A Flamboyant Figure

I was in charge of CPC (credit processing centre) for small and medium enterprises, where I had to appraise, analyse and sanction the loan proposals recommended by the local branches of my bank.

One day I received a proposal from one Chhote Lal, who had one showroom each of of Hero bikes and Maruti cars. He was managing bike business, while his younger brother was looking after car sales. He wanted us to takeover his loan from another bank with substantial enhancement.

The reason for his approaching us was that their present bankers were not willing to enhance the existing limits. It was rather surprising, as he had a thriving business. His showrooms had more than hundred bikes, and around ten cars.

I came across certain interesting facts about him. Chhote Lal’s father had migrated from U.P. decades back and had started a business of sweets and snacks. He earned a lot from that business, and placed emphasis on their education. The well-educated sons thought of doing something different and big.

So they started dealing in bikes on a small scale. It proved to be quite beneficial, and they went on expanding their bike business. Finally, they also diversified their business into car dealing by getting their cash credit limits further enhanced. They had also acquired a lavish beachside flat. Everything looked promising. I decided to go ahead.

As the amount involved was huge, I preferred to handle it myself. The existing bankers had given a good opinion report on the firm, but a good opinion report may also be a ploy to get rid of a bad account. One has to fathom further before taking such a big stake. I examined the account statement, but the turnover was too less, not commensurate with the volume of business he had. It was not at all convincing.

Moreover, he was offering certified documents, instead of original documents of the properties proposed to be kept as collateral security. It was surprising that the existing bankers had accepted certified documents only. I sent one of my appraising officers to the bank concerned, but he couldn’t fetch any relevant information, as all officers were tight-lipped there.

Then I visited showrooms. The transactions were going on in full swing. Vehicles were also there, as was reported. I asked for sale purchse invoices and related documents. Most of the transactions had either been carried out in cash or routed through a different current account. I sensed some trouble over there. My sixth credit sense said, ‘no, a big no‘.

I came back and returned all the documents to the branch concerned. The Manager raised hue and cry that I was not supporting the business growth. My boss called me to know the reason, and I simply told him that it was a risky business, not in the bank’s interest.

After completing my tenure, I was transferred to Zonal Office, and thereafter, I lost track of the incident. After 2 or 3 years, I was stunned to find a news item in the local newspaper that Chhote Lal was arrested in a ponzi scam. It was also reported that he had duped several banks.

–Kaushal Kishore