Bhrigu's question

कभी जो याद भी आता हूँ मैं तो कहते हैं के आज बज़्म में कुछ फ़ित्ना-ओ-फ़साद नहीं - मिर्ज़ा ग़ालिब

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Location: the valley, California, United States

Bay Area, Strategy Manager, Haas- U. C. Berkeley, Marathons

Thursday, August 18, 2005

Bankrupting the nation

This will result in a lot of party workers, civil servants and other assorted constituents getting rich. My guess would be that a large majority of the disbursements will be on paper and will be made to fictitious persons. Back in the 1980s, economists & bank officials had apoplexy when Janardhan announced his loan-mela scheme. It was disastrous and was one of the many causes that ended up bankrupting the nation.
Once the Loan Melas’ ended, the boom ended and India was caught in a vicious spiral, even worse than where it was before the boom (hard as it is to imagine). The banks were caught with unbelievable amounts of bad loans and many were solvent only in name. The following recession and the near collapse of the banking industry hobbled India well into the early 90’s. No one knows what became of JP [Poojary] though most speculate he retired in a good comfortable home and probably gave himself a small loan in the end for his efforts.
The Congress & the left parties continue to enrich to their vote bank at the expense of the nation. As always.

5 Comments:

Blogger zap said...

This is to do with the article from Prudent Bear -

Loans given in melas are made the underlying asset securing the deposits american people make in these banks who lend out loans in melas. Fine...
But if the government is guaranteeing the loans i dont see what risk the innocent american junta face.
Recession, yes...but that will hit all of america not only those americans only who "are holding debt securitized by loans in their money market accounts" - loans given out during these Loan Melas..

Any thoughts??

9:01 AM  
Blogger Quizman said...

Zap,

Frankly, i have no idea about the American system. I do know for a fact that loan melas by puclic-sector banks drove bank officials crazy since it was bankrupting the nation. These officials often had to disburse loans without adequate collateral. I recall that firecrackers were exploded in front of the headquarters of a bank on the day Janardha Poojary was removed from that portfolio.

4:53 PM  
Blogger zap said...

oh yes. The JP story is quite well known and obviously the stuff happening in America will hurt the American economy as a whole sometime, though, to what extent is unclear...
I was only struck by that one line in the article on Prudent Bear... purely academic curiosity, since it reminded me of all the fin classes i bunked at bschool:)

12:28 AM  
Blogger J. Alfred Prufrock said...

News Flash:

Sonia Gandhi to appear in remake of classic 1985 music video.

(You know the one .. "That's the way to do it / Money for nothing and the chick/s for free")

J.A.P.

2:57 AM  
Anonymous Anonymous said...

Ok. Does any one know how much the banks lost due to loan mela. Ok does any one know how many poor people benefitted from the scheme. Now tell me how much kingfisher is bleeding our banks. The loss is 100 times more than loan mela. Who benefitted from loan mela few lakh of poor people. And now it's one already rich man.

7:09 AM  

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