Before the bank decides whether or not it wants to give you a loan, it will assess your creditworthiness. One of the factors that will decide your fate is your CIBIL score. If your CIBIL score is less than 750 (out of 900), it will reflect the fact that your credit record is not up to the mark. A poor CIBIL score may lead to an outright rejection of your loan application.
– Financial Express, October 10, 2016

On Valentine’s Day, one of India’s biggest banks disclosed a $1.77 billion loan fraud allegedly by one of the country’s richest men (Nirav Modi), who deals in pearls and diamonds. Shares of the lender, Punjab National Bank (PNB), plunged on the news, dragging down other lenders when it said the scam may extend to multiple banks.
-The Times of India, Feb 19, 2018

The Big Bank Theory – Part 2
My Bank Manager Is The Loan Ranger!

This is what happens when you go on a blind date with a crazy person. He or she smiles nicely, asks a lot of personal questions, gets to know a few intimate details… and shares this information with other suitors or potential boyfriends/girlfriends online. So when you try to date prospective lovers, they take one look at their computers and reject you instantly. So you lied about your income… Or you were drunk and bounced off the sidewalk once or twice… big deal! Are these valid reasons for rejecting your love proposal forthwith?

And this is what happens when you apply for a loan at a bank. The loan officer or manager smiles nicely, asks a lot of personal questions, gets to know a few intimate financial details… and shares this information with other banks or potential loan-givers online. So when you try to apply for loans at other financial institutions, they take one look at their computers and reject you instantly. So you lied about your income… Or you were broke and bounced checks once or twice… big deal! Are these valid reasons for rejecting your loan application forthwith?

That’s why you really cannot bank on banks these days. They check your credit history, employment story, and if income tax payments are satisfactory. And since banks are mutually internetted and indebted, they get to know about your non-payments, non-filings and other nonsenses. It might be easier to borrow from a miserable miser than to get a loan from a bureaucratic bank.

So don’t be surprised if you overhear the following loan-related conversations at a bank near you…

‘Did you fill out the ten-page loan application booklet? And the supplementary personal data forms? Already? Let’s see now… Oh, you’re a salesman. Which means your income will not be directly proportional to your exponentially increasing work load. And will depend on variables like eccentric customers and erratic sales. Not a good qualification for a loan. And speaking of qualification, what is your educational background? Are you serious? English Literature! That’s it then, no loan for you. What’s that? Your English education improved your communication skills? I have two names for you, young man – Edgar Allan Poe and Oscar Wilde. You think your communication skills are better than theirs? They wrote such pompous prose but look how they ended up – pitiably penniless. At best, your literary tendencies could only lead you toward a licentious lifestyle, like those debauched poets, Byron and Shelley. As I always say, too much English is bad for dharma and karma.
Application rejected. Reason for rejection – Having only English Literature, and no other marketable qualifications.’

‘Next aspiring applicant, please enter…
You are a farmer then. So, if you err on a farm, is that known as a ‘farm-err’? Like cooking the goose that lays the golden eggs, or putting the apple cart before the horse… No sense of humour, eh? Okay then, let’s see if you are loan worthy. Oh, so disappointing, you don’t actually own the land, you just lease it. Then sorry, we have to reject your loan application. Why? Because you are under the weather always. If there are extended dog day afternoons, if it rains cats and dogs, if the weather is too foul for fowls, or if there are no clouds with silver linings… then your crops flop and grains go down the drain. For you no harvest, for us no loan payment. But if you bring a few fair weather friends who will sign a guarantee, then we could consider a loan. No? Then try inventing a revolutionary farm implement like Jethro Tull… no, not the rock band, the eighteenth century agriculturist. Not inclined toward inventing? Then please visit us when you buy your own farm.’

‘Next helplessly hoping loan seeker, please…
Congratulations! So you’ve been promoted from a spine-crushing clerical chair to an ergonomic assistant-manager’s chair. And now you want to upgrade from a motorbike to a four wheeler? How nice! Let’s see your salary statements… Hmm, and when is your manager retiring? Why? Because your current pay raise might impress your parents, but will not impress your in-laws. And definitely not this bank. But alternately, do you have any collateral to pledge, like your own house? No… then does your wife wear a lot of jewelry? No… then I sincerely suggest you get a fancier motorcycle for now. Ah, you think assistant managers should not be riding motorbikes. Please allow me to point out that great men have done great things on motorcycles – please go and watch the movie Tomorrow Never Dies. The motorcycle scene will leave you both shaken and stirred. You think you are better than Bond? James Bond? Of course not. Please get back to us when you become manager…’

But as we know, James Bond is no manager. He is a working class hero who has to struggle against an underhanded crime agency known as Spectre. In real life, you, the hero of your life, have to struggle against an underhanded credit agency known as CIBIL. Using your own Pan and Adhaar numbers against you, this sneaky monitoring agency stealthily tracks your credit history and flashes your pitiable financial plight to potential lenders. Let’s say you are late with a payment just once, then too bad, you are now on CIBIL’s Most Unwanted list. And don’t think you could sneak off to a bank on top of Mount Everest, because that bank would still say, ‘sorry, your CIBIL record shows you haven’t paid Rs. 2,000 to the Bank of Bureaucracy. So we cannot approve your loan for mountain climbing gear. Good luck negotiating the rockface without ropes.”

Welcome to our banking world… where sweat-collared low-classers get tied up with red tape and get thrown out along with rejected loan applications. But if you are a rich, unscrupulous businessperson, we welcome you to experience the Big Bank Theory in practice. Just walk in and get impossibly large loans. And if you dodge the authorities long enough, your super loans will be written off with official blessings. And then you will be free to go globe trotting, while poor farmers sit in jail rotting. And our politicians and bureaucrats? They are still plotting.