Elders and defaulted bank loans – Some striking similarities
It is interesting to note that there are striking similarities and parallels between how elders and defaulted bank loans are created and treated. No malice is intended.
For the banks, an advance (loans) is the staple. Like the excessive intake of starch, also causing diabetes, some banks are beyond the pale of even the advanced treatment recommended to for chronic diabetics.
Advances can be broadly categorized as regulars and defaulted ones. A bank is healthy if the regulars occupy a preponderant proportion of their portfolio. Such loans also conform to banking norms.
Rot in the mango manifests at the ripe stage but its genesis is at the flowering stage. The insect settles there. Similarly the seeds of default are sown at the pre-sanction stage. When considerations other than banking creeps in and sweeps away the cautious banking norms it erodes the trustee aspect of banking. The burden of this note is not the plight of a banker overburdened with an overdose of delinquent advances but the plight of the elders which manifests features observed in the past due to loans and their treatment in the branches and even the decentralized controlling offices.
The elderly people are now referred to as Senior Citizens. So also the defaulted loans are referred to as non-performing advances. The matter of fact names, elders and past due loans, are preferred for the change in nomenclature has not achieved its purpose.
The elders are the leftovers in most of the households. They get neglected. The children are too busy fending for themselves that the aged parents have to fend for themselves. In most of the households in most parts of the country the householders are the older people and the young ones are either away, abroad ,or missing and if around have no time to look after them, their parents. Even those who have the heart or the conscientious desire find it almost impossible thanks to the prevailing situation of uncertainty and insecurity and the need to overexert.
The move to create a separate institution to mind the past dues is similar to what one amiable Peradeniya Don described as returnees from abroad who come with newfangled notions with their degrees but no sooner they arrive they go in search of elders homes to pack off their aging parents.
The treatment of past dues is an interesting study in bank management. Here too the rot begins no sooner the loan is granted. Like the pre-election smile and post-election frown or the arrogance, the defaulter shows his ugly face right from the beginning of the repayment period, especially if he used unconventional moves. When the first instalment itself is due they do not pay. If the loan is granted by the same set of staff, they know the reason and they tend to softpedal. What happens is the first default, and the non-action gives that required impunity and he continues the non-performance. Well the printed forms are sent or recorded as sent. There is no follow-up. He is made to feel that he has bought the loan, by greasing the palms.
Similarly children too neglect their aged parents to live on their reserves. Once the parents ignore that indifference, the children get emboldened and think that their parents can manage on their own and are left to themselves. Nobody knows whether they are living, half-fed or starving. Parental indulgence or even self esteem prevents them from exposing their progeny or even demanding from them. They too become as scarce as the elected members until the next hustings.
The branches have an interesting thing called allocation of duties, and rotation of staff. The strong go into the lending side said to be the playground for the efficient ones. The least efficient, or aging person or the garrulous one that does not sit and work is asked to man the past due section or the non-performing section. When the branch is short of staff (something that happens quite often) this past due section is the first casualty. It is temporarily closed without. Even the least efficient is co-opted into the mainstream. In most of the branches, monitoring is confined to printed letters and may be a letter of demand. If there is intervention from the immediate top or the ultimate top the action gets suspended.
Similarly in medical service in our country there is no geriatric service. Unfortunately special counters for elders are manned by those who too need such services and even counselling.
Even children have their work commitments and social commitments and parents are remembered more as child minders or their security. Parents are the casualty in a nuclear household. Of course in the joint family they at least have physical presence of children of other members and other members..
When past dues exceed the permissible limit the provision for same erodes their profits as well. If the parents are neglected and isolated the medical bill may erode their savings and earnings for which they concentrated on without caring for the old and the feeble.
This can be extended with numerous citations. Suffice it to say the genesis of the rot as in the mango may be traced back to the very victims who failed to take the correct decision at the correct time in child bearing and child rearing, as in proper lending conforming to banking norms.
R. Suntharalingam
Retired banker
Jaffna.