Tuesday, November 23, 2010

CIRcle of Life

Generally speaking, from the universe of my acquaintances in the thirty-some years on the planet, the set from School would be in summary the oldest and most valued of relationships. To boot, a majority of this group would rate higher than average in terms of phrenic acumen as well as worldly success. Hence, when no less than three such friends seek me out in the space of a few weeks with queries on financial products, all centred around the theme of credit history, something does seem amiss in the State of Denmark!

Proceeding under the assumption that a general outbreak of penury has not gripped the Class of 1991 (and the financial transactions intended certainly pointed in the opposite direction!) the spate of enquiries was highly suggestive. My direct hypothesis was our collective lack of appreciation for Credit Bureaus and their rapidly expanding sway in India's financial system. (Incidentally, using the plural is accurate, though only Credit Information Bureau India Ltd or CIBIL is completely operational; Experian shall be the second Bureau and more are in the pipeline). A quick primer therefore seems in order.

Simply put, a Credit Information Company or Credit Bureau is a repository of credit histories of individuals and companies. It is premised on the principle of pooled information - all member banks and FIs share credit line and payment data with it - intended to facilitate better credit decisions for lenders as much as appropriate terms for borrowers. Bureau data is formatted into a Credit Information Report or CIR which can be accessed by member institutions and the concerned consumer or commercial entity. It is this CIR that is increasingly being leveraged to assess creditworthiness in India as we speak - a decades long practice in the developed world.

Therein of course lies the rub. The widespread usage of CIR is a relatively recent development and customer awareness has been potentially inadequate. Combined, this has meant low motivation to keep Bureau data entirely accurate and updated, leading to a good chunk of borrowers being not-so-pleasantly surprised by their CIR's contents (and hence those calls to folks like me). Bureaus are mostly not to blame though - apart from their impeccable credentials (CIBIL for instance was cofounded by SBI and HDFC with SME's D&B and TransUnion), inaccuracy of information strikes at their very raison d'etre. Similar vested interest may have been presumed for Banks/ FIs but unfortunately in CIBIL's nascent days a good chunk of members were curiously over-protective of their databases, loath to share vital information with the others. (That this futile stance changed is in significant measure due to the 2008 Crisis, when the industry woke up to dangers of one-upmanship!) There may have been infrastructure issues in data capture and storage in the past too, especially with PSU players. And last but not least, consumers may have been less than responsible with closure of seemingly trivial issues, including occcasional wilful default, all leading up to a messed up CIR.

As things stand, the CIR is now a part of life (a common misconception is that only delinquent accounts get reported to Bureaus - not so, they carry all records). In fact we should consider it a near certainty that CIR usage shall transcend beyond lending decisions to Utilities and other necessities of life. It is also obvious that information capture and permanence will be in a different league post Aadhar implementation. It is indeed not impossible to envision the CIR become an input for employment decisions (say, in BFSI or for company directorship etc), perhaps even indirectly impinge on social contracts (public office for instance) going forward.

Meanwhile, for those with current or future borrowing needs (almost everyone in modern India's consumerist paradigm) and at all concerned with credit availability and terms (pricing is obvious; equally credit delayed may be credit too late - ask folks foregoing cash discounts when buying that new house), an impeccable credit history is highly desired. Also, even as you get disciplined in future payments, check your current CIR from CIBIL at www.cibil.com/accesscredit.htm as first step (errors if any will have to be corrected via your Bank/ FI that has reported them so write to it for rectification). The time to act is now!

Friday, November 19, 2010

Wheels of Fortune

Having tread the more familiar, beaten end of the path last week, ambition drives me to talk glitzy and stratospheric today. My motivation in changing gear from the Bicycle to a Bugatti is not entirely random though. It comes from realization, grudging as much as bizarre, that the Veyron 16.4 Grand Sport that drastically redefined the automobile pricing summit in India, is not merely about libertine luxury but actually a fulfillment of some much humbler prayers!

