CHAK DE INDIA !
If you wanted proof that India will be the country to watch in this century look no further than what the Federal Reserve Bank of the US is doing these days.
You may not believe it but it is doing exactly what the Indian Finance Minister did in his budget just last week.
We know that the US economy has been sent into a tailspin by a few factors of which one is the so called sub-prime crisis. What really happened was that like bankers in India in the hoary and infamous days of Janardhan Pujari , US banks went on a ‘loan mela’ and handed over hundreds of billions of dollars to buy homes to thousands who just were nor creditworthy.
In the amazing system of securitization that exits in the US, papers were raised on the basis of these loans and these papers were sold and resold many times in an elaborate web the dimensions of which nobody is clear about. When the borrowers could not repay their loans banks were saddled with billions of dollars of bad debts. This started off the very real prospect of major banks going bankrupt and of a recessions that is sending shock waves across the country.
Just when the American financial geniuses were wondering what to do came reports of the Indian FM’s creative approach to India’s crisis of poor farmers being unable to repay their loans. With this very real problem at hand and with both his eyes on the forthcoming elections the FM announced a write–off of these loans that may amount to about RS. 60000 crores! The stock markets in India did not take kindly to this and went into a tizzy. Pandits criticized this move as another ‘ loan mela’ . The FM has not told us how he will compensate banks for their losses but we can be sure that Indian creativity will be on show.
What is interesting is that in the US the Fed is doing exactly what our FM has done .The Fed has announced that it will give U.S banks $200 billion against the housing securities which the banks could not dispose off—they are probably worth little! Unlike Dalal Street , Wall Street welcomed this move and values have shot up proving that they are streets ahead!.
Is it time to announce to the world that India financial pandits will show the way to the rest of the world? Maybe it is too early but we have made a start. The man who has been appointed CEO and will take Citibank out of the woods of the sub-prime crisis is an Indian financial pandit .
His name– Vikram Pandit!

K.R.RAVI
USA