Bash the Bankers !

Until about 1.5 years back, Investment banker was one of the hottest and wealthiest job anyone could ever have. It was the ‘Angelina Jolie’ of all campus placements. But today, if there is one profession you want to bash and kick at and get an applaud – just lash out at any top executive employed with one of the global financial institutes or banks.

And of course our hope president Obama is not going to fall back. So he has lashed out at the bonuses declared by the banking institutions and asked them to pay up first before throwing away all the bonuses and has declared a $ 117Bn levy recovery plan over the next 10 years. In what I think is one of the most logical decisions made by the government, he has rightly decided to bash the big guys with more than 50bn worth and that too as a tax on all ‘wholesale finance’ and not the retail deposits and equity capital. So banks dependent on retail public deposits are relatively better off, but bad news for the likes of Goldman Sachs.

But what puzzles me is, is all this really required? Was the bailout money just thrown away at these people while they were out with the begging bowl without a fixed plan to recover every penny of the taxpayers money back? Or more importantly, are the top financial institutions still so greedy and shameless that they have absolute no moral responsibility of taking things easy for about 2 years until they have paid back what they owe to the world(World because when these guys decide to go down, they don’t go down alone. They take the entire world with them). It is like your house catches a fire, you don’t have money to rebuild it and the local sheriff convinces the neighboring community to help you out. You rebuild the house and in 6 months buy a new porche before paying your neighbors back.

So instead of saying – ok, we messed up, thank you taxpayers for bailing us out & we will not take a bonus and get things back on track, you take a big perk and flaunt it shamelessly. Banking institutions seem to be moving towards a role of milking the economy rather than serving the economy. Does this not expose the cultural degrade due to hard core capitalism.

India has a relatively closed banking and financial system that kept it that much insulated from the global crisis. But the big question is, I don’t know if it will happen, but if we are talking about India becoming a developed super power – do we become an easternized- eastern super power or a westernized eastern super power. So will we be able to keep the advantages that our culture has ingrained in us-  for e.g. the attitude of saving, or will we adopt the mistakes of the west as well while moving ahead. Imagine a bank employee from India and I am sure for most who have visited the bank at times, the image would be an honest and sincere middle aged employee who counts the notes for you and hands them over with a smile. I am not aiming at keeping things primitive, but the important point here is – ‘honest and sincere’, not over smart and sly. I hope we retain that always.

A closed banking system will give rise to more number of alternative finance institutions which would then pressurize the government into securitizing their mortgage products. And though it may seem far off, we know what can happen with our government policy decisions. And a completely open will inflate the bubble again. Hopefully, we can hang on to that golden mid way somewhere.

Lets hope when its our turn to dictate the world, we become a socially, morally and culturally responsible capitalist giant. Fearlessly smart and aggressively good !

The Start Up Visa !

Its 2010 and as we step into the next decade, Business and Technology remain the scale of measuring the overall strength of any country. Though jaw-dropping start ups keep coming forward from the dorm rooms and garages of the Silicon Valley, investors in US are worried that the government is not doing enough to entice entrepreneurs to stay.

So the US congress is now considering what can be called as a ‘start-up Visa’. A visa for foreign born “techies” who have good ideas, so that they can stay ‘in’ US and continue working on them. This is especially valid for foreign students who drop out of school to found their own companies. It is particularly hard for them to get visas and continue in the valley, and US is aware of its losing ground if it doesn’t encourage smart brains from India and China to stay within.

The visa also aims at attracting foreign capital. So if your business plan is good enough to attract $250,000 through Venture Capital or $100,000 as angel funding, or shows prospects of creating 5-10 jobs and around $1Mn in revenue, then you are eligible and up for the visa. Such visas are already in place in Canada, UK and Australia and US knows the importance of funding the founders if it does not want to give away any advantage to one of these. So if and when this happens, you can stay in US and continue with your company just based on your ‘potential idea’ – even if you choose not to be a student or work for anyone else !

But the point to ponder upon is, if US, with all that it is, is thinking so seriously and taking steps to attract talent, imagine what steps India is going to have to take to at least nurture entrepreneurs if not becomes the hotbed for technology and entrepreneurship that we all would love to bask in.

According to Dr Venkatraman, Indian born US based 2009-Nobel Prize winner, if India does not invest in the facilities that support long term research now, it is going to find itself 10-20 years behind in harnessing technology for better benefits.

We have one of the most, if not the most, competitive educational systems in the world. But it is also true that most of the smart brains are showing all their competitive spirit in India and Creativity outside it!

There is indeed a lot of activity going on in the start up incubators in India. Loads of VC funding and a build up of an entrepreneurial ecosystem with foundations like NEN, but we seem to miss godfathers like Andy Bechtolsheim and Mike Markkula coming ahead to mentor the Google’s or Apple’s of tomorrow.

With the Indian population all set to hit 1.5 Bn by 2020, the Indian market and economy is essentially going to piggyback on the ability of future job creators. The ecomonic reforms from 1991 have provided the fuel for entrepreneurs to pick themselves up without licensing hassles and red tape , now it is the turn for our educational reforms to pick up soon enough to catapault innovation and R&D. Are outdated rotten courses going to make way for a fast changing and flexible course systems that incorporate iphone and Android apps on the go ?