Tribute to R.K.Narayan

Tribute to R.K.Narayan

Preface:

Ø  This blog is an analysis of two novels “The Financial Expert” and “The Vendor of Sweets” written by R.K.Narayan.

Ø  This analysis is my tribute to R.K.Narayan, a genius and a writer par excellence with amazing foresight into the future…

Ø  The lines in italics and underlined below are lines taken from the novel.

Ø  I have taken the lines from the novel and related them to the present. The amazing part of it is that what he wrote almost 66 years ago (The Financial Expert) and almost 52 years ago (The Vendor of Sweets) is very relevant and true even today. Such was his foresight and vision into the future. Truly amazing...  

Part A: The Financial Expert (First published in 1952):

…Margayya, though very much their junior (he was just forty-two), commanded  the respect of those who sat before him. He was to them a wizard who enabled them to draw unlimited loans from the co-operative bank…

Ø Even in today’s world, the so-called investment bankers/ debt syndication specialist present themselves as wizards who can do anything to structure and get loans to their clients.

Ø Such specialist presents themselves with such confidence and have the gift of the gab that you think that he/she can solve any of your business problems...

... Oh! You have come back for a new loan, I suppose. If you pay seventy-five rupees more, you can again take three hundred rupees within a week!...You pay the same seventeen rupees eight annas but with another three hundred rupees in your purse. Don’t you see the difference?”…

Ø  This is what is called ‘ever-greening’ in banking parlance. The specialist would suggest the client to pay the balance and avail a larger debt, irrespective of whether the business needs the same or not.

Ø  A slight difference of this technique is, when the banker himself says that the bank will lend a fresh loan and part of the fresh loan is used to pay the old outstanding installment or interest.

Ø  One of the key reasons for such increase in bad loans in banking industry today is such ‘ever-greening’ and both the lender and borrower have to take the blame for the same.

Ø  How R.K.Narayan would have thought about it 66 years ago is just mind boggling…

…but he felt he ought to sacrifice himself for the sake of his son’s educational progress. He wanted Balu to grow up into an educated man, graduating from a college and probably going for higher studies to Europe or America….He felt that no expense was too great for a child’s future…

Ø  Today, there are many opportunities for the children to take up different subjects for higher studies and also numerous career opportunities.

Ø  But my take is that parents are deemed lucky if their kids do well in their studies, whatever it may be, and build a successful career on their own.

Ø  No amount of money can get your child a good career or good education. A child’s destiny in doing well in their career is in their own hands.

 

…I think it’s best they are left alone to manage their affairs in their own fashion. I have recently acquired a house in Lawley Extension. I think it best that they move of there.”..

Ø  In India, till recently joint family was very prevalent, with the son’s family lived with their parents.

Ø  In the novel, Margayya wants his son to live separately after his marriage. A very different thought process imagined by the author 66 years ago and what is happening today.

Ø  The reason given by R.K.Narayan – that the young couple wants their own space and wish to manage their own affairs is far ahead of time and relevant today.

Ø  In addition, today, many parents also want their own space and time and wish to stay separate from their kids.

Ø  What a forethought that joint family will give way to nuclear family in India and thought and written 66 years ago…. Wow…

“You know what the market has been!” said Margayya. “This is the time when I wish to attract deposits rather than lend. People have money and are looking for a place to put it.”…

“Are you really serious about depositing your cash with me? I can offer you an interest of 20% on your deposit which you can draw monthly.”… “The banks are offering only three per cent.”  “I’m not concerned with them. I’m not a bank, but I can guarantee you twenty-five per cent.”

“How do you manage it?”

“Well that is my look-out,” Margayya said. “I have a business which yields me more; I have investments which give me probably twenty-five per cent. I keep five per cent and turn over the twenty per cent to the depositor; after all,” he said with a very virtuous look, “I am using your money. Unlike the banks and co-operative societies, I believe you are entitled to the larger share as the owner of money….

Ø  The business of collecting deposits from gullible public is depicted so accurately in the novel, the rationale and the logic presented to the public by such scrupulous finance companies.

Ø  One view is certain – Human greed existed since time immemorial and continues even today and these finance companies play on the human greed.

Ø  Any layman in his normal sense would understand that no finance company can give returns as high as 20% consistently with keeping the principal safe and intact. It is not commercially possible, but sadly, human greed takes over.

Ø  In addition, these finance companies, typically fly-by-night operators, provide amazing and very believable promotion material, explain their business as if such returns are possible with very little risks and public get carried away.

Ø  It is very a simple rule in business – higher the risks, higher the returns….  

Ø  It is amazing that the author thought about such a scenario and created a story line with events which has happened in the past, happening now and will happen in the future… finance companies promising high returns and collect deposits and cheat the public… because the principal is never paid back… How relevant in today’s world.

