Page 245 - A Banker Down the Rabbit Hole

Within next about 5-6 months, it become clear that bankers did not form
a consortium to support the Silicon project. Now it was time for us to
take steps to safeguard the bank from losses due to possible diversion
of funds. Chief spoke to the leader of the consortium and discussed the
issue under the then prevailing circumstances of the group. He suggested
that in the impending consortium meeting for BAL next month, the leader
bank should pose a question to the BAL Management how they will save
the silicon project without taking out funds from BAL project for which
existing consortium has provided funds.

During the meeting, when these questions were raised, the company
could not reply satisfactorily. All members of consortium were put on
guard and members insisted that the company should assure what
mechanism they would put in place to show them that funds had not
been diverted. The leader of the consortium proposed that an external
audit should be conducted by the auditors appointed by leader of the
consortium to check utilization of funds every quarter lent for BAL and
report will be circulated to the member banks.

After about 6 months from there, we got sudden sad news that the
Chairman of BAL had expired. It was a rude shock to the banking
community. A meeting of consortium was called to review the situation.
It was found that the company had very sound hierarchal and succession
planning in place and there was no cause for worry for the time being
and bankers' consortium decided to continue to support the BAL. The
Chairman had already inducted his young nephew a few years ago into
his business. The wife of the Chairman started to attend the office and
groomed herself and her young son for the bigger role in the future. BAL
survived and grew with time.

No lending bankers are free from stress and similarly businessmen are
also prone to ups and downs in business. There may be sharp decline in
demand due to economic cycle or change in Government regulations or
withdrawal of concessions by the Government for that sector. The

242 | A Banker down the Rabbit Hole