Monday, October 20, 2008

As banks go ‘bank’rupt, here’s something you can bank on!

(I have received many enquiries about a blog on the collapse of banks since I work closely with the investment banking community. But I felt that enough has been written on the topic that I chose to write on banks in general)

A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain - Mark Twain

The impression of a banker, for me, was that of a risk-averse, pin-stripe suited guy. Well, if I were to consider the way banks are falling like nine pins on Wall Street (they are planning to rename it as Fall Street!), it is time I created exactly the opposite impression. I feel the phrase bankrupt has become ironic; shouldn’t bank mean ‘bank'rupt now? By the way, the safest bank these days seems to be the Piggy Bank. But I am not that worried about all these banks closing down. If the banks are closed, I just use the ATM.

Banks are intermediaries who take one person’s money (in the form of deposits) and lend to another (in the form of loans). Banks charge you high interest to borrow your neighbour’s money which you could have borrowed directly at much lesser interest rates, if you had not thrown stones at his dog or shouted at his children when they stole fruits from your garden. As per traditional theory there are three rules to become a successful banker - First, don't lend money to those who don't have any; second, don't lend money to those who need it; and third, don't lend your own money.

Lending is the main activity of banks, because that is how they make money. You have to prove to the bank to ‘its satisfaction’ that you would be able to repay the loan. Practically what it means is that you will have to prove that you actually don’t need the money. I never knew why banks called the loan I took a ‘personal loan’ till I missed couple of my payments. And boy, did they get personal! But you may want to be careful with those calendars banks give you to help you keep track of your payments; some have more than 12 months on them! A word of caution for borrowers - you may be turned down a loan if you are good friends with many collection agencies.

When I learned that I could borrow against assets, I approached my bank to lend me money to buy a car against my intellectual property and knowledge assets. And that is when I learned their true worth! Of course, my job also reminds me of it often. After influencing higher ups of my bank, they finally offered a loan of $10,000 to buy a car that was worth $20,000, after ensuring that I have income to repay a $100,000 loan, against the guarantee of two people who have assets worth $250,000 each. That is when I realized that there is more truth than humour in the joke “if I owed the bank $10,000, it is my problem; but if I owed the bank $1 million, then it is the bank's problem”.

Banks, like trees, have branches but no leaves grow on them. Before the internet revolution, a bank’s worth was directly proportional to the number of branches; but today it is proportional to the number of online frauds. As a kid whenever I asked for an expensive toy I was always told that money doesn’t grow on trees. But if money doesn't grow on trees then why do banks have branches?

A bank teller is the person who tells (tales) why he can’t do things that you expect him to do. But I found that most of the time tellers don’t tell much. Last time I tried to encash my cheque, the teller told me that I had forgotten to dot the "i" in Salil. I asked him, "Can't you do that for me?" The teller replied, "Sorry sir. It must be in the same handwriting." Another time the teller asked me to identify myself. I immediately looked into the mirror and confirmed that it was me who was at the bank. And the teller was satisfied! Also if bankers could count, why do they always have ten windows and two tellers?

Swiss banks, known for their privacy and safety, are where people hoard their ‘black’ money (see, I told you there is racism among the rich!). Woody Allen once remarked “If only God would give me some clear sign! Like making a large deposit in my name in a Swiss bank”. I wonder where the bankers store all the money, with the way it is multiplying exponentially across the world. That makes me want to start a Swiss bank. My readers are all welcome to invest their hard(ly)-earned money in it.

Luther George Simjian once asked for money from his friend through a window. This gave him the idea of creating a hole-in-the-wall machine that would allow customers to make financial transactions, which eventually led to the invention of ATM machine. But whenever I have tried to check my account balance at the ATM, instead of printing out the receipt, the machine laughs out loud, gives a message ‘Not worth wasting paper’ and ejects the card.

