Friday, March 10, 2006

Loans and Bank Managers

I had this bad experience with bank managers when I came out of college.

I wanted to start a small electronic service shop to repair computers, photocopying machines, telephones, domestic appliances etc

I approached a bank for a loan so that I could buy a photocopying machine and some tools to set up my shop.My mother backed me up with the house papers.

The bank manager(nationalised bank) spent about half an hour with me before he finally said "Sorry". It was a bit disappointing.

I have an active account with another branch of the same bank at present.

My neighbour needed some money and as I could not lend him I referred him to my bank manager. The manager checked out my accounts and said it should not be a problem. I told the manager that he could have my FD's as a backup. I had to leave out of station and so I signed the necessary papers as a guarantor

The bank manager assured me that my neighbour would have his loan within a week. When I returned after a month he was still struggling for funds and the bank manager was making it virtually impossible for the guy to get the loan with new restrictions.... We finally got a loan from a private bank which was sanctioned within a couple of days.

The other day I read that some banks had been frauded of crores. These banks will not give a loan to a sincere person while they give it to guys who run off with the money. I have a feeling the managers get a share of these bad loans.

I hope the situation will improve in the future with our nationalised banks and aspiring youngsters get the required help from these banks :)


Blogger Jeevan said...

the banks giving money by seeing how much property he has, because of this many talented and poor people can achive any thing. the central government should take action on the banks.

Blogger Ponnarasi Kothandaraman said...

Tht was a very nice post..Thought provoking..Keep writing.

Blogger smiley said...

Jeevan, you are right. They give money to the people who have money rather who need money.

Ponnarasi, Hopefully the situation will change

Blogger Kaps said...

The Banks give money at lower rates to corporates as they feel that they can go after the fixed and current assets in case of a default. Since individuals may not have that many supporting assets, they turn down such requests and also charge a higher rate. But things are changing and it is no longer difficult for individuals and entrepreneurs to get loans. Actually the banks have too much cash and they don't know what to do with it.

Blogger smiley said...

Kaps, you are right, the banks have a lot of cash and as long as people don't repay properly the needy will suffer. Thanks for dropping by.


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