A small story which describes the impacts of Monetary policy - 2011-12 of RBI released on May 3,2011:
A day in Dec 2011
Renga and his family:
Ramba: Get up and get ready fast, dear!! Its already 10 o' clock. The banks will get crowded! Then we cant meet the manager for our loan.
Renga: Yeah, that's where we get money from customers immediately! And food prices are more or less stabilised and so suppliers wont pose a problem. (thinking in his mind) and I can always rise the menu prices now and then blaming on inflation.
Bank guy: Sir, actually, pretty good! We give a lot of loans these days since we have a lot of cash with us through savings accounts. People deposit more money in savings these days because of the increase in interest rate from 3.5% to 4%. And no big companies take loans these days as all productions have dropped. So we give loans to all retail customers.
Bank guy: Til then, we can offer you a credit card sir. We have launched a new chip based card based on the monetary policy. Interest rates are only 24% pa. Would you like to use it for two months, sir?
A day in Dec 2011
Renga and his family:
Ramba: Get up and get ready fast, dear!! Its already 10 o' clock. The banks will get crowded! Then we cant meet the manager for our loan.
Renga (grumbling in sleep): I have already asked the bank guy to come here for loan document verification. No need to go to bank.
Ramba: But, how come?? Documents and details?
Renga: Uffo!! I submitted everything online last night itself!!
Ramba: But this bank doesn't have internet facility, right? Its just a cooperative bank!!
Renga: Oh idiot! It was activated last month itself! All urban cooperative banks can go online as per this year monetary policy!
Ramba: Oh. sorry, I didn't know that.
Renga: What the hell do you know. You don't know to cook a good chicken dish also!!! Now get lost from here and don't wake me up till bank guy turns up.
(At 11 am with the bank guy)
Bank guy: So Mr.Renga, why you want this loan? Can you explain about your previous job?
Renga: I was a stock market trader in Mumbai till July. In new monetary policy, they said they are going to increase repo rates. As a result, bank lending rates went up and production went down and all my stocks also fell down rapidly! So I came back to my hometown here to start a restaurant.
Bank guy: So, why exactly a restaurant?
Renga: Yeah, that's where we get money from customers immediately! And food prices are more or less stabilised and so suppliers wont pose a problem. (thinking in his mind) and I can always rise the menu prices now and then blaming on inflation.Bank guy: Blah blah blah (for 1 hr)
Renga: Blah blah / shit / fuck (for 1 hr)
(1 hr later)
Bank guy: Ok sir, we will get back to you in 2 days on loan approval!
Renga: So what are the chances that I get this loan?
Bank guy: Sir, actually, pretty good! We give a lot of loans these days since we have a lot of cash with us through savings accounts. People deposit more money in savings these days because of the increase in interest rate from 3.5% to 4%. And no big companies take loans these days as all productions have dropped. So we give loans to all retail customers. Renga: Oh, thats good news! And one more thing. my brother is planning to send me some money from US. But its taking long in other banks to clear all the transactions.
Bank guys: Oh is it? We can help you out, sir. All foreign transactions are very simplified and its very easy to clear it through our bank.Give us the details sir.
Renga: That's awesome (he gives the details)
Bank guy: We will call you in a couple of days, sir.
(That evening Renga takes his family for a treat hearing this happy news. And when the bill comes to his table...)
Renga: Oh my god! 4000 bucks! All my extra interest through savings bank is gone in one dinner.
Renga's father: I told you, asshole, that 0.5% interest is nothing! Seriously there is no big benefit in your useless saving account!
(After a couple of days)
Renga: Hello, who is this?
Bank guy: We are calling from the XXX Cooperative bank. We are sorry to say that your loan is not approved.
Renga: But why?
Bank guy: Because your past records online are so fucked up.
Renga: (thinking)Damn it. Now that's the online disadvantage!
Bank guy: And we got your brother's money in your account in our branch. You can withdraw it after 2 months.
Renga: Why the hell you want 2 months?
Bank guy: Because, we have sent your loan application to our head office again. Reapproval request takes longer time - 2 months.
Renga: Who asked reapproval. Just give my brother's money!
Bank guy: No sir. After getting your brother's money we had a second thought to sanction your loan. So we have sent it for reapproval.
Renga: You idiots. I don't get any money for next 2 months?
Bank guy: Til then, we can offer you a credit card sir. We have launched a new chip based card based on the monetary policy. Interest rates are only 24% pa. Would you like to use it for two months, sir?Renga: Fuck you!
Bank you: Thank you sir and fuck you too!
(Line goes dead)