Call centers are inventions of banks to check if you really have a problem. If you can call 13 times and wait for 45 minutes each, listening to the bank’s vision and mission statements, before you get through to a human, who of course is not in a position to help you, then it could be that you have a problem. Else, you are person with a complaining nature. I am not saying that the customer service in my bank is bad, but when I went in the other day and asked the clerk to check my balance ... she leaned over and pushed me.

Science has been working for long to develop neutron bomb that destroys people and leaves buildings intact. However, banks beat them to it by inventing mortgages. There were 5-year rest loans, interest-only loans, 30-year loans, you name it. The way things were going, I was looking for the day when banks would start giving 100 year loans to buy a house.

Meanwhile my online bank seems to have gone offline… with my account!


Usha Pisharody said...

This goes way beyond the tongue-in-cheek assessment, and for me, is an eye-opener of sorts :) It's the off hand, light-hearted [yet with a thread of cold steel!] manner of your articulation that I am drawn in. I smiled, and enjoyed the laid back humour, and learnt with it! Indeed, each new day brings more anxiety as to who/what to "bank" upon. Thank God for the Piggy Bank!

And this perhaps, is the punch, in the face... just a couple of lines that encapsulate the crisis:

Science has been working for long to develop neutron bomb that destroys people and leaves buildings intact. However, banks beat them to it by inventing mortgages.

I'm educated by this, and entertained too. And little can beat that combination! Fine stuff, Salil!

Anonymous said...

Lol @ the 3 rules to become a successful banker.
BTW I have reason to believe money does grow on trees (of course could be bush, plant or vine) somewhere in Nigeria! :P Check this out.

Renu said...

Lol!!!, I started reading with so much of seriousness with the hope of getting some advice(as if I need it) and ended up laughing and i am happy, becuase now/a much advice is floating evrywhere, but laughing is rare:)

Govind said...

Entering a bank is a nightmarish experience.The advent of ATM is a big relief. You can sneek in when no one is around and get out fast with the money (if you have any). Good one Salil, reminded me of Stephen Leacock's
"idontrememberthetitle" I read when I was a kid.

sansmerci said...

had a good lauf .. as always :)

Chriz said...

it is autumn season in banks.. thats y no leaves grow on their branches..

Mampi said...

You are funny, funnier, funniest. Wanted to say I like this the best or that, but the whole post was like a bombardment of laughter-sentences attacking one after the other.
Looking forward to more...

ramesh sanijeeth sadasivam said...

As humorous as ever. :)

Some of my mansion mates showed their banks that they no need loan and went back to their native place for a honey moon which may end in the next century. But the loyal bankers keep remembering their friendship and come here everyday with lots of love for them.

Is this how Wall street became Fall street? :)

Nishanth said...

Three rules are pretty good..Laughed my ass off over those... :D...

very amusing post...:D.Wait till i crack the same to my uncle who is a banker... :P

Nikhil Narayanan said...

Adding on.
When you need a loan, they show more love that your parents.But squeeze the last drop of blood when the repayment time comes.


Swarna said...

I'll share that happily with my banker-cousin!
1. On our son's birthday last Saturday - he was entering two digits - we broke his safe (pun intended) piggy bank and gifted him an all-frills 'savings' account - I hope I can expect a 'thank you' ten years from now.
2. Personal banking is probably another of Mrs Malaprop's lesser-known slips (no pun intended). Bankers are formal and banking is impersonal. No wonder the average customer feels more friendly towards drop-boxes and ATM's, or is it the other way?

Anonymous said...

man you can take any serious topic and make a joke of it. admire it.

"when I went in the other day and asked the clerk to check my balance ... she leaned over and pushed me"

I thot she leaned over and ....

Rakesh Vanamali said...

Lol, I laughed my guts out reading this post! Very well written!!!

I've got a couple of banker friends to whon this will be air-dashed to! ;)



Gauri said...

Awesome stuff Salil !
With the loads of jokes doing the rounds about banks and bankers i had to share this one with you -

Whats the difference between an investment banker and all and sundry ?
A Tie


Ganges said...

hilarious :))) the papers have been saying pretty much the same thing, but you put it so well!

