Page 85 - A Banker Down the Rabbit Hole

25. Managing the public perception-

loans through the equipment dealer

T his was the first time I was heading a medium sized branch. I

had a Loan Officer attached full time here. In our service area,
we also had targets for granting loans to farmers for various
purposes like tractors and tillers, purchase of irrigation pump
sets, fertilizers and high yield seeds for crops, land development and
other modern mechanized farm equipment.

We had a few Current Accounts of some firms and companies as they
were not small savers and hence prohibited from opening Savings Bank
accounts as per RBI rules. They were supplying irrigation pump sets and
other farm equipment in adjacent bigger cities. One such dealer had
nominal balance. He came to the branch, introduced himself and
deposited a sum of Rs. 2 lakh in his Current Account. He told us that every
time a new Branch Manager joined, he was approached for keeping some
deposit at that branch. As I had joined recently he thought it proper to
meet me and give a deposit. It indeed was a big deposit in those days
for such a medium sized branch

He requested us that like previous Branch Managers, we should direct
our borrowers to buy farm equipment from their dealership and also
consider loans for borrowers whose documents were submitted by their
dealership and process them on priority basis. I understood the whole
issue but knew that such practices were prevalent in all the banks. I told
my Loan Officer to consider any cases sponsored by them on merit and
we may disburse the loan without undue delay. He sponsored four cases
in a period of about two months and on proper appraisal and field
inspection, we quickly granted the loans in 3-5 days each. We were to

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