When I say banking, I mean banking, broking, mutual funds, insurance, software companies in the BFSI space. So let us revisit the laws:

1. Golden Rule of Life: He who has the gold makes the rules. If your name is Diamond, even better.

2. Salaries are NOT decided by demand and supply: It is almost impossible to know who will be good, better or best. So how will you know the difference between Sachin Tendulkar and Vinod Kambli? So you pay everybody very well. Competence ensures permanent pay, big screw ups at an early stage can finish your career. Be careful. If your assistant screws up, you will remain employable. If your boss screws up, it better be very, very big time. The bank will go down, but you will be seen as a victim.

3. The bigger the Institute, the higher the starting salary. You need to be terribly incompetent to interrupt the smooth ride. So if your Dad can afford it, do your MBA from as big an institute as possible. In a worst case scenario do an E-MBA – now the IIMs also have it. Casually you can saw…when I was in Ahmedabad…after all it takes only 15 days to understand the whole campus, right?

4. A perceived shortage of the ‘right’ sort of a person can be created very well, so salary will be topped with nice bonuses. Anything from playing golf, wine making, weekend farming, cycling, running, can be a qualification. After all business is about relationships and not excel sheets and irr.

5. The business is so sexy that every business house would want to be in this BFSI space. The more stupid, the higher the salary. The most cruel, criminal guy will reach the highest post. In Indian conditions you should have a fantastic ability to mis-sell and create a team that can also do the same. Words like training, compliance, internal audit, should irritate, not intimidate.

6. Banking products are so simple that everybody can enter this business. You consistently make money for your unit holders AND shareholders, only if your surname is Parekh. Of course every body who makes idli, dosa, steel, aluminium, cars enters this business.

7. The more the banks try to distinguish their product, the more the regulator should be worried. At heart all products are lending products or borrowing products. 200 varieties are created so that they can excite the customer. Remember all banks are the same. You need to go there with a gun so that they do not sell some toxic product. We are in the process of anti toxins mask.

8. The customer is the most useful person in the whole link. The banks need to suck so much out of him so that they can get all those bonuses. And once in a while if they are caught pay those billion dollar fines.

9. The regulator recruits from the same sector.  So the regulator who is supposed to look different speaks the same language. Because of all the incest between the banks and the regulator, the customer becomes the appendage. For the end customer knowing the difference between the regulator and others is well high impossible. Alas.

10. Profits happen because of bankers brilliance. Losses because of the overall business environment.

11. Rules are meant to be broken. If you break the rules and make profits, take a big bonus. If you make a loss, take a SMALLER bonus and the shareholder will suffer the loss. If the loss is super huge, the government will bear the loss. Awesome combination of  Capitalism and Socialism.

12. There is nothing like too big to fail, but yes some banks will get so big that they do not care to obey. The ‘governing’ bank be damned.

13. When you see a young banker do something brilliant, ignore it. One day he will shine like a Diamond.

14. If there is a successful banker, read Nassim Taleb’s book and remember we underplay the role of luck. He was lucky not to have got caught.

15. It requires 4 people with an IQ of 175+ and 4996 others with an IQ less than 75 to run a bank. If you have more people in the former category, you ‘try’ new things and get caught.

A new set of rules a little later on please!!

Further rules will be made later….

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  1. LOL 🙂 That’s an wonderful compilation 🙂 Alas, not many ppl noticed, when we were on the path to here. It’s only now after we have reached here, that some ppl talk about it.

    After all only few years back we use to celebrate the kind of placement salary our kids from IIX’s, used to get to work for these same institutions. isn’t it ? That time the feeling was, these kids deserve it for having 175+ IQ.

    Regards

  2. of course people noticed. List me financial service companies that have made MONEY for the shareholder on a consistent basis in India. Other than Hdfc, NONE. And u can continue to celebrate as long as the salary is being paid, right? They do not owe ME an explanation..their MONEY does not argue with them…yes they need to live on little…what if they get caught. That is all.

  3. Dr M Chandrashekhar

    Nice one, Subra. Very true. I laughed my guts out. You seem to have the same corny & skewy sense of humour like me !!

  4. what a critique on BFSI world and so true it is..

    have witnessed father working in bank for many years now and can relate to it closely..

  5. Subra,

    I always felt sorry for myself – coz I just don’t understand finance – or anything that has excel sheet with numbers on it. So jobs in banks with big bucks would never happen to me. But I always had middle class values. I knew inflation, lifestyle and cost of living. I scrimped and saved like hell. But then – I laugh all the way to the bank! ( Yeah – cant live with them can’t live without them!

  6. Good one, this is a known factor, we see problems in every field of life, no one is giving solution. I have started putting my money in liquid funds for the last 3yrs, so bank doesnot earn out of my money.

  7. Point 7 always happens. But there is a guru mantra to escape “products’ – mention the S word and the RM runs away. I suggest we have Subra photos framed outside houses like vaccine camps. RMs know these people have been ‘inoculated’ and are now immune to ‘products’. Less stress for both sides.

  8. We sure live in a crazy world… I liked the argument and counter argument.

    Argument – “The Goldman Four were unsupervised, inexperienced, incompetent and lazy investment bankers who were put on a transaction that in the scheme of things was small potatoes for Goldman.”
    and counter
    “Goldman Sachs was retained as a financial adviser by Dragon Systems, not its shareholders, and performed its assignment satisfactorily in all respects.”

    talk of self praise…

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