Recently, in the space of just a few weeks, in terms of one of our local commercial banks, I went from persona non grata (“an unacceptable or unwelcome person”, according to my computer’s dictionary) to, suddenly, persona grata.
The transition left me speechless, and even writing this column I struggle to find the words to thank it for my reacceptance into its monied halls.
As a person who has dealt with probably all, or at least most, of the commercial banks operating here over many years, and who has good friends and colleagues in all of them, not to mention continuing business relationships with some of them, I won’t mention any names, but I felt that I should note my new status and mine it for meaning, if you like.
The irony is that the transition was made by the marketing needs of the bank, which suddenly became oblivious to the very reasons (whatever they were) it had treated me so shabbily just weeks before.
Now, let it be clear I assigned the term “persona non grata” to myself and the bank was officially horrified that I would say that is how I felt as a result of their handling of my business account.
Regulations
It was nothing of the sort, they said. It was just that today there are so many regulations they have to meet, they said.
What happened was this: at certain times of the year my company, like many others, depending on which sector they are in, goes through a lean time for a few months. We usually end up a few thousand dollars in unofficial overdraft for a few weeks, so I was advised – by the bank itself – to get an overdraft facility even though I would not need it for most of the year, as the interest rate would be “much lower”.
Much cheaper, I was told, than this unofficial de facto borrowing for which you are charged a fine of $25 or $50 bucks and interest higher than a credit card.
So I agreed, and then began the process of applying for said overdraft. As usual, it was as if the bank had never heard of me or my company. Anyway, we ploughed through, and I was told the thing would be up in a few days.
That wasn’t to be. It turned out you had to have a credit balance on your account before you would be allowed to go into the overdraft, so I had to keep finding money to top up the account. Now, it occurred to me that the whole reason for getting the overdraft was that the account was already in the red and I wanted them to let it stay that way for a few weeks, but the logic of this did not register with my bankers.
In the end I got myself out of overdraft earlier than expected, so I did not need it anymore.
It was like going to the doctor for some medicine for a cold only to have it dangled in front of your runny nose and being told, “Okay, you’ll get some as soon as you stop sneezing.”
Patient, heal thyself. I did.
So you can imagine my shock when I got a call a couple of weeks ago from someone at the regional office of said bank offering me ten grand for whatever I wanted, no strings attached – no collateral needed, no lotta long talk, just say yes and you’re in! Perhaps you would like to go on a much-needed holiday, it was suggested; or maybe you want to do some renovations around the house; or maybe pay off some debt.
When I said no thanks to all of the above, the tone suddenly grew slightly more ominous. Well, what about this credit card debt you have here with us? Maybe you would like to use the money to pay it down? Remember, it would be at a lower interest rate than your credit card is on right now.
Here was a bank with my credit card account staring them in the face offering me ten thousand dollars to go toddling off on holiday, without a care in the world for paying off said card faster than the regular schedule. Then when that didn’t work, it wanted me to take the dough and spend it on renovations. Only after that one also fell through did they notice my credit card.
See, all this just confirms to me that our total banking system is completely useless in helping our developmental needs, as entrepreneurs, as companies, as a nation.
It is more like we have a few very rich uncles living in the neighborhood who will lend us money when it suits them, or when you already have more than you need. I am glad for these rich uncles but I also understand that they often don’t fit with our financial needs as individuals.
Only when we show signs of getting by without them do they come over and wave a bit of dinero in our faces as if to say, “Don’t you want me, baby?” And we usually reach out and take it, thus remaining forever in their grip.
Let me ask you something, before I close: if you had, say, $80 000 in debts (you know, hire purchase, a few small bank loans, a car loan and so on) and you won $100 000 in the lottery, what would you do?
• Would you bank it at two to three per cent interest and continue to pay down your debts at, say, 12 to 15 per cent?
• Would you invest it in a business in the hope of doubling it in a few years but take the risk of losing it all?
• Would you just spend it on bling, vacations, fine dining and, say, a new room for your house?
• Or would you pay off that $80 000 in debt and prudently bank the other $20 000?
For me the right answer is the last one, unless I was having no trouble meeting all of the loan payments and just wanted to keep the $100 000 on deposit as stand-by in case of some emergency (good luck with that, though).
Banks, however, would prefer you to do any of the above except the last one. But the rich uncles must also be able to dictate the terms and keep you begging and hanging on for as long as they feel like. Until they change their minds. And that usually occurs when they have too much inventory.
Then they cry, hey, you lucky devil, “come and get some while it lasts”.
Thanks, but I think I will pass.