First things first: it is now three weeks that the Volkswagen (literally, Peoples' Car) family launched the Veyron from its Bugatti stables to add to the options for India's Super-rich. The crown of the nation's most expensive motorcar offering is not quotidian: the Veyron sports a daunting tag, at INR 16Cr onwards a little under 3X its nearest competitor! Yet, my middle-class, nitpicking mind did not miss the claim by its aptly named sole agent, Exclusive Motors, that the gap between Veyron and #2 was much larger. Perhaps they missed the launch of INR 6Cr Merc S-Guard in Feb (for some reason a day after my birthday, if only!); maybe they decided cars not retailed by them did not qualify. Nevertheless the tab is impressive (not to forget an unkind, if pithy, suggestion to rebadge it Veyron 18 next year unless inflation bucks its double digit trend). Equally, for those still stuck to more commoditized mindsets, it is most instructive to note Bugatti's annual sales plan, all of a challenging 60-80 units worldwide, including likely 3-4 Indians globally.

Ignorance and presumed readership interest dictate me to gloss over the car's intricate details (noteworthy stress in launch press releases any how was on components of 'special materials - titanium, magnesium etc' handcrafted at Bugatti's French HQ, perhaps playing to the khadi brigade; or 'Puccini sound system with digital signal processor' variety of abstruse). Certainly, it should be safe to assume the Veyron would be a hedonistic delight, with top-notch safety features and on-tap-performance (unlike me, some drivers are seemingly able to discern every tenth of a second in a 0-100 kmph dash, the car in question clocking a 2.7). Above all, its modest volume target and the excessive hype around price are highly suggestive - what may draw prospective buyers is badge value and exclusivity rather than trivia like its pacy 407 kmph, or worry for the 10% speed compromise with the roof off.

The performance numbers do beg an obvious question: where-on will the Veyron get a chance to perform thus for its privileged owner? Of course, one is not unfamiliar with the analogy of a powerful sound machine providing decidedly superior auditory experience at lower volumes too. The appropriate situation here, however, is of the equipment being mostly forced on mute (disbelievers may try DLF Cyber City early morning, or all evening, to truly appreciate the engine's idle hum). And therein lies Reason #1 to have prayed for the Veyron's ilk: folks who buy this car would be from the ranks of the high-and-mighty, eminently better placed to motivate our civic authorities to build roads instead of potholed dirt tracks (chalo Sohna Road, rather, most of Gurgaon, if you find the depiction pessimistic). Their frustration matters, unlike ours, hence my hope!

Unfortunately the road-building fantasy may come up short against the brutal realities of our obdurate bureaucracy. Regardless, another Veyron attribute makes an even bigger, better case (raison-d-etre if you will) for my fervour. Reason #2 is, simply, its price. One hears (and of late there is little to distract) corruption rajas of contemporary India swindle 1,70,00,00,00,00,00,000 (please check my zeros someone) Rupees improving connectivity; others siphon off the good part of a (relatively modest) few tens of thousand crores when organizing a sporting event, almost killing the goose itself; an ideal housing scheme for Kargil War vets degenerates into a (paltry) some hundred crore scam. It is a struggle to grasp the enormity of these astronomical amounts - arithmetic begs a picture, worth a thousand words (crore actually). For instance, growing up in Middle India, one imagined lakhs via sundry cars; now talk a crore or two and visualize that apartment of our dreams; but, by God, a few hundred crore, and many more? Head-reeling numbers and 'everyday the paper boy brings more'? And how do they make that kind of money? Why want to? What to do with it? Enter Veyron, up the ante for cars, and at least there is the start of improved perspective. Of course, humble India needs more such symbols, if only to help us learn the New Math (of the dubious) and enhance our imagination.

Obviously this is hardly to pull the VW car down (and is too far removed to be a case of sour grapes)! Equally frankly, my congratulations to any actual buyer is half-muted; appreciation of its technological marvels or epicurean appeal has been dulled by a generally eroded conviction in the balance of good and bad karma in the world. Yet, as caprice scales new heights and honesty gets scarce to the point of endangerment, some core beliefs need reassertion. Skeptic yes, shades of grey perhaps, but one ought not succumb to the ogre: no comfortably-numb suicide. Selfishly and for posterity, the choice is to stay angry, lest we get stuck in a Wheel of Misfortune!

Saturday, November 13, 2010

The Cycle Diaries: Bihar 2010

My apology to Che-lovers for the title, but the pull of the wheel has been strong in this space these last few days, and it sounded like a good time to talk 'cycle politics' in my beloved home state! For the politically disinclined or oracularly averse (you would be hard put to find self-respecting Biharis willing to go by either description) the crucial eastern state is mid-way through polls to elect a new Vidhan Sabha. Truth to tell, in the fractious cauldron of Bihar's polity where caste often looms larger than life, the election appears a close call. (At the very least, it may not be the cakewalk for the ruling NDA that the Media would have us believe). The battle is, equally, critical to fortunes of at least two regional satraps with thinly-veiled national ambitions. For the country's largest party too, a toehold in Bihar is crucial to its longer term consolidation plans.

