Mar 132017

Following is a piece of letter that I would love to write to the CEO of “Sahar ka Bank”.

My deep-down emotions/grievances are included in brackets.




“Sahar ka Bank”


This is to bring to your kind notice that how good the customer service of your bank has been. I believe your bank churns out good profits every year. And during my recent experience with your bank I have unearthed “the best practice” that you have been following to turn red bottom line to green.

During my college days I was given this Credit Card that carried no charges for the first two years; as a promotion offer. And being an extremely opportunist person (WARNING!!! High Sarcasm Detected) I could not resist that offer.

I got the Credit Card in a few days and along with it came all the “GOOD” things in the world. The card was supposed to carry my photograph, but I think the photo pasting guy at your company did not quite like my face and hence he obliged me with a photo of some random guy. That was quite helpful of him and I offer my heartiest thanks to him (Extreme Sarcasm Alert!). And now since that photo of mine that I had submitted is of no use to the company, can I please get that back. Or may be the photo pasting guy is planning for another photo edit. In that kindly suggest him to pardon my photo.

(The twist in the story goes here) That was the start of really adventurous ride. As a policy of your bank to provide total health comfort, (Wait! This was a bank when I last checked!!!) I was provided with a random health insurance policy. Some 1400 bucks were charged to my account. I think it’s a commitment your bank to care for the health of the customer as well (along with wealth). Very concerned Bank indeed!

Some days later I got a call from some guy telling me about all the good things your bank does. That person also mentioned about the health policy and I, out of my total negligence for health, denied subscribing to the service (WARNING!!! Yeah, again that sarcasm one). It was confirmed on the phone that the policy is reversed. So I was a happy soul. (And equally happy was the bank, as I would later on get to know that the policy still remained in my account)

All during this, I was getting a monthly letter from the bank at my home address. There was a mention of outstanding amount second month onwards. And so my father got worried. I kept convincing him that the amount is wrongly accounted and would be cleared subsequently. (IMPORTANT: Always listen to you father, if you don’t then the following has to follow)

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2-3 months passed. Now as your bank has a very good policy of reminding its customers frequently through letter mails and emails, I was constantly in track of the outstanding amount which remained around 1400 rupees all this while.

So one fine day I wrote to the bank about the policy that I didn’t subscribed to and in plain simple words explained that their business in my college would get seriously affected if they continued to bother about my health (WARNING!!! Yup, sarcasm strikes again). So a cool dude from the other end replied, immediately, that the amount is being reversed. Me a happy soul again and so was your bank. But how?

Your people did a nice trick. They had bundled one more policy along with the health policy and now that policy remained in my account.

I tried reaching to them about the outstanding but after 4-5 transfer of calls I used to end up being ON HOLD. So me being an extremely “kanjoos” guy, stopped trying. As it had already cost me around half the amount that I was supposed to pay and I hoped that one day your bank will realise the mistake and close the account.

Also somewhere during all this I applied for discontinuing the credit card service. Don’t know when, but your bank did listen to me; only after some 100 rupees worth of phone calls were made.

In the meanwhile I lost my wallet during a train travel. So, the card was lost and unfortunately (Yeah that WARNING again!) the card blocked.

So now the story stands at- some 300 outstanding on my card which I lost and got blocked and which I have applied for closing and got to know subsequently that it was closed.

Around 18 months had passed by now since my subscribing to the card and then I met two of my friends who told me about CIBIL. So I got a little worried because you will be sending the “very good credit history” that I have with your bank to CIBIL and  would never mention the “equally good customer service” that you provide. I again spent some money on the phone calls to know the exact details as of date. I was told that some 350 rupees were outstanding. But, thankfully (IMPORTANT- No sarcasm here), the account was finally closed. I was told to pay the outstanding and clear the account.

But you must know have known me; 350 bucks! never! So I inquired further and was told to mail about the issue. I wrote a mail explaining the details. A self-generated mail came saying the good guys would respond in 3 working days. And 3 days hence I got a glossy mail stating that the amount outstanding is on account of a health policy (it was here that I got to about the second policy of the bundle!), some amount was charged for cancelling the earlier health policy and further some amount for interest charges.

So, I replied in “sweet” words that I never wanted the “health benefit” since I am extremely irresponsible towards my health and hence reverse the policy. Now the self- generated mail asked me to wait for 5 days. Five days passed by but no reply came. So, I again mailed with the sweetest words in the world and lo! a reply came on the same day stating that all the amounts have been reversed.

Such a concerned bank for world health! It should get funds from W.H.O. for its support for improving health standards.

BTW, the profit that can be generated though this CSR activity is enormous. So the bank has a potential of churning out around 300-400 bucks from every card holder. If the customer is very “dheeth” then also the bank can gain something by tying up with the telecom company on account of customer care facility which is not toll-free.

So overall even if they manage to convert 10% of around 50 lakh card holders they can easily make 20 crores/year of PBT!!!


