My Days West - Episode-9

My visit to Ujjain was indeed one of the most exciting moments of my life. Right from the days of childhood, Ujjain for us was associated with the great Vikramaditya, also called Vikrama or Thrivikrama. We had read a lot about the heroics of Vikrama including the stories of Vikram and Vethal (Vampire). The picture of Vikram carrying Vethal on his shoulders remains permanently etched in our memory. Later, we also read the works of Kalidasa, wherein he has given a graphic description of the river Kshipra surrounding the legendary city. We had also read about the throne of Vikramaditya and the stories associated with it. I feel it will be appropriate for me to give a brief account of ‘the legend of Vikramaditya.’

The legendary Vikramaditya is a popular figure in both Sanskrit and regional languages in India. His name is conveniently associated with any event or monument whose historical details are unknown, though a whole cycle of tales have grown around him, so much so that Sir Richard Burton, who first translated the tales to English called him, "the King Arthur of the East". The two most famous ones in Sanskrit are Vetala Panchvimshati or Baital Pachisi  and Simhasana-Dwatrimshika also known as Sinhasan Batteesee. These two are found in varying versions in Sanskrit and also in the regional languages.

The tales of the vampire (Vetala) tell twenty-five stories in which the king tries to capture and hold on to a vampire that tells a puzzling tale and ends it with a question for the king. In fact, earlier the king was approached by a Sadhu to bring the vampire to him but without uttering a word, otherwise the vampire would fly back to its place. The king can be quiet only if he does not know the answer, else his head would burst open. Unfortunately, the king discovers that he knows the answer to every question; therefore the cycle of catching the vampire and letting it escape continues for twenty-four times till the last question puzzles Vikramaditya. A version of these tales can be found embedded in the Katha-Saritsagara.

The tales of the throne are linked to the throne of Vikramaditya that is lost and recovered by king Bhoja, the Paramara king of Dhar, after many centuries. The latter king is himself famous and this set of tales is about his attempts to sit on the throne. This throne is adorned by 32 female statues who, being able to speak, challenge him to ascend the throne only if he is as magnanimous as Vikramaditya is depicted in the tale she is about to narrate. This leads to 32 attempts (and 32 tales) of Vikramaditya and in each case Bhoja acknowledges his inferiority. Finally, the statues let him ascend the throne when they are pleased with his humility.

I remember to have read one version as per which, the female statues (birds - as per another version) ultimately carry the throne away to the heaven through the sky as they find that Bhoja was not fit to sit on the throne. But what I found more interesting was the way the throne was discovered from underground, because people found one boy sitting on an earthen platform and delivering fantastic judgments. The throne was found below the platform. The entire story was so interesting that we felt the same enjoyment every time we read it or narrated it to the youngsters. It was simply a storyteller’s delight. So much so, believe me when I say, that I am holding back my urge to write down the entire story here!

We reached the legendary city late in the night and stayed in a lodge which was quite good and quite in contrast to the one in Sagar. I had already started getting the elated feeling of my presence in the legendary city. But our official duty was to be attended on priority. We landed at the branch well before the opening hours to enable us to check the cash and other securities on a ‘surprise’ basis. We went inside the Manager’s cabin and sat there waiting for his arrival. But finding him not arriving even at the opening hours, we came out and asked one of the staff sitting in the hall about his whereabouts. To our surprise the gentleman told us that he himself was the Manager! We told him that we had arrived from Bombay to inspect his branch. When he heard of Bombay, he became nervous and thought that we had come for some special investigation! In the normal course the inspectors used to arrive from Ahmedabad and that was the reason for his nervousness. He started behaving in a fishy manner. The branch had two Accountants and there was no reason for the Manager to sit in the hall. We also could not make out why he had ignored two persons sitting in the cabin, while he was sitting outside. It took some time for us to convince him that ours was a normal branch inspection.

We later found out that the Manager had come from Bombay only, with his first assignment as Manager. He was very particular about not getting involved in any ‘problems’ and keeping himself in a secure position at any cost. His policy was ‘safety first’! The innovative ways he adopted for the purpose were only to be seen to be believed! The first in the list was revealed to us on the first day (night) itself by none other than one of his Accountants. In the evening when we were leaving the branch for our lodge, one of the Accountants took our room number and name of the lodge. He was a local (Maharashtrian) probationary officer (on promotion) by name Nendurkar. The other senior officer was Prasad from AP.

