Its just another brush with the corrupt Indian system and I am really sorry if I sound pessimist or negative and I promise I will not reiterate the bloody "Lets change the system and disallow the Chalta Hai attitude" kind of punch lines, I am sick of it and this is not going to change.
Here is the summary:
1. There is a Govt. policy called TUFs, which gives subsidies loan to entrepreneurs who wants to start something which involved up gradation of technology in Apparel industry.
2. I planned an Embroidery Unit recently and I applied for a loan of Rs. 1000000.
3. The Govt. Subsidy would have saved me around 1.5 lac at the successful completion of the project.
4. I applied for a loan, which required something to mortgage.
5. I booked the order with a Chinese company and also started my funding preparations assuming everything going to be well & OK.
Bloody, I again forgot that I live in India. The bank officials after taking much time informed me that the mortgage I am providing is not enough as per their valuation so instead I need to put a fixed deposit of 50% of the actual loan amount with them and then they will process the application. The machines arrived on Mumbai port and the pressure was mounting up, I arranged the money somehow and after killing some more time they replied it’s not enough, since there are many cases of defaults and other lame excuses. They now wants a 100% fixed deposit of the actual loan amount I need [it’s not a joke, its true], the demurrage at port was mounting, my machine vendor was threatening of cancelling the order and eating up the advances I paid. I ended up at the doors of local money lenders, now the things are settled but I have spent more then the subsidy I am going to get out of this Loan.
So where I went wrong....
Actually, there are so many touts masquerading as CA's and Financial Consultants. They work as an agent for the bank and its managers and they charge a fix percentage of the loan you require for these kinds of schemes and this share goes to the whole system, from topmost Officials/Politicians to the bottom of the line. In my case had I paid a 7% of the total loan as fee [Rs.70000] to the agent, my home would have valued at whatever they want and the loan would have been sanctioned and this Rs.70000 would have been shared by the whole system.
As I was coming out of the bank manager's room, he said," Mr.Gandhi, I appreciate your efforts and entrepreneurs like you are the need of the hour for our economy". I smiled and said Entrepreneur, My Foot.
Here is the summary:
1. There is a Govt. policy called TUFs, which gives subsidies loan to entrepreneurs who wants to start something which involved up gradation of technology in Apparel industry.
2. I planned an Embroidery Unit recently and I applied for a loan of Rs. 1000000.
3. The Govt. Subsidy would have saved me around 1.5 lac at the successful completion of the project.
4. I applied for a loan, which required something to mortgage.
5. I booked the order with a Chinese company and also started my funding preparations assuming everything going to be well & OK.
Bloody, I again forgot that I live in India. The bank officials after taking much time informed me that the mortgage I am providing is not enough as per their valuation so instead I need to put a fixed deposit of 50% of the actual loan amount with them and then they will process the application. The machines arrived on Mumbai port and the pressure was mounting up, I arranged the money somehow and after killing some more time they replied it’s not enough, since there are many cases of defaults and other lame excuses. They now wants a 100% fixed deposit of the actual loan amount I need [it’s not a joke, its true], the demurrage at port was mounting, my machine vendor was threatening of cancelling the order and eating up the advances I paid. I ended up at the doors of local money lenders, now the things are settled but I have spent more then the subsidy I am going to get out of this Loan.
So where I went wrong....
Actually, there are so many touts masquerading as CA's and Financial Consultants. They work as an agent for the bank and its managers and they charge a fix percentage of the loan you require for these kinds of schemes and this share goes to the whole system, from topmost Officials/Politicians to the bottom of the line. In my case had I paid a 7% of the total loan as fee [Rs.70000] to the agent, my home would have valued at whatever they want and the loan would have been sanctioned and this Rs.70000 would have been shared by the whole system.
As I was coming out of the bank manager's room, he said," Mr.Gandhi, I appreciate your efforts and entrepreneurs like you are the need of the hour for our economy". I smiled and said Entrepreneur, My Foot.