Gazal said...

i swear i commented here...

what happened to that!!!

its difficult to write something intelligent again...

so can i say i have found another Twain fan here...??

Anonymous said...

>>Banks charge you high interest to borrow your neighbour’s money which you could have borrowed directly at much lesser interest rates, if you had not thrown stones at his dog or shouted at his children when they stole fruits from your garden.<<

>>Another time the teller asked me to identify myself. I immediately looked into the mirror and confirmed that it was me who was at the bank. And the teller was satisfied! <<

>>when I went in the other day and asked the clerk to check my balance ... she leaned over and pushed me.<<

You are too good!

Salil said...

Thank you for your generous words.
It did not take much effort to write on banks insolently when they do these ‘little’ things that bring recession to the global economy. And talking about the crisis, everything is funny as long as it is happening to somebody else.

Been there, read that.
Off to Nigeria tomorrow. Will mail you from there. Let me know how many saplings of that tree you need.

Thanks for being here.
PG Wodehouse once remarked ‘I always advise people never to give advice.’ But I don’t agree with him; I give advice generously.

Yes, ATMs and online banking has taken a lot of pain of banking. Earlier, bankers would make it look like they are doing a favour to let you withdraw your own money!
Have heard a lot about Stephen Leacock, though not read him. Will try to look for his works.

Thanks for the appreciation .. as always :)

Oh yeah, that is true. But if you do not sow in the spring, you will not reap in the autumn.

Glad that you had a good laugh.
Guess what, that was the good, better, best comment so far!

Thanks buddy.
Your mansion mates have good financial management skills. If you can relocate often, it is a good idea to borrow as much as you can.
Talking about Wall Street, George Bush said that ‘Wall Street got drunk and now it's got a hangover’ :-)

Thank you for dropping by.
Please feel free to share this with your uncle, but don’t give my contact details for health reasons.

Salil said...

Nice to see you here.
Well, that is the case with modern bankers.
But a lot of Indian bankers make a lot of fuss about lending as if lending is not their core activity and that they are lending their ancestral wealth!

I hope I will not start receiving hate mails from banker-cousins :-)
Aren’t you too optimistic?! You will receive the ‘thank you’ you are expecting, provided the government ‘saves’ the savings account (now you know why it is called a savings account!)

Thanks buddy.
But I am married and am employed. I hope that explains how I can find humour in serious topics.
Oh, you thought she leaned over to ask for my account number? For the records, she did not, though I wished she did :-)

Pleased to hear that you had a good laugh.
Please do share this post freely with your banker friends. I guess I am going to be blacklisted in all bankers’ list :-(

Nice to have you here.
Talking about ties, Oscar Wilde once said, ‘With an evening coat and a white tie, anybody, even a stockbroker, can gain a reputation for being civilized’

Thank you.
How dare the papers say what I have said without my permission?! :-)
But I thought the papers have been analyzing the crisis, whereas I have tried to pretty much keep away from the topic.

‘Another’ Twain fan here?! Who is the other Twain fan on ‘my’ blog?
Yeah, I recollect all those ‘intelligent’ comments you left on my previous posts :-P

Thank you.
Hehe, lol, rofl – very succinctly appreciated :-)

suresh said...

just cool stuff! truly banked on it..

BTW keep me posted whn u forming tht swiss bank... wish to buy some stake with my hard(ly) earned money...

Anonymous said...

i loved the i in the Salil conversation. Looking at the honesty of the bank teller, am sure he deserves a Nobel prize.

Keshi said...

hahahaha good one!

When banks r drying up, I just go to the river bank :)


Alameen said...

4 times...
Yes!! really four times i laughed out loud.. :)

Nice articulating. you wrote it really well..

Keep writing

Nandalal said...