Nendurkar knocked at our room door at 9 pm. We asked him to sit down. He profusely thanked us for taking up the branch inspection. He told us that he had been waiting for us since more than three months! We were at our wit’s end to hear him. But he explained the matter to us without maintaining the suspense for long. He had been sanctioned a housing loan to construct a house in Ujjain. But the Manager was sitting on the sanction without allowing him to draw the amount. The reason was simple – it was the first housing loan for the branch and more importantly for the Manager as well. He was not sure about the documentation aspect. Hence he simply held on to the sanction. But he had told Nendurkar not to worry. He was to wait only till the arrival of the inspectors at the branch. Thereafter, he was supposed to complete the documentation in consultation with the inspectors! The Manager had made it clear that the onus of obtaining correct and complete documentation would be on the inspectors and the officer himself! He would only sign the papers after confirmation by the inspectors! All along we, the inspecting officers, were under the impression that our role was secondary as far as any branch work was concerned. But here was a Manager, who had the ingenuity to fix the primary responsibility on the very people who were doing an internal audit to fix his responsibility!

Nendurkar left our room only after he was assured by Selvaraj that he would guide him in the matter of completion of loan documentation and help him build his house. As a matter of curiosity we asked him the reasons for the Manager to sit in the hall leaving his cabin empty. We were told that it was again a ‘safety measure’. The branch used to be visited by a number of people asking for loans. They would wait outside the cabin for his arrival. Most of them would leave thinking that he was on leave. A few of them would ask the man sitting in the hall (none other than the Manager himself!) about the whereabouts of the Manager. They would get some vague reply! Only the regular customers would know him as the Manager.

The Manager had followed his ‘safety first’ principle everywhere as we could find out during the course of our inspection. The branch is expected to take ‘acknowledgement of debt’ (AOD) from the borrowers before a loan completes three years. Otherwise, the document gets time-barred under the limitation act. The bank loses the legal recourse once the loan document gets time-barred. The Manager is expected to take the AOD immediately after two years, as a matter of abundant precaution. The Manager had used his ingenuity here also. He would take the blank AOD along with the loan papers! Not only that, he would take not one but three AODs to keep the loan running for almost 12 years. We were told that he was ensuring the safety of the future Managers also! He had kept all the loan papers blank. He had asked the Accountant to fill up the same in consultation with the inspectors to fix the joint responsibility!

While the above tactics were ‘understandable’ on account of the risk associated in handling advances, I expected deposits to be a ‘risk-free’ segment for the Manager to handle. But I was proved wrong. The Manager’s risk management capacity was all-pervasive! I found to my surprise that the branch was not paying any interest on the recurring deposits (cumulative deposits). The branch was expected to add interest on yearly basis in the accounts and pay the maturity amount on due date. But I found only one account among the deposits to have received the interest credit. It was the account of Prasad, the senior officer! Prasad had taken care to see that his account got the proper credit and his ‘own interest’ was duly protected!

The story was the same with the Nitya Nidhi deposits (NND accounts-Pigmy accounts). None of these accounts, (closed mostly before the maturity period of five years), received any interest credit. The excuse given to the depositors was that the bank had to pay commission to the agent. When we asked the Manager what prevented him in paying the legitimate interest to the depositors, we were told that the inspectors invariably found mistakes in interest calculations! He had eliminated the ‘risk’ by eliminating the payment process itself!

The ‘safety net’ did not end there. There were more things in store. While scrutinising the suspense items under the sundry liabilities portfolio, I found a sub-head called margin on NND accounts. To my surprise I found some amount recovered from all the NND accounts closed, being accumulated under this head. When asked to clarify, I was told that the amount was actually ‘inspectors’ margin’.  In case of any mistakes being pointed out in payment of agents’ commission, etc, by the inspectors, this suspense amount would be used to make the necessary recoveries!

We were totally dumbfounded by the innovative ‘risk management’ strategies adopted by the manager. He made it very clear to us that he was only protecting the interest of the bank in the best spirits! I should mention here that in those days not much importance was attached to short payment of interest to the depositors and excess collection of interest from the borrowers. The follow up for such items was also not to the desired extent when pointed out during the inspection. This had encouraged the above type of innovative approach of the first time Managers!

I was very particular in adding a special paragraph in my report to ‘appreciate’ the branch innovations. I drafted the same as below:

“The branch has introduced some novel deposit schemes on its own. There is a cumulative deposit scheme, akin to our recurring deposit scheme, in which the entire amount deposited is returned to the depositor on maturity without any interest from the bank! There is also another deposit which appears similar to our NND, except that no interest is paid in this case also. In fact the branch recovers a small amount and keeps it under suspense to meet the eventualities!  Both the schemes are designed in a ‘win-win’ format for the bank! The bank has nothing to lose and can only gain under both the schemes.”

I showed the draft to Selvaraj. He shot it down saying that the inspector was expected to give only a factual report and there was no scope for creativity!

------- (To be continued) ------

A V Krishnamurthy

16th June, 2009