Naturally, with such high stakes, it is a no-holds barred fight, with participants of all ilks looking for and playing up the minutest of issues. One idea that has thus taken centrestage is the Mukhyamantri Balika Cycle Yojana. The scheme is simple enough: it entitles girls who pass Class VIII in government schools to state support in form of a free bicycle, or INR 2000 to buy one. (It should come as no surprise that though the Nitish Kumar government has extended the scheme to boys, it is only the promise of female empowerment implicit in its original version that has caught everyone's fancy in one of India's most backward states.)

On his part, Nitish has not shirked from riding the bicycle into the grime of electoral debate. He has extolled its virtues, from obvious aspects like education enabling gender equality to deft positioning as a lesson in striking balance. The latter in particular is a veritable coup d'maitre: in a single turn of the pedal, it transforms the potentially conflict-creating shades of any force of female assertion arising from the scheme, and adds character of blend and acceptability. The logic is pithy, indeed vital in the extant male dominated quasi-feudal milieu, but clearly there is bigger game afoot.

In the larger picture, Nitish knows that the issue of governance played more than its part in pitchforking the NDA to power in 2005 (and reinforced in 2009) when his predecessor's much-vaunted contempt for vikas as a demotic issue came up electoral turtle. (Go back in history and one could make an equally good case via Rajiv's freshman promise and appeal to change in the massive post-Indira assassination mandate.) In short, development may not be an absolutist winning ticket but it can be a great consolidator in electoral sweepstakes. The wily politician in the Bihar CM reckons he needs every card on the table to retain the edge in its complex electoral arithmetic. (The same come-all desperation also motivates his covert appeasement of neo JD-U converts and the occasional bahubali, moves that are termed capitulation by pro-vikas votaries in the intelligentsia.)

At the same time, the pragmatic Nitish recognizes he is no Narendra Modi, missing the BJP strongman's masterly leveraging of the governance plank, and indeed his enviable track record. Even Modi's biggest detractors (and Bihar's CM does occasionally assume that garb) cannot turn from the single-minded determination that Chhote Sardar brings to Gujarat's development agenda, or his patience-is-not-a-virtue attitude to execution. Unfortunately Bihar under NDA rule has mostly struggled to shrug off the negative growth RJD legacy and actually partially benefitted from its shrunk-denominator effect. In a nutshell, it is no one's case to argue that no good has come about in Bihar post 2005, but its pace has been painfully slow and corruption has continued to sadly fester. The incumbent CM therefore has little choice but to root for the symbolism in the bicycle scheme.

The compulsions for Nitish's main challenger are of course entirely different. Shri Laloo Yadav is looking for a way out of political Recycle Bin, hoping that the cycle of change makes people vote RJD's lantern back to power. The path is hardly rosy and the 70+ one-time kingmaker has struggled to brew a concoction to renew his spell, apart from hope in Rambilas Paswan's vote-transfer ability. After initial flirtations with the development plank by pointing to his record as Railway Minister (a claim made hollow thanks to Didi's revelations) he reportedly tried one-upmanship too - promising Class IX students motorcycles if victorious (so much simpler to match 1-kg rice with 2, alas!) but thankfully did not persist. It is, after all, one thing to turn animal fodder into millions, and quite another to conjure up finances for a mere-paas-motorcycle scheme (petrol bhi hai?). And then there is the minor happenstance of students not being of driving age, a fact that Nitish was quick to drive home, calling his bete noire's schemes as "always meant to land you jail"!

We have had some RJD leaders attempt murder-by-whispers too, with talk of how bicycles were being used to finance eloping couples, inter-caste marriages and what-not. Such slander campaigns sit light though, and most Biharis are too politically adept to miss the attempt to wash over Lalooji's misgovernance credentials (he once publicly castigated his trusted lieutenant, Raghuvansh P Singh, for mentioning development during an election rally, calling it an avoidable digression from the fight against communal forces!). Hence, his core support base more or less intact (though there is some talk of post-Babri Muslim angst changing this at a local seat level), Lalooji has been left to ponder where the additional numbers will come from. One can never write him off too soon, but it has till now sounded like a far cry from the days of samose-mein-aloo.