Mar 132017

[Disclaimer: This post is not sarcastic]

Owning a house is one of the biggest aspiration of modern families. Its generally an emotional choice rather than an economical or financial choice when one decides to purchase a house.

Buying a house is a life event and generally one of the bucket list of a family. While it’s difficult to quantify the emotional quotient in this decision making, here’s an attempt to evaluate the decision based purely on economics.

Owning vs Renting

Owning vs Renting

The above mathematical exercise clearly puts Renting ahead of Owning for the short term; but then this is based on static assumptions on Interest rate, Inflation, rate of appreciation of House value and also rate of appreciation of money if not invested in House.

The true cost of purchasing a House is actually quite complex, specially in Metros where House means flat in a large complex of flats. See this to understand the true landed cost of a flat.

One important factor which changes this calculation completely is the rate of appreciation of money, if not invested in House vs rate of appreciation of House property. For someone who purchases a House, specially with a Loan there is a good amount of money that gets locked in the House value. However, someone who rents a house has this money available to oneself to invest elsewhere- in a business, stock market, fixed deposit, jewelry etc. The return generated through these investments can be higher or lower vs the return generated in House property. And this is the biggest factor which tilts the decision in favor of Owning or Renting.

If one has ideal money available with no immediate need/want to better utilize elsewhere, buying a House might make sense, while for someone who has little money on hand should rather look to rent. How much ideal money is good enough? Rule of thumb is 25% of House cost.

Even when someone has money on hand, it might not make sense to purchase House; if he/she has a better opportunity to invest the money- for example in a business idea or to fund World Trip (generating emotional returns which can far out weigh any financial return)

Apart from these economic factors, here are some of the qualitative factors to consider for this decision making-

  • Permanent vs Temporary stay in a city- Depending on one’s job/business profile, living in a particular city may be a permanent option (atleast 10 years or more) or temporary one (say change of city/location every 3-5 years). So purchasing a house where one is not going to live forever is not a wise choice, given that the hassle of giving it out on rent are many.
  • Life Stage: Purchasing a house make sense for a family, rarely it does for bachelors. Since as bachelors there are much cheaper options available for stay- like PG, sharing flat with friends etc.

To summarize the choice of Owning or Renting is more a Social Science decision than an Economics one!

 Posted by at 12:07 am
Feb 192017

[Disclaimer: This post is not sarcastic]

Buying a house is one of the critical milestone of an Indian family. However, unlike packaged items having MRP printed on them, the real cost of a house is not as straight forward. More so in Metros, where one is buying a flat rather than a standalone house.

So, what is the real cost of a house or flat? 

Typically house or flats are advertised for sale at per square rate (psf). However, this is not the total cost of the flat. There multiple other cost components that get added on top of it.

Here’s an example:

Landed Cost of a House

Landed Cost of a House

As you can see a flat advertised at the price of Rs 50 Lakh (Rs 5000/sqft X 1000 sqft) actually costs more than 20% higher at Rs 62 Lakh. If the flat is purchased by availing loan then the Landed cost of flat further goes up as one needs to pay additional interest on the loan amount.

Another important factor that people discover later is that the psf rate is charged on something called “Super Built up” area, which is higher than the actual area of the flat (carpet area) by 20-30%, sometimes even 40-50%.

This doesn’t include additional recurring costs like maintenance charge (levied by Societies for upkeep of common amenities in the society), property tax, home/fire insurance etc.

PS- if you dont like serious stuff, enjoy this-

 Posted by at 12:38 am
Feb 052017

StressStress is one of the most common perils of working in a corporate environment these days. While the term “stress” has a negative connotation; in corporate environment, it can denote positive as well as negative emotion. However, the general feeling, always, is to consider it to be a bad thing.

Being under stress, or more appropriately being “stretched” is actually a sign of optimum utilization of resource- the employee/worker. Given the size of workforce in companies and the complexity of jobs, it is easy for workers to “freeload”. Hence, stress is important to take the most out of the human resources. However, it is important to provide the right environment to workers so that the input of stress results in an output useful for the company as well as the individual.

Generally, when people talk about stress at work, which is bothering them; they are actually talking about the negative stress. This happens when a worker is loaded with work but not given enough power or control. Without the right quantum of control, the worker wouldn’t “own” the job; but would rather treat it as a task to be completed.

Stress is “good” when it is accompanied with “ownership”. With ownership comes engagement to the task which generates “positive stress”; which actually comes from within rather than outside. A worker might actually work for more hours, with more dedication and might appear more stressed; but would be more satisfied and deliver better in this scenario.

As leaders and managers of people, it is important to understand this difference between positive and negative stress. Loading your subordinates with tasks can only deliver results but with increased stress. Loading subordinates with power/control results in ownership, better results and positive stress.


See this for “What every manager does”:What a mgr does


 Posted by at 2:45 pm