and you are off again.. it is simple, and it works. Or at least worked till NIMO shit hit the proverbial fan.

Now w e don’t know how much of this is there. And where?

Smoke, mirrors and the stimulus..

This Tuesday our honourable Prime Minister hogged the prime time , a time usually reserved for the likes of Arnab Goswami. The nation had wanted to know many things. Such as, was the lockdown going to be extended? If so what would it’s restrictions be? When can businesses start? What about the migrant labour ( God, how I hate the word. As if they are some kind of transient slaves, who come and go according to our wishes and command)? He spent half an hour on prime time basically to inform the nation that his finance person would get back to us.

Well true to the PMs word, the Finance minister showed up on TV the next day. This time at 4 PM so as to not cut into either the Ramayan broadcasts in the morning or Arnab’s TRP ratings in the evening. From then on there has been a steady slow drip of disjointed drivel masquerading as reform/stimulus.Whatever happened to the Big Bang theory of reforms. Someone forgot to inform the FM that reforms work ideally when they shake the foundations of conventions and traditions. Incremental, marginal reforms are doomed to failure at the starting gate.

I am not sure if the FM was briefed on how many zeroes there are in 20000000000000.? Not sure if I got that right..but what is a zero, here or there. I know my phone calculator can’t  handle it. Neither can our FM, it seems. Maybe her brief, was something very brief, like make it sound like 20 lakh crore in 2020. The theme is not Covid, it is 2020.

Anyway, from Wednesday onwards we have been exposed to never ending episodes of the equivalent of watching paint dry. What our FM lacked in content, she was unable to make up with oratorial or sartorial skills unlike her master. So here we are, with no clue as to where we are and where we are headed. To be fair, it is hard to come up with a number like 20 lakh crores and expect someone to come up with the math. There are two approaches to budgeting, planning and stimulus’s..bottoms up or top down..but never to a slogan like 20 lakh crores in 2020. Imagine, if she takes 20 days to unravel her stimulus plan? Just to stick to the theme?

Smoke and mirrors cannot make watching paint dry, exciting. How is refunding income tax to people who have paid more than their share, to be considered a stimulus? And what is it going to stimulate? Also how is stuffing an absurd amount of potentially bad MSME loans onto Indian bank balance sheets a stimulant? All that will stimulate is the forced euthanasia of Indian banks. Cutting advance tax rates by 25% when most people are trying to figure if they will have any income to pay tax on. Is that a reform. Or is it a stimulus? And old schemes, freshly dusted, inflated and sold as brand new stimuli. And she still has a long way to go. She may run out of old schemes to re present. Like I said 20 lakh crores has a lot of zeroes.

I can’t wait for the next instalment of watching paint dry.