Remembering Shri Atma Ram and His Risk Management
By Dinesh K Kapila
Sitting around and reading up a bit, the mind wandered to Shri Atma Ram. Suddenly. It just went off on a tangent. Theoretically, when we debate Financial Inclusion we discuss financial literacy, savings, credit, awareness about terms and conditions, insurance, pensions and government schemes. Then of course is the ritual pontificating on Going Digital and availability of infrastructure, accessibility of payment channels, affordability, awareness and transforming consumer behaviour etc.
As the nation develops, the mode and nature of financial literacy also changes. It can be region specific and could be profiled on the socio economic status too. The process is inherently dynamic and has to be targeted astutely. And in due course as we develop even more and incomes and financial literacy increase, financial literacy would hopefully include Mutual Funds, ULIPS, The National Pension Scheme etc. I would support these products any day rather than read about the public losing hard earned money to misguided Deposits with chit Funds, varied forestry cum financial schemes or placing major deposits with jewellers. Of course if it is a conscious decision, then one has to live with the consequences either way.
Now we come to Atma Ram. My theoretical introduction was purely a prelude and the build up plus to prove I do know the basics to some extent. Plus you could get surprised anywhere and anytime. Do read on.
I was with two colleagues and a couple of local bankers and the NGO partner agency. This was at Hisar, and we were interacting with a broad cross section of farmers. In this process we went on to meet Sh Atma Ram at his village. Around 15 to 20 kilometres from the city. He is a tall, gaunt looking progressive and very aware farmer and straight away led us to his sitting area at his house. With great courtesy. We sat around discussing the diversification in cropping pattern and increase in incomes and his individual experience. And how much financial literacy had developed in rural areas etc and in Hisar and at his village. He was sitting on the bed, me on the chair. And drinking sweet tea. We were getting along really fine and I was absolutely enjoying the interaction, like when I asked him from where he acquired his knowledge and inputs, he said matter of factly, see the PC in that corner and the broadband cable, well it works and the internet is for me too plus I earn enough to travel and move around! Then one of the bankers said to me that he was not availing credit, in fact hardly any credit was availed for his production cycle and he refused to even have a Kisan Credit Card. Now I had to satisfy my curiosity and jokingly asked with him about it.
The answer came as follows from him, first qualifying he was a down to earth farmer and went by his own instinct and judgement. He explained that it was his nature to always and consistently judge the actual cost and benefits and to assess who gained or lost from a financial transaction. Be it even with a bank. Therefore why would he borrow or have a KCC when he had enough financial resources to do so. Unless he had to buy farm equipment or invest on capital assets on his farm, he was not interested in credit at all. Interested, I thought it was only logical to know his investment theory too.
His investment cum risk management theory was certainly an eye opener. My friend very seriously explained he did not have a large corpus in reality but all the same he divided his surplus funds into ten parts. And he reviewed his investments and returns every fifteen days and sometimes weekly. He would change the quantum of investments at the review if really required, but normally any major change was after a few months. Not for him any product such as a mutual fund, he said it was too abstract and the concept of share markets as it is was beyond his understanding. He said he remained grounded in his world and simply targeted a return at 5 % minimum over the local bank rates and was highly satisfied now with the benchmark he had fixed. He earned more than his internal benchmark consistently. This encouraged him. Now the practice.
Two parts (of the ten parts) went to Fixed Deposits with Banks as he gained here and it was safe and he was not taxed anyway. And he switched Deposits between Banks too as interest rates changed. Two parts then went to Deposits with Arhtiyas (commission agents) for onlending and to obtain higher yields. He knew the commission members well and was integrated socially as an equal with them. So misgivings were minimal. Two parts went to relations and very close friends, they had to pay interest that was more than the bank rates but less than that of the commission agent. Two parts went to businessmen or local financiers, may not be trustworthy but would pay up based on their track record. Plus it was only for a short while. Then he shifted this particular two parts, if no opportunity to deploy was there, to the local post office savings account too. Or the post office deposits. Lastly, two parts went to those individuals, who even if they defaulted or were unable to repay the principal in time, would be honour bound and honest to keep paying interest. Plus they would pay up in any case in due course. Here he charged a higher interest rate too. Plus this was not an absolute rule and the degree of accuracy as regards two parts for each investment sector could change somewhat. He also met everyone he loaned too regularly on his normal rounds. Not specially so. And he emphasised laconically, straight faced, that he slept very peacefully every night to boot!
Well this was a solid grounding cum learning for me alright. I gained myself financial literacy and an insight sitting by Shri Atma Ram in his sitting area that day. Certainly. And I surely came away very Impressed. Really.
