A layman’s lament - Sudhanshu Mohanty

A layman’s lament

Banks charge us for insufficient funds in our accounts, then why can’t we charge them for insufficient cash?

Written by Sudhanshu Mohanty |

India is in monetary turmoil, post the 8/11 demonetisation. The turmoil is pandemic, as serpentine queues snaking across ATMs and banks refuse to go away. The banks are helpless; the new currency bills are available only in dribbles. Everyone is affected — the informal sector perhaps more so than others; the poor citizen has taken the bullet on his chest. I am no economist and have no pretensions to being one. All I know is that economists’ analyses, with multiple variables bristling, can — and often — go awry. But the present crisis mercifully pretends to no such profound economic analysis. It is the banality of common sense; and this is something that’s evaporated post-demonetisation. How fair is it for the government to dish out the kind of treatment meted out to the common man with the lack of cash in banks? When I need my hard earned money in cash, I am denied and at best given a pittance of what I asked for. I am denied my right. It’s a failing of a contractual term. What’s the compensation I get in turn? Zilch. Banks charge us for insufficient funds in our accounts, then why can’t I charge them for insufficient cash?

It’s like a reverse liquidated damage (LD) that a buyer need to pay the vendor for delay on his part in any acts of commission contracted upon. Early this year, when I worked in the ministry of defence, this concept was being thought about during the elaborate discussions while constructing the provisions of the Defence Procurement Procedure 2016. Eventually, given the imponderables (how facile the English language is to mask the real and pretend the surreal) in government, the idea was dropped. Not to forget that there would likely be a posthumous uproar over such payments and the inevitable hauling over the coal years after, when the going gets nasty. It would’ve been interesting to see the behemoth move a bit laterally and a few notches vertically.

 In a market economy, getting on the fast lane and transmogrifying into a market society (recall concierge doctors and ticket scalpers in the US) when, in fairness, it should be a level-playing field, contractual obligations as fiduciary need be based on equality. Funds are the heart of banking. Less funds in your account (save the zero-balance account) attracts a penalty, which we pay ungrudgingly. The same, naturally, should hold good for banks as well. If the Banking Regulation Act, 1949 needs amending, so be it.

I’m aware it’s rather hard to conceive, let alone think of executing, and implementing the roadmap. My idea, though, is simple: The market economy is laissez-faire and is driven by market forces of supply and demand, it can’t be iniquitous to either contracting party. The same spirit should animate the construct. Also, I’m fully conscious of the difficulties in selling this idea because we still treat government organisations with undeserved awe, as though they are beyond failing, and hence above reproach. More so, when they are sanctified by the past, better still the colonial one. Look at the judiciary as an example. They have latched on to a hoary, medieval colonial past, still persisting with an antediluvian contempt of court law that even the conservative, hidebound Brits have long discarded. We are a patient nation that tolerates everything: Inactivity, the pachyderm rock and roll, even plain inaction. Nothing moves us notwithstanding the elephants already stalking our rooms.

Yet, while on this pesky polarised issue, paradoxical as it may sound, the efforts to ring in a cashless society — more appropriately a less-cash society — should go on. It’s time the government becomes the bellwether of change in sync with the time and zeitgeist. Equality is at the heart. It’s the political will (read PMO’s will) that matters. But, we need to go beyond this demonetisation din. How else do we ring in changes — a new piecemeal social re-engineering crying out for quick remediation — that’s crucial to a nation which sends out daily macho incantations of dominating the world economy in the imminent future?

The narrative needs backing by seamless change. You don’t foist a cashless society overnight from the top. It needs a certain level of literacy and infrastructure, cyber security and such other nitty-gritty, for Digital India. The US hasn’t done it yet. But our bluster says: So what? We can. Ramming precepts down people’s throat don’t help in bringing about socio-economic changes. The government — the most powerful driver of social change — needs to appreciate that changes are best done with pain that is ephemeral and doesn’t scorch. A learning curve with the aam aadmi made the guinea pig is not the way to go. The pain is excruciating. Worse, who dare predict things in an economy touted as emerging, yet, with — remember our bespoke variable called nepotism — a firm legacy of the feudal past?

Though an ignoramus, I know that economics is no physical science; no economist worth his salt would dare predict the future the way it’s being bandied about — 50-day pain, the last queue to end all queues, cashless society — all wrapped in divine certitude. Yet, few things are clear: The need to change processes; to ensure level play and fair play; openness and transparency; the need to catch the big fish and spare the small from (obse)queued decimation; more action and less grandstanding. Also, no bluster — tall and majestic in sweep — that lacks the gravitas expected of utterances from high perches. I’m baffled by the goings-on. One’s idea was not to paint a picture of unrelieved pessimism. But I can’t see this charade and declamations stopping. I say this neither sinisterly nor maliciously. Dystopian thoughts, not that too. I’m an incorrigibly cosmic optimist. Maybe you can glimpse a utopia in this dystopia, but sadly I can’t.

The writer retired as financial advisor (defence services) in the ministry of defence. Views are personal