Data for your lender

You get a second reminder from your bank’s RM (Relationship Manager) to submit the data. You are enjoying either a term loan or working capital (CC) limit from the bank. You are told by someone or you feel that the bank asks too many details. And you ignore it for some time and after the third reminder you send incomplete data. And somehow the event has passed and things move on. 

Then one fine day, there arises a very urgent need of a BG for a new tender / work order. And you have come to know about the deadline bit late and the last date for submission is a week away. Your banking/accounts team informs you that the CC limit is falling short by some amount. And then you talk with the bank for enhancement in the limit.

And by procedure, the bank needs some additional details. This time you furnish the same in time (as you have a purpose in mind). You expect the bank to respond equally promptly and all you get is assurances and apologies.

Then on the last day of submission of the tender (and BG along with it) you get another letter/email from the bank asking for more information. Not the BG.

So you either end up fighting for the issue or you plan to change the bank. 

You talk with ten other people about how useless the bank is. Seldom do you realise that if you can be relaxed about furnishing data to your bank (the lender) why can’t the bank be equally relaxed about responding to your needs. 

Yes, it is in human nature to perceive the same situation in different manner depending on which side of the table you are. We are not saying that by being prompt in furnishing the data, you would sure get what you need from the bank.

But what we are trying to highlight is that if we inculcate the habit and prepare our mindset to furnish data on time, we end up maintaining an up to date record of granular data. This in turn is going to help us and our business decision making. 

We need to forget that the data is for the bank. It is for us. For our own good. The bank, as an outsider who has lent you money, has a very simple but effective way of monitoring your business. These methods and checklists have evolved over centuries of banking industry experiences. 

If as an outsider they can effectively monitor your business with an eye on their own money coming back, why the same methods can’t be used by you to monitor your own business. 

That means, even if you don’t have a need for money, and still you go ahead and borrow a token amount from the lender, you end up getting your business, processes, information assessed by a very knowledgeable and experienced third party – at virtually no extra cost !

We have met promoters who came to know many nuances of their customer contract or legal title of their own plant & machinery or shortfall in the cash-flow – only from their lenders.

Their own accountant (either in-house or outsider) never found out or highlighted it to the promoters. 

So whom you see as your enemy (a lender asking more data) may in fact be a long term friend.

And whom you find as your friend (a scrupulous accountant hiding information or tax consultant helping you save tax) may in fact turn out a enemy (when a key hole in cash-flows is unearthed or when you receive a IT notice after few years). 

Back to basics – if someone has given you money you owe your trust (in every action and intent) to him.

If someone is suggesting a shortcut – small benefit,risk for you in the long run and a profit for the same adviser.