Page 39 - A Banker Down the Rabbit Hole

6. A defaulter getting a bigger loan

W e were grappling with the follow up of handloom loans

for recovery, visiting residences and handloom factories
throughout the city in narrow lanes, tracing the loanees
at their given addresses and asking for repayment. If not
found there, then we were making enquiries where they had moved. We
were getting balance confirmations from available borrowers and getting
written assurances of repayment of their loan EMIs. We had to grant
more loans also to expand interest income and profits side by side.

A borrower applied for a loan for setting up a few power looms in name
of a firm. We prepared a credit report on him and his guarantor. I made
a personal pre-sanction visit to his proposed place of activity. Everything
else seemed okay. We granted the loan and disbursed the amount for
purchase of power looms. While scanning loan accounts for preparing
periodic information for management, I got a feeling that I had seen or
heard the name of the owner of this firm in some context. I could
remember it after sometime that borrower's name and father's name
was the same as the proprietor of the firm we had financed for power
looms. He had not repaid the previous handloom loan in his personal
name and had taken another loan in his firm's name.

First, I felt guilty that how we could give another loan when there was a
default in his first loan but I analyzed the situation under which it
happened. We were a new team of officers at the branch and the team
who had given earlier loan had been transferred. We could not familiarize
ourselves in such a short time with names of large number of handloom
borrowers around 450. We had no computer systems installed in those
days to search the names or customer IDs by name, phone numbers or

36 | A Banker down the Rabbit Hole