21. Savings, Borrowings and Investment
21.1 My father had his SB A/c with the nearest branch of APCOB, Malakpet, Hyderabad. He used to ask me to deposit cheques or cash in the bank during my teen years. He also used to send me to Margadarsi Chit Fund Co for remitting monthly premia. Besides, as a college student, I used to pay fees in SBH Gunfoundry Branch, Hyderabad. This was how I was introduced to Savings and Banking.
21.2 With my joining the first job at 18+ in April 1971 in Andhra Bank, I opened my SB A/c to get monthly salary credited. I got familiarised with Recurring and Fixed Deposits. This habit continued after my joining SBI, Hyderabad. I was also initiated to LIC schemes for savings and insurance. Provident Fund facility was statutory. Even thrift and loans were started by me in the Staff Coop Society.
21.3 During 1975-76 our group, including myself, V Venkateswarlu, N Hanumantha Rao, PPK Rao, RL Nageswara Rao, UD Kumta, T Srinivasa Rao et al in SBI Hyderabad formed a Staff House Building Society in which I was made Vice President. The project was through our ECIL Branch and located in Kothapet. After my promotion as Trainee Officer in mid-1977, I withdrew from Housing Society.
21.3.1 I opened my first Public Provident Fund (PPF) a/c while working at SBI, Masulipatnam branch as Accountant in 1980. After completion of 15-year cycle, I closed and reopened PPF accounts twice to avail the IT benefits. PPF Accounts On getting married in March 1983, I started feeling the need for household articles like TV, Fridge, Bike, etc., and procured them with the savings and availing of consumer loans from time to time. By then, it was necessary to compare the Interest Rates on Loans and Deposits as also to know Income Tax Rules.
21.4 Life in Mumbai is exciting and challenging in many ways. It teaches you value of both money and time. Working in SBI Corporate Centre is also a rare opportunity towards planning of career, besides balancing family life. It's but natural that you get familiarized with Share Market, investing in Debentures, Mutual Funds, Deep Discount Bonds and Gold. In 1984-85, my boss Mr S Chintamani, DGM at ABD, CO transferred the SBI Rights Shares (1:5) to invest. He was an ace investor.
21.4.1 SBI share of Rs. 100 (Face Value then) was offered by the bank at Rs. 260 (premium of Rs. 160), so I invested Rs. 1,300. I was excited and became a proud owner of our own bank's five shares for the first time. We never had ESOPs at that time. About 95% of SBI shares were primarily held by Govt / RBI and only 5% were held by select privileged individuals / public. It was hardly being traded at around Rs. 400 and the bank used to declare annual dividend at around 25% on FV, the yield works out to less than 10% p.a.
21.5 I purchased my first and only Bajaj Scooter in 1986 in Mumbai. Going with the crowd, I used to apply for minimum numbers of 100 shares of good / popular companies like Timex (Titan), ICICI Bank, LIC Housing Finance, SRF, GMR (Sharada Alloys) and others in IPO market and rarely get allotments. It was a good learning but requires financial muscle to invest / wait and shrewd market knowledge to trade to make profits. All these transactions were operated only manually and without computerization.
21.6 My close friend and TO 1977 Batchmate, Mr TVLN Chary was Branch Manager of SBI, Vidyanagar Branch in late 1980s. He took all the pains of helping me acquire a 2 Bedroom Flat in a 4 storied Radhika Apartments in Ashok Nagar, Hyderabad (centrally located) promoted by Sri P Rama Rao, SBI Officer and Sons. I was sanctioned Individual Housing Loan by CC. I also took support from my father and father-in-law to contribute. Mr N Hanumantha Rao helped me in performing Griha Pravesam puja arrangements. All my family members attended the same. It was rented out later.
21.7 During 1991-92, there was a large-scale fraud in the Bombay Stock Exchange involving several Public, Private, Foreign, Cooperative Banks and NHB's funds. It was perpetrated by one Mr Harshad Mehta Securities Scam 1992. Heads of many top bosses in all these banks rolled and legal cases went on and on. In the first half of 1992, all types of shares (good, bad and ugly) were traded at exorbitant rates without any sense or link to Balance Sheets. In March / April 1992, SBI shares moved higher and higher in BSE on a daily basis and we all had no clue where this frenzy will stop. I sold 4 out 5 split SBI shares at a high of Rs. 19,000 and got Rs. 76,000 (against my original investment of Rs. 1,300). I availed bank loan and purchased a second hand Maruti 800 cc car in Hyderabad, which I sold in April 1996.
21.8 On administrative reasons, after spending 8 years in CC Mumbai, I was repatriated to Hyderabad Circle. I was initially expecting a posting as CM of any City branch, but in November 1992 was surprisingly sent to our Sangareddy branch, Medak dt., which is about 65 kms away. I took a hurried step of leaving the bank in April 1993 to join a private export firm. I was eligible for pension from SBI. I had to liquidate my Housing and Car Loans with my savings / PF Balances and Gratuity received.