———-
By Dinesh K Kapila
Sitting around and reading up a bit, the mind wandered to Shri Atma Ram. Suddenly. It just went off on a tangent. Theoretically, when we debate Financial Inclusion we discuss financial literacy, savings, credit, awareness about terms and conditions, insurance, pensions and government schemes. Then of course is the ritual pontificating on Going Digital and availability of infrastructure, accessibility of payment channels, affordability, awareness and transforming consumer behaviour etc.
As the nation develops, the mode and nature of financial literacy also changes. It can be region specific and could be profiled on the socio economic status too. The process is inherently dynamic and has to be targeted astutely. And in due course as we develop even more and incomes and financial literacy increase, financial literacy would hopefully include Mutual Funds, ULIPS, The National Pension Scheme etc. I would support these products any day rather than read about the public losing hard earned money to misguided Deposits with chit Funds, varied forestry cum financial schemes or placing major deposits with jewellers. Of course if it is a conscious decision, then one has to live with the consequences either way.
Now we come to Atma Ram. My theoretical introduction was purely a prelude and the build up plus to prove I do know the basics to some extent. Plus you could get surprised anywhere and anytime. Do read on.
I was with two colleagues and a couple of local bankers and the NGO partner agency. This was at Hisar, and we were interacting with a broad cross section of farmers. In this process we went on to meet Sh Atma Ram at his village. Around 15 to 20 kilometres from the city. He is a tall, gaunt looking progressive and very aware farmer and straight away led us to his sitting area at his house. With great courtesy. We sat around discussing the diversification in cropping pattern and increase in incomes and his individual experience. And how much financial literacy had developed in rural areas etc and in Hisar and at his village. He was sitting on the bed, me on the chair. And drinking sweet tea. We were getting along really fine and I was absolutely enjoying the interaction, like when I asked him from where he acquired his knowledge and inputs, he said matter of factly, see the PC in that corner and the broadband cable, well it works and the internet is for me too plus I earn enough to travel and move around! Then one of the bankers said to me that he was not availing credit, in fact hardly any credit was availed for his production cycle and he refused to even have a Kisan Credit Card. Now I had to satisfy my curiosity and jokingly asked with him about it.
The answer came as follows from him, first qualifying he was a down to earth farmer and went by his own instinct and judgement. He explained that it was his nature to always and consistently judge the actual cost and benefits and to assess who gained or lost from a financial transaction. Be it even with a bank. Therefore why would he borrow or have a KCC when he had enough financial resources to do so. Unless he had to buy farm equipment or invest on capital assets on his farm, he was not interested in credit at all. Interested, I thought it was only logical to know his investment theory too.
His investment cum risk management theory was certainly an eye opener. My friend very seriously explained he did not have a large corpus in reality but all the same he divided his surplus funds into ten parts. And he reviewed his investments and returns every fifteen days and sometimes weekly. He would change the quantum of investments at the review if really required, but normally any major change was after a few months. Not for him any product such as a mutual fund, he said it was too abstract and the concept of share markets as it is was beyond his understanding. He said he remained grounded in his world and simply targeted a return at 5 % minimum over the local bank rates and was highly satisfied now with the benchmark he had fixed. He earned more than his internal benchmark consistently. This encouraged him. Now the practice.
Two parts (of the ten parts) went to Fixed Deposits with Banks as he gained here and it was safe and he was not taxed anyway. And he switched Deposits between Banks too as interest rates changed. Two parts then went to Deposits with Arhtiyas (commission agents) for onlending and to obtain higher yields. He knew the commission members well and was integrated socially as an equal with them. So misgivings were minimal. Two parts went to relations and very close friends, they had to pay interest that was more than the bank rates but less than that of the commission agent. Two parts went to businessmen or local financiers, may not be trustworthy but would pay up based on their track record. Plus it was only for a short while. Then he shifted this particular two parts, if no opportunity to deploy was there, to the local post office savings account too. Or the post office deposits. Lastly, two parts went to those individuals, who even if they defaulted or were unable to repay the principal in time, would be honour bound and honest to keep paying interest. Plus they would pay up in any case in due course. Here he charged a higher interest rate too. Plus this was not an absolute rule and the degree of accuracy as regards two parts for each investment sector could change somewhat. He also met everyone he loaned too regularly on his normal rounds. Not specially so. And he emphasised laconically, straight faced, that he slept very peacefully every night to boot!
Well this was a solid grounding cum learning for me alright. I gained myself financial literacy and an insight sitting by Shri Atma Ram in his sitting area that day. Certainly. And I surely came away very Impressed. Really.
———-
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