Ø  To recollect a few examples, where promoters of finance companies came out with very innovative schemes and collected deposits only to fraud the public –

o   Teak and plantation – Anubhav Plantations

o   Benefit fund – Royapettah Benefit Fund

o   Ramesh Cars – promised interest of 30% and also incentive if new depositor is introduced

o   Balu Jewellers

o   Sneham

o   Alwarpet Benefit Fund

Ø  The total amount of fraud is in excess of Rs.1800 cr upto 2000, and would be much more later.  

… On the following month when he went to Margayya’s, the accountant gave him the cash. When he got this interest as a reality, the man was aghast and cried: “That man Margayya is a wizard. How does he manage it?”

Margayya calculated: “If I get twenty thousand rupees deposit each day and pay fifteen in interest, I have still five thousand a day left in my hands as my own….”

Ø  Such finance companies paid interest promptly for the first few months, till the cash cycle was broken and no new deposits were forthcoming…

Ø  Interest for the old depositors is paid out of the cash received from new deposits… what ingenuity….

Ø  The novel captures the action to such precision, as if these promoters read the novel and started their business…!!!

…….“Things are probably not going smoothly there.” He was the first to meet Margayya at his house that morning. “I want to take back my deposit. There is a marriage proposal likely to shape out…”he held out the receipt….”It’s urgent, I’ve to find immediate cash.”

“You have already drawn interest on it?” “Yes…Yes… But I want the principal.”

“Oh yes, certainly,” said Margayya.

….This was the starting point…One after another they came with their receipts. Margayya returned their cash without a murmur. The street became congested with people converging on his house….The accountant was struggling to approach the house in the midst of the crowd…

“My life savings gone! I am a beggar today!” one of them shouted…

They were pulling him here and there…All the cash sacks were empty and slack; yet peeping through the window, Margayya saw seas and seas of human heads stretching to the horizon, human faces at their most terrifying…

There seemed to be only one them for all the cries: “My money! My money gone! All my savings gone….”

Ø  When the cash flow cycle breaks, trouble starts and interest cheque bounces or delays in interest payment.

Ø  Panic sets in and there is a ‘run’ on the finance company.

Ø  Even a large bank like ICICI Bank had a ‘run’ on it in 2008, when panicked depositors thronged the bank in Ahmedabad and other cities and wanted their deposits back. It was so volatile that RBI had to step in and gave assurance to the depositors that their money was safe.

Ø  But for smaller finance companies, such a ‘run’ triggers panic, closure of their offices, promoters run away from the scene and public end up as losers.

….Please send for the police…Hurry up, otherwise they will mob this house: they will kill us,  they will set it on fire….”

…bring a lawyer… I am filing insolvency at once.”

Ø  Insolvency is new to India, but in the novel written 66 years ago, the character files for insolvency…

Ø  Whenever, the finance company collapses, the promoters just vanish leaving the depositors in the lurch devastated and with no way to recover their money…

Part B: The Vendor of Sweets (First published in 1967):

“My son is in America,” he said to a dozen persons every day, puffing with pride on each occasion…when a colourful airmail letter had arrived by post, he had almost felt the same joy as if Mali had come back. The message simply said, “Arrived, New York is big. The buildings are very tall, not like ours. Thousands of motor cars in the street. Food is difficult. I am in a hostel.”……The blue airmail letters grew into a file….

Ø  In this novel, the son of the main character goes to USA and on arrival informs his father in Malgudi by sending an airmail.

Ø  Many letters follow where the son describes USA and the people around.

Ø  Only the medium is different today – airmail has changed to telephone/ mobile

Ø  When going to USA was becoming the norm in mid-1990 in India, in every house, every weekend, the parents wait for the call from their son or daughter in USA. The funniest part is that all the family members wait for their turn to speak to the person in USA.

Ø  And the parents explain about USA, the tall buildings, neat roads, Walmart shopping etc to their relatives and friends, whomever they meet in any functions or wedding.

Ø  However, when every house has someone in USA or other country today, such advertisement talk about USA has come down.  

….Matters became worse when Mali indicated the girl at his side and said, ”This is Grace. We are married. Grace, my dad.” Complete confusion. Married? When were you married? Who is she? Anyway she looks like a chinese….

Jagan said, “I am not doubting her goodness, but I repeat that she is not married to Mali at all.”……”I can’t understand how two young persons can live together like this without being married,” said Jagan….”I feel my home is tainted now…..

Ø  More than 50 years ago, the author had written about marriage to a foreigner, “living together”. Such incidents have become common today.

Ø  In today’s world, love marriage has become very common because of both the boy and the girl being educated, have independence due to their career and take decisions on their own.

Ø  Most of the Parents have started accepting love marriages as reality.

Ø  In USA, the second generation of Indians, who are born and brought up in USA, have started or many years into their professional career, married either to another Indian or American. Today, the talk in USA is “Let them marry any one of their liking, we will be happy if it is of opposite sex and not same sex marriages!!!”

-       Venkatesh