21.9 I occupied my flat in Radhika Apartments. My family relocated to Hyderabad from Mumbai. I was not satisfied with the kind of work in the private firm. Simultaneously I was harping on Entrepreneurship and joined hands with 4-5 retired Officers of SBI to float a Nidhi Company, an NBFC, a Chit Fund Company in Hyderabad and another Nidhi Company in Ongole, Prakasam Dist. I was also investing in share market in primary and secondary market. All such investments did not get me expected returns. I also burnt my fingers by investing in Plantation firms and Dalmia Resorts-New Delhi (shared accommodation in Tirupati, AP) and lost.
21.10 An ex-colleague of SBI and friend recommended / compelled me to invest in Happy Homes Co for a housing site in Tirupati. Towards end of the Scheme, I lost my savings. My elder brother encouraged me to invest in an Agricultural Land in Bommala Ramaram near Keesara Gutta, Bhongir which I did. He had a larger farmland, adjacent to mine. But, after a few years, since there was no further investment or yield, I made a big profit in selling the same.
21.11 I took up a new job of VP of VBLL in Bangalore in April 1996. I replaced my Maruti 800 with a new car. Some staff members of VBLL and VBHL, Bangalore floated a housing scheme / plot in Begur village. I subscribed for a plot but had to leave for another new job in TAPMI Manipal in April 1999. Due to sudden death of the Organiser (Sudhakar) and disappearance of the Vendor (Ravi), I lost the money when the entire project site of Begur came under the NICE Road. My brother-in-law Arun encouraged me to invest in a Scheme of Housing Plot near Shamshabad, which I did in regular monthly payments. Not too sure whether new Airport built there benefited me or stunted the investment. I sold the same plot after few years and made a big profit again.
21.12 During 1996-99 stay in Bangalore, I was also trying to acquire at least a 3 Bedroom flat. At that time, the City was modernising in the fields of IT Sector, MNCs and infrastructure. I finalised one flat and paid token advance of Rs. 50,000. Due to my decision to shift to Academics and move to Manipal in April 1999, I had to withdraw the proposal and got refund. I never expected that I will return and settle down in Bangalore at a later date.
21.13 My tenant in Hyderabad flat was brother of a good friend of Mumbai, Mr Surendra Hegde. It was fully furnished with furniture, cots and beds, refrigerator, dining set, landline with STD facility. After staying for some time, the flat was vacated only to find that furniture was damaged and huge telephone bill was pending. I was handicapped to oversee or maintain the flat and rent out to a good tenant. I sorted out the matter and disposed of the flat to new tenant, sister of Mr OG Nagi Reddy of SBI. With Ganga taking up a new job in Manipal and SBI-Udupi offering liberal housing loans, I booked two 2-Bedroom flats with M/s Premier Builders, Manipal in 2002 and 2005. Both were well furnished and rented out to NRI Students. Subsequently, we disposed off with a marginal premium.
Premier Enclave and Premier Park Apartments, Manipal
21.14 Working in Academics also gave me roller coaster experiences against my expectations. There are petty politics with colleagues, problems with bosses and surprisingly sometimes Mentors turn suddenly to be Tormenters. I served to my best in TAPMI for two stints in responsible positions discharging both academic and administrative roles. First one was during 1999-2006 and second time during 2009-2014. Service conditions and Pay structure were well designed and hence I could save handsome amounts as also get PF / Gratuity and other terminal benefits.
Nandi Woods Apartments, Noble Residency Road, Begur Hobli, Bangalore
21.15 Besides me and Ganga working, our primary concern was to give best and uninterrupted studies to our daughter Sravanthi. During her Engineering studies in MIT, Manipal I purchased a TVS Scooty by borrowing from TAPMI. She successfully qualified as an Engineer by 2007 and MBA in 2009. All her education was funded by us from our own savings, but without any Education Loan. She immediately started working in Bangalore, where we moved out. I was with Alliance during 2006-2009 and IFIM (now JAGSOM) during 2014-16. It was in 2011, that we booked a 3 Bedroom flat in Nandi Woods Apartments, Bangalore, in joint names of myself and Sravanthi by availing Housing Loan from SBI. We also purchased two new cars viz., Honda City in Dec 2009 and Nissan Micra in 2013.
21.16 Sravanthi left her job in March, was married in April and left for Melbourne, Australia in May 2015. Having moved out of Manipal permanently, we decided to sell the second flat in Premier Enclave in late 2015. Market conditions were not favourable. Then came Demonetisation in November 2016 which further worsened our chances of selling. It took over two years to dispose off the same that too at a very nominal rate in mid-2017. Ganga retired from service in 2019 but started teaching CueMaths to young children at home. I too stopped my active working in early 2020 due to Covid19. Besides drawing monthly pension from SBI Vidyanagar branch from May 1993, I did very systematic financial planning, insurance policies, SBI Medical Policy B, getting monthly amounts from TAPMI-LIC Scheme, and regular interests from FDs.