In a few days from now, we will get to know how it stacks up. Yet, irrespective of party inclination, a political lesson cannot be missed and is a harbinger of hope for the Bihari in me. Holding its own amidst the high stakes and tightly strung social equations, the humble bicycle, campaign rally exhibit extraordinaire, epitomizes the inevitable drive of economic progress and inclusive agenda. Or as a much wiser man once put it, one cannot fool all the people all of the time!

Thursday, November 4, 2010

In Driving Seat!

My credentials as a backseat driver are rather suspect, to say the least. Hence it is not easy for me to put to paper experiences of a driving kind, but a Zen moment this Tue morning, amidst Cyber City rush hour traffic, did cause me a pause - hence this. (To make a full confession, one must add that it helped that this was also a week when Delhi formalized its intent to - finally - bid adieu to its dreaded Blue Line bus fleet.)

Now for the last few years, my chosen set of wheels has been a truck (actually two, both poor man's SUVs to boot). Naturally, if for no other reason, this has put paid to any ambitions of one-red-light-to-the-next Formula 1 speed thrills that most Delhiites consider their bounden duty to practice. In fact, enough of them (any number exceeding zero is too many, in my book) take the killer-instinct facet of their nature too literally for anyone of sane counsel to desist from indulging in pyrotechnics behind the wheel - unless desiring publicity as the day's victim is some horror tale of road rage. In such trigger-happy times, one is therefore left with not much choice but give the next horn-prone pup right of way, and enjoy the wafts of dhakchik-dhakchik music they leave in their wake. (Back in College, it was a source of much wonder for me as to how so much noise pollution was managed, till someone clarified that specialized - and naturally expensive - equipment was duly installed to create the jhankaar beat!) A show must be made, after all. And it must go on.

Cut to 2007. With a good chunk of my motoring in Gurgaon, with roads that rivalled Laloo's Bihar for non-existence, one learnt new lessons in forbearance. The strip availbale to drive was narrow, the traffic unending, and the desire to be first in office all consuming. With such evolved mindset in the fellow driver, there was little to do but enjoy oodles of me-time stuck in bumper-to-bumper traffic. (This of course rendered the no-handphone law quite redundant - they may be little distraction in a sea of red that a million feet on the brake pedal and no street lights produce!) Yet, to go back to the question of road rage, two competing species were found in abundance - the Call Center cabbie, overworked, underpaid and an embodiment of a what-me-wait credo; and the local agriculture-culture afficionado, sometimes on a tractor, often on an LCV, for whom a 4 lane road meant 2 opposing lanes on either side of the median. Ouch.

In such a setting of bad-road-worse-traffic, and caught amidst a Darwinian struggle for survival between might-is-right tractor and no-waiting-no-stopping Qualis; it would be rank dishonesty to claim that my patience levels, though infinite, were never tested! Faced with an assault of the senses, it would be a body much worse conductor of heat and or electricity than most folks of my acquaintance, including me, that would not occasionally boil over. And so, unfortunately, we succumbed. Thankfully we survived too. Yet, my lasting memory of any such skirmish was no sense of victory in getting the better of it, but clenched teeth, muttered breath, foul mood, and more.

The tale this Tuesday, though, is not of victory. Though running a wee bit late to work, and just the final turn in to the office building, my focus was tested by two gentlemen who, though not out of nowhere, decided to forsake the median they were perched on, and jump right in the my straight line path. The traffic having just cleared up, my newbie enthusiasm for an automatic was finding expression, when one had to resort to testing that other novelle feature - the ABS. The steed responded well enough, bringing me up well short of the duo - who were any case a study in indifference. Perhaps it was appreciation of the advancement in automobile technology (we do love instant responses, don't we!) or satisfaction at my holding my own against the vagaries of time (my split second reaction), but the three of us (yes, thats me included) each broke into a smile. To make matters more profound, and at my gesture bidding them to pass (one has to do a Cyber City cross-country to fully appreciate this) they responded by waving me on instead.

And so where there may have been righteous indignation or early morning vocal chord exercise (on either side), but certainly all round frustration, we had smiles, thank you! (Looking back, one is thankful too for the pre-brake speed that precluded any of my following traffic getting too close for comfort!) A good start to the day, we say. Or, in effulgent Diwali spirt, hope for more :)