Column

They seduce with easy credit, devastate with high interest and then send out the goons

Metronama

The Treaty of Versailles (1919) that imposed ludicrous fines on Germany after the World War I played a part in raising the Nazi stock. Banks like the HSBC, which have daft, oppressive credit-recovery policies, might just create the conditions in Mumbai for the development of new wave vigilantism.

I say so because I carried out an experiment that educated and disturbed me, almost delivering a thumping one-two knockout punch. I have been a HSBC credit card customer for over a decade, and I used to run-up an annual bill of Rs2.5 lakh. And I always paid up in time, and in full. So when I observed the trend of banks’ recovery agents driving creditors to suicide, I decided to gauge what happened if I delayed a payment for a day. The HSBC sent a goon to my house the very next day.

Of course I yelled him out: I have the advantage of a phone-book full of people who either batter goons, or get sloshed with them. And because I have been trained as a reporter, I usually pay back a punch in the gut with gusto and a kick in the groin, and then I gouge their eyes out. They function as the headline and intro of my main message.

Anyway, I later called the HSBC and cancelled my card. I felt no pain in ending a decade-old relationship, but the bank seems to miss my patronage. The bank’s representatives have made several cowering calls to seduce me back. I will not budge, because the HSBC, like most banks, is creating a sweltering pool of discontent and anger. It is a recurring deposit of bad faith.

After their enervating victory, the Allies first wanted 226 billion Reichsmarks in gold (around £11.3 billion) from Germany. The fine was later reduced to 132 billion Reichsmarks. Germany had maxed out its reserves in financing the war, and clearly could not pay the outstanding bill. One solution was to let Germany pay in kind, in form of produced goods. But the Allies did not want their domestic manufacturing to suffer. So they derived the most amoral bureaucratic calculus. They offered Germany a loan to pay the fine, and charged an interest on the loan.

See the parallels? Banks like the HSBC offer a poor sucker - often carefully chosen from a pool of non-journalists, non-police officers, and non-politicians - a credit limit that is three times his or her salary. Of course, the spendthrifts must acknowledge their profligate ways. But banks like the HSBC devise institutionalised ways to trap people in debt, and then send out the goons. They call it business.

Better watch it, ye banks, it will take just one group of Mumbaikars to corner just one recovery agent.

Email:raghu@dnaindia.net