21.17 All above changes in jobs, organisations and places of course, made an impact in our portfolios, particularly keeping update with Shares invested. Demat facility introduced in 1995 was not complied with. Printed copies of Annual Reports, AGM Notices or Dividends were not being received properly. All communications, transactions and AGMs were being held Online only. Most of my portfolio of investments got derailed and lost tracking. I made some failed attempts in last 2-3 years to consolidate my portfolio and regularise my status with all companies. I approached SBI Cap and other DPs but of no avail.
21.17.1 After having gained sufficient experience over the years, I was slowly moving my portfolio to a safe and steady Fixed Deposit based earnings, by consolidating my portfolio. In mid-2017 came another good friend and SBI Official, who was heading the local outfit of SBI's Wealth Management (Personal Finance). He visited us with all papers and team members only to open the first account. The amount of savings would be in Mutual Funds etc., and promises at least 15% Tax-free return, I was told. In phases, over a year, I invested up to Rs. 100 lakhs. My investment earned hardly a 5% return during the years. I withdrew and amount and switched to Fixed Deposits, whereas an ex-staff of SBI, I get a decent interest regularly.
21.17.2 In May 2020, during peak time of Covid19, I suddenly got a phone call from one Mr Vittalaraya Pai of Udupi. He studied my condition and struck a deal to regularise at least shares of 5 companies by taking up with Investors Education and Protection Fund / Authority, New Delhi which was constituted in 2013. I agreed instantly for all terms and started correspondence. It's over two years that my position is regularised to the extent of 90%. I opened mine / Ganga's DP Accounts with SHCIL, Bangalore and got dematerialisation work done. Claims of one company are in correspondence. The benefit of all this work is definitely sizeable, worth the efforts and surpassing all the losses I incurred.
21.18 Better late than never. Thanks to Covid19 Lockdowns and spending quality time post retirement, we both decided to further consolidate our position, listed out all assets and liabilities and updated entire data sheets with full details. We met, discussed and took advice / guidance of a close friend and senior advocate Shri Rajagopalan in BTM1 Bank Colony, in finalising our Will and got them registered with Registrar's Office in Madiwala, Bangalore in December 2021.
21.19 Another important work done by us was to file and finalise all our Income Tax Returns. Housing Loan from SBI Jayanagar Branch has been closed and all documents since collected. Khatha Papers obtained from BBMP and Property Tax is also paid up to date for our flat no. A503 in Nandi Woods Apartments.
21.20 As on date, we have dealings (Savings/ FD accounts and Lockers) with four banks - SBI, ICICI Bank, Axis Bank and Jana Small Finance Bank, Bangalore. Our Insurance Policies are with Birla Sun Life, Max India and State Bank of India Life Insurance Companies.
21.21 The caption "Savings, Borrowings and Investments" may not depict the complete picture of the financial status for an individual with 70 years of life. In the parlance of Economics, of course, Savings is equal to Earnings minus Expenses. In a typical Balance Sheet, we ought to show Liabilities and Assets on two sides. Here, I was narrating about Borrowings and Assets (moveable and immoveable). And then, the Shareholders or Regulators in my case being only myself, wife and daughter, no strict compliance of rules have been followed. Again, Investments over a long period, have yielded fruits as also dented with losses. Some are quantifiable and others not so. All these costed me dearly too.
21.22 I can't conclude this chapter without making reference to at least two such damages. One was a minor damage to friendship, that I tried to rescue a close friend and ex-College mate, from a very dangerous situation around 2012-13. I lent him Rs. 2 lacs instantaneously in Hyderabad while I was in Manipal, over a telephone call. That was a decent amount for me, but never came back. The second was a major damage costing my decent job, unquantifiable cash loss, peaceful life and everything.
21.23 I was under tremendous pressure in Dec 1992 after my return from SBI CO Mumbai, leaving my family behind. I was very much depressed over multiple issues that cropped up. I was misguided by another ex-colleague and supposed to be a close friend. I was only 40 years old then, with another 20 years of promising career in SBI. I took a reckless decision believing whatever was told to me, quit the bank in April 1993, after serving for over 21 years and getting best of career with four merit promotions. I had foregone at least 25 types of service perks, facilities and decent working conditions. He promised me moon but ditched me that I was not even grounded but pushed several layers below that level. Here I lost a friend, a bright career and life term uninterrupted / ever growing / assured income. I will be covering about friendship, but this is why I gave the title ROLLER COASTER.
Continued ......... 22
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