The universe runs on one principle, Change. Whatever exsists will undego change and re-invent itself with time manifesting a different aspect of its basic function. This principle is the foundation of life.
Sindhis can claim the title of the founders of the aryan race. As original inhabitants of the Sindhu Valley they have been in exsistence since the past 7000 years or so. This is the period when trade and commerce were initiated in social life.5000 years back , Aryans started forming Societies around the world. These small pockets of habitations believed that inanimate objects are the same as living like plants animals and humans and totally capable of reproducing itself. This is the core teaching of vedanta. Hence if " food money " or " monetary token " of any kind was given , then it was legitimate to charge interest. The rate of interest charged was 10-25 percent for silver and 20-35 percent for cereals. This was 5000 years back. Then around 4500 to 4000 years back the Sumerians fixed the rate of interest at 20 percent.
The word banking comes from two sanskrit words byaya or expense and onka meaning calculation. The sindhi word byaj or interest is also similar to the original sanskrit word expense. The Jews who are considered as bankers to the world have a history that can be traced to pre-christ times when they used to carry out the trade of money-lending at the temple of Solomon, built 1005 years before christ. The jews and sindhis share many common characteristics the two major being trading and diaspora. Some years back a proffesor in Allahabad University had even found that Sindhis and Jews share a very common gene pool too.
The reason for tracing back all this information is to illuminate the readers that banking like the aryan race is very ancient and has been a part of our culture since thousands of years. Sindhis especially are known to lend money to traders who used to buy and sell goods on the china-persia route that passed through sindh.
Today banking is institutionalised. Small time sindhi businessmen who were private bankers to many people who could not get complete the rigid formalities and the strict systems of rules of the these banks have found it difficult to realise the interest with many people defaulting. But there is still a way to be involved in this wonderful process which benefits both the debtor and the lender. The debtor benefits by utilising the funds to generate more money and thereby finding a way to become an uncommon man from a common man. People who have changed their status from impoverished to wealthy have all realised that success comes when you borrow responsibly and turn the debt in to an asset. When I was a small time stockbroker at the Bangalore Stock Exchange in 1997-1998, a retired Bank of India branch manager used to have coffee with me every day on the terrace of our stock exchange building near unity towers on J.C.Road. This everyday meeting between a person who had seen and experienced commerce day in and day out and an amateur who was just learning how not to get caught in a frenzy and keep away from the fiction of the stock markets taught me some of the greatest lessons in economics commerce and psychology. My tutors contention was that todays debt is tommorrows asset if carefully planned.Imagine buying a house with debt. Inflation assures that money losses value over a period of time ( Flats in Bombay 35 years back were available for 25,000 in a very good area of khar ). Now imagine putting the same money in your bank at 15.5% interest, the yield over 35 years will be around 16 lacs ( simple interest and not compound) , but the same amount invested in a house would be worth at least 5 to 7 times the amount gained by putting in the bank. An asset whether it be Land Machines or Shares would be worth more than the value of money invested wheras the actual value of money and its worth falls.
An efficient and intelligent debtor and a banker are the nessecary requisites for a growing economy. Sindhis have known this from pre-historic times and have graciously lent money fuelling growth and thrusting people from insolvency to affluence.
This article is incomplete if I dont mention the new opportunities available in Banking. This will be taken up in my next part when I continue this note. I will also be doing a dis-service to my nation if I dont mention that Gold Silver and Jewellery are dead investments and do not benefit a country nor the people.
My Last post was incomplete. My intentions in the last post was two fold , 1) To introduce the concept that banking was as ancient ( if not more ) than the vedic period, by establishing this theory I will be able to sanction my next postulate which will be that not only is banking and charging interest nessecary , it is also moral if done honourably. 2) The second point I wanted to make was that with lesser opportunities for private bankers a new thought and a fresh approach is required to continue in this industry. For people who may question why do we need to continue the answer lies in the fact that a business over many years developes an insight to throw out the inconsistencies and pitfalls. The business matures and goes into auto-correct mode. After years and years of growth the business becomes immune to the changes in the economic environment.
In this note I shall take some tips from an article which appeared in DNA on 20th October under the title " The agenda behind the anti-corruption agenda" written by G.Sampath a writer whose ideas fall very close to my thoughts. The article quotes eminent economist Prabhat Patnaiks theory that " by repeatedly associating state initiatives and programmes with corruption, you make a strong case for the handing over of public assets held in trust by the state ( such as PSU's) in to private hands." The common man is now burdened monetarily by paying much more for the services which were first rendered by the state at a nominal cost. By corrupting our minds and making the difference between nessecities and luxuries thin through the use of advertising corporations and industry are playing both sides of the game where the looser is the common man. On one hand they try and make everything costlier on the other hand they create an impression where everything is needed. In such a situation people and families spend their money before earning it.
By taking loans and not spending it on making assets people fall in to the debt trap which sucks out the life of any family. In fact the german word for debt is schuld means debt and guilt.
Everything that happens to us or is likely to happen should be taken in the correct spirit and just as as the captain of the boat never blames the storm but takes corrective and antidotal steps to counteract the storm so should we as captains of our family who are dependent on us for their existence and expense.
Looking at the whole picture with an intutive eye and observing the trends carefully is it not a good time to invest in shares of PSU banks ?
Not only are they available at below market rates and pay yearly dividend but they may be the first businesses that herald the age of compulsive spending where private moneylenders give you money to purchase the goods manufactured by themselves at a price where paying for the interest is possible only by taking more loans.
Public Utilities and Public Sector Undertakings will be a thing of the past. We are observing that cheap goods and cheap products and services are no longer available. Future will be still hard and may be we all shall need some help or financing to carry on living a decent lifestyle. By taking co-ownership in banks and becoming the shareholders , we may be able to endure the blow which is aimed directly on our children.
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