The stories of Yes Bank’s troubles, close on the heels of the crisis in DHFL, come as traumatic reminders to many of us. Add to this the cases against Nirav Modi and the involvement of the public sector bank PNB, and the issues with ICICI bank (its top management once again) – and it is hard not think of the perils of modern-day finance capitalism. This after the Wall Street crisis that one witnessed in 2008 which cut into the savings of so many people in the US, especially the senior citizens.

The stories of how ordinary people were being affected, especially in Mumbai, after the recent DHFL meltdown brought back personal memories.


My father had opted for voluntary retirement from his dead-end public sector job in the 1990s. He had hoped to invest the money in the most conservative manner possible, so he could have something left over for his daughters’ marriages and also for the rest of his retired life, even as he had hoped to try something else in his line of work independently.

He chose “mutual funds” of public sector companies like UTI etc as the financial instruments to park his money in, even as many of his plans took a backseat. But nevermind, he felt, he at least had some sort of a nest egg, all his savings in reality, in the mutual funds. These were funds managed by public sector institutions and were relatively safe, he would tell me.

For those who are more used to the fabulous salaries these days, even in government and public-sector jobs, it is important to remember that this is a scenario just on the cusp of liberalisation. Even at the end of his 40-year-long career my father’s salary was probably a fourth or fifth of what people starting out these days make. Of course, it is understood that it was 30 years ago. At any rate, it was not too much money, but for my father, that was all he had.

Then came the Harshad Mehta stock market scam and overnight the markets fell and wiped out the value of every financial holding. Included in this meltdown were securities like mutual funds, into which my father had poured his life’s savings.

My father had something like a nervous breakdown. I was never told the details – I was traveling for work when he went into a depression. When he healed somewhat, he decided to come out of his voluntary retirement and take up a job – the only he could get at short notice – in another city, where he found a rented room as a paying guest. I remember calling the phone in that house to talk to him sometimes. It was all such a humiliating experience.

My father never really recovered from that experience. For the rest of his life he became even a greater conservative, financially, depending exclusively on public-sector banks’ fixed deposit schemes and savings schemes from the Indian Post Office for some kind of monthly-income, since he did not have a pension. Unlike the pensions which the government keeps revising despite the state of the economy, the interest rates on fixed deposits plateaued and those on the post-office schemes kept dropping. My father’s post-retirement monthly income was always precarious.

The more recent financialization of the economy has made it so opaque to the ordinary person, that one has no idea how one’s money is being handled, by whom and where. The method of“chopping-up of sub-prime loans (risks),” was so arcane that several explanatory publications were produced, many of them illustrated, to explain as simply as possible the monumental fraud that was effected by what was just another form of gambling. In an exaggerated but telling sketch of this scandal in an episode of the popular animated series, South Park, one of the lead characters, Stan Marsh, deposits some money into a bank account on the goading of his father, only to see it disappear in some financial black-hole right in front of his eyes!

As an introductory piece in the Monthly Review describes this phenomenon:

“Over the last thirty years, capital has abstracted upwards, from production to finance; its sphere of operations has expanded outwards, to every nook and cranny of the globe; the speed of its movement has increased, to milliseconds; and its control has extended to include “everything.” We now live in the era of global finance capitalism.”

My father’s story above was that of a middle-class Indian’s, one with far more privilege as compared to millions of Indians who do not have any luxuries of savings or retirement benefits. But therein lies the moral, if any, and the warning – the Indian economy is increasingly being financialized and people from all walks of life are inexorably being drawn into it (every chaiwala, phalwalah, kirana-store, phuchka-stall has been coaxed to accept digital payments). On cue, the digital payments portal, PhonePe is hobbled currently because of issues at Yes Bank!

Till some time ago, Yes Bank was the blue-eyed child in India’s banking industry. It was everywhere, at every gala event, lending merrily to all manner of rogues: “IL&FS, Dewan Housing, Jet Airways, Cox & Kings, CG Power, Cafe Coffee Day, Altico – name a bane of Indian financial services sector and YES Bank was as a key lender,” so goes the subheading of a Business Today piece. They were the poster-boy of the new-age, aggressive, glamorous banking that we’ve recently grown to admire.

How do our financial-oversight bodies, our governments, our banking-watchdogs allow such activities to happen? How do such bankers, time and again, indulge in the worst form of financial malpractice and the entire financial industry remains oblivious?

Ordinary people – Dalits, adivasis, Muslims – are jailed on the mere suspicion of a crime, without any evidence, and such financial embezzlers bilk the ordinary people of their hard-earned money and they are the models of the society? They are the ones slavishly invited to every business school to their convocation, to every platform on the “state of the economy” etc? (The reputed Indian Express, bringing us the “Journalism of Courage,” hosted Goldman Sach’s Chief India Economist just a few days ago for insights on the Indian economy. Does it need reminding the Goldman Sachs was one of the prime culprits in the 2008 Wall Street crash? I guess the next invitee will be Rana Kapoor, former CEO of Yes Bank, for tips on ethical banking).

And how about the financial analysts and consultants who “package risks,” manage portfolios, and administer the financial instruments that are then sold to unsuspecting customers? Are not also equally guilty every step of the way, from planning the funds, to investing in companies without in-depth research?

And yet society rewards such criminals with high-paying jobs and prestige.


After his Harshad Mehta experience, my father became extremely jumpy on all matters related to money. He strictly advised me against opening accounts in one of those “fancy private banks,” that were cropping up at about that time. “In private waalon ka koi bharosa nahin hai, kab paise lekar bhag jayen,” he would vehemently caution me.

He passed away before the issue of PNB’s loans to Nirav Modi became public. And as another report reveals about Yes Bank crisis, even the State Bank of India (SBI) has a substantial amount invested in Yes Bank shares: “There is an interesting interdependency here between Yes Bank and other India-based Banks such as State Bank of India, HDFC Bank etc. Most of the Mutual Funds floated by these banks have substantial amounts of stock in Yes Bank…Some of the biggest exposure is in SBI-Equity Hybrid Fund and SBI-ETF Nifty 50 totaling over 100,000 crores.”

One only hopes that there are no more people like my father, who suddenly see their life’s savings vapourize all of a sudden because of the avaricious, scheming and swindling ways of some. We know that even with the most suspect dealings and underhand ways of dealings, some banks are too big to fail, as people learned in 2008. And the slogan that rang across the US and the world still rings true today: “The banks got bailed out, we got sold out.”

Aviral Anand is a socially-concerned citizen of the world, currently based in Delhi. He believes in all kinds of solidarities with global struggles, such as the working class, indigenous and other marginalized peoples’ struggles around the world.


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