Sunday, September 8, 2013

The Financial Wizard - Episode No.3

My next visit to Hokkalike was in the year 1959. I had by then completed my primary education. I had also completed my V Standard examination by appearing as a private student in the Middle School at Narve. It was decided that I should complete my VI to VIII Standard at the Government Middle School at Basavani, a small town 4 kms away from Hokkalike.
Lots of changes had taken place at my brother-in-law’s place by then. As imagined by me, my brother-in-law had shifted to the new house that I had seen adjacent to the old house. The family partition had taken place a few years back. Two of the younger brothers had shifted to new houses since constructed, while the last two brothers remained at the old house. The aged mother also stayed at the old house.
Unlike earlier, there was no problem for me with regard to my morning breakfast. With my sister as the sole kitchen-in-charge, I could relish my full breakfast at my convenience. With a good number of milk animals at home, the supply of milk, curds and ghee was in plenty. During my stay of three years, my beloved sister ensured that I got the best food always.
My brother-in-law had already expanded the new house that I had seen during my previous visit. He had built an annex to the house that had vast spaces for warehousing of paddy and rice in addition to a large cowshed and a shed for the bullocks. The main house had seen a number of extensions. It took almost 10 minutes during the night to close down all the doors. I used to help my sister in closing the various doors by carrying the kerosene lamp and accompanying her in the dark night! I even used to dream that one of the doors had been missed out and a thief had sneaked in! I knew, unlike the empty coffers in our house, my brother-in-law used to keep much cash at home!
The family partition had been made in a meticulous manner. The bullock cart owned by the family had gone to the share of the third brother called Ganeshaiah along with the bullocks and the driver called Jaggu Shetty. My brother-in-law had purchased a new bullock cart and bullocks and had engaged a new driver called Nakra Nayka. Nakra belonged to the backward Marathi community from South Kanara who spoke a mixture of Marathi and Kannada. There were also a good number of other servants most of whom belonged to the Marathi community.
There was a big shed with partitions near the house where the families of servants were located. Every day in the morning about ten male and female servants would report for duty at the house. They would be assigned manual work depending on the season. The work in the paddy fields used to be only during the ploughing, planting and harvesting season. But there would always be some work related to arecanut gardens. All the servants would be given Yele-Adike (arecanut and pan leaves) along with tobacco and lime. After completing the day’s work, the servants would assemble again to collect their daily quota of one seer of rice each. My brother-in-law had also implemented a system of issuing tokens (called vundige in Kannada). These tokens were made with cigarette pack material carrying a rubber stamp of my brother-in-law. Each token represented one day of labour. The cash payment at the month end would be on the basis of tokens held by each servant. Female servants would be paid lesser than the males. Their nature of work also used to be different.
My brother-in-law maintained individual accounts for each family. Many of the servants would maintain cash balances in their accounts, while a few of them would overdraw their accounts. All the families would go back to South Kanara once in a year to be at their native place and visit their elders. At that time their accounts would be settled in full.
After the family partition, the resources of my brother-in-law had comedown naturally.  Two of his younger brothers were also into limited money-lending. But a majority of his earlier borrowers had not deserted him in spite of him telling them that he did not have adequate funds to finance them as earlier. As a grown up boy, compared to my previous visit, I could make some assessment of my brother-in-law’s financial affairs.
As far as financing of paddy farmers was concerned, I could see that the business had grown tremendously. The collection of paddy from the farmers during the harvesting season was a very big affair. Nakra and his bullock cart would be totally busy. Massive volumes of paddy would be stored in the panathas. Similarly the lifting of paddy by traders from mostly Narasimharajapura (N R Pura) was another big affair. They would arrive with their big Lories and Hamalies (porters). The ease with which these Hamalies lifted the heavy bags of paddy for loading on the Lories was astonishing to us. Even the family servants used to be surprised by their physical prowess.
There was a category of borrowers, who would go on pestering my brother-in-law despite knowing his reluctance to finance them. These were the people who had defaulted previously. Naturally he wanted to get rid of them. But it was not an easy job. My brother-in-law used to give a long lecture to them in the matter of handling their personal finances. They would hear everything silently; but would not leave the place! Many a time they would not even allow my brother-in-law to take his food. My sister used to totally get upset. But she was helpless.
There was one special category of borrowers who were very prompt in their dealings. These were the clients who themselves were money lenders. They had limited resources at their command; but had huge borrowing clients. As my brother-in-law used to charge low rates of interest, they would relend the money to their clients at a higher rate. You could even call it a case of arbitrage. Here my brother-in-law used to play the role of a refinancing banker (RBI or NABARD)!
There was another category of borrowers – the invisible category. These were close relatives of my brother-in-law! I came to know that the recovery of loans from this category was the toughest. These were a kind of forced loans on my brother-in-law. They were given on account of certain family/moral/emotional conditions prevailing at the time. It appears my brother-in-law had maintained a separate book for such loans and had made adequate provisions in his annual accounting system! (I came to know later that he had a system of preparing annual balance sheet and P&L account). But what hurt him was the case of certain willful defaulters. These relatives were capable of paying back. But they simply ignored their liabilities as they thought my brother-in-law had lots of money!
Most of my brother-in-law’s relatives would visit his house during the annual ceremony of his father. They would arrive with their full families two days in advance. They would leave only one day after the ceremony. Some of the relatives were quite rich. I was curious to find out the names of those relatives who were in the defaulter list of my brother-in-law. My sister told me that as a matter of routine her husband would deliver a small speech before the families started leaving. If I kept a close watch, I could make out the names of the defaulters!
The annual ceremony was held that year as usual. There was a huge gathering of relatives at home. One day after the ceremony, the relatives were expected to leave after the lunch. I was keeping a close watch. As the afternoon coffee was being delivered to all, my brother-in-law started his speech. Suddenly there was a total silence. Without addressing anybody specifically, he told the gathering that it was high time for some of them to pay back the loans they had taken from him. He told them he knew they had the money and could at least pay back in installments. As he was continuing the speech, I observed a few of the relatives finishing their coffee in a hurry. They said they had some urgent work at home and left the place in a jiffy! So that was how I got the defaulter list of my brother-in-law!
------To be Continued-----
A V Krishnamurthy
8th September 2013

1 comment:

Narain said...

This episode has graphic details about the functioning of a dharmic banker, the category to which he belongs is totally extinct. The qualities of the banker far exceed the contours that I had in mind about him.
Such people were the salt of our earth.