"If the banks are closed, I just use the ATM."
Lol. I literally laughed at that statement.
I remember one mail i came across about a bank... A couple gets lost in an 'unchartered' island after a crash and the wife gets hugged by her hubby after she reveals the fact that she hasn't payed their credit card bill for the month. It turns out that she got embraced by the 'knowledge' that hubby had about bank. The bank will 'invest' on finding the debtor whatever it costs for the bank.
The 'Feeling' can't be changed :).

Salil said...

Thank you for coming this way.
Ok, you want to be partner-in-crime, you got it. But you need to pay a hefty premium for your stake!

Do they give Nobel Prize for honesty these days? I should be getting it every year then :-)

Thank you.
I am sure that is what the Keralites do. They also throw stones into the river sitting beside the bank :-)

Thanks for dropping in.
There were 40 jokes and you laughed only four times?! Was it the jokes or was it you?
Just kidding. I know you laugh once every 10 jokes :-)

Thank you for passing by.
Yeah, the bank will invest $5,000 to recover the $2,500 balance you have on your credit card :-)

Devika Jyothi said...

Hi Salil!

this definitely was not you at your best...

autumn and poetry are directly proportional..i learned in these days..

but autumn and humour seems inversely proportional ...rt??

how's autumn in the US this year...winds even reached my land...;-))

and remember autumn is a multifaceted poetic word...not meant for those who see the lighter side of life...

its almost connected with death...
now don't scratch your head all round..ask MIP he is a magician who knows all..bribe him -- he will tell the whole story..


Devika Jyothi said...

btw, thank you for your kind comments at my blogs...

i will be 'Off' but 'On' ;-))


Anonymous said...

Sorry, I am late to the party man. Was caught up with some work.
One funny blog there, rofl stuff. Loved the story of ATM invention.
There are so many jokes on banks and bankers these days that it is humiliating to be a banker now.

Salil said...

Will try to live upto your higher standards next time :-)
I never realised autumn could have such an impact on me!

Thank you.
Being humiliated to being a banker these days reminds me of the Little Johny joke:
Little Johnny was in his reception school class when the teacher asked the children what their fathers did for a living. All the typical answers came in - fireman, policeman, salesman, doctor... Johnny was being uncharacteristically quiet and so the teacher asked him about his father.
"My father's an exotic dancer in a gay club and takes off all his clothes in front of other men. Sometimes, if the offer's really good, he'll go out with a man."
The teacher was shocked and hurriedly set the other children to work on some colouring and then took Little Johnny aside to ask him, "Is that really true about your father?"
"No," said Johnny, "my father is an investment banker, but I was just too embarrassed to say"

Anonymous said...

Wow.. Nice blog.. It is difficult to find out..

I loved your post.. It was really cool.. Enjoyed reading it..

Your humor is too good..

Unknown said...

In the US they call a banker a 3-6-3 guy. That is he borrows money at 3%, lends it at 6 and leaves office for golfing at 3. No wonder Indian bankers work so late - because they are 9-12-9 :-)

Salil said...

Thank you for your kind comments.
But what did you mean by it is difficult to find out? I hope it wasn’t humour or niceness!

Glad to see you here.
Had not heard about 3-6-3 till now; that’s a new one. I guess for Indian bankers, it is only 9-12; they don’t have a life afterwards :-)

Prasanth said...

Good read, but since you work with Inv banking community, how does it feel to know that u are also a part of reason for global fiancial crunch? And do you expect we Indians to give a red carpet welcome to you when u come to India.
And one comment regarding your statement, when Banks do not have money, you will go to ATM.

The last stage of global crisis is that, though you have your money with Bank, you will not get money from ATMs, neither thro Credit card cash advance. So where will people go, what will you sell to earn? There is no option left other than turning to agriculture.Only to find that your produce is looted when you were sleeping. read in some source that this has already happened in some parts of Iceland. So better come back and start paddy cultivation in Palakkad, and govt is giving interest waivers for it.

Elizabeth J. Neal said...
This comment has been removed by the author.
Elizabeth J. Neal said...

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