STORY Of AN NRI ENTREPRENEUR – RIDDLED WITH BANKING BLUES

Returned to Build. Met with Bureaucracy, Negligence, and Silence.

Written As Said.

I am an NRI and have lived in nearly 12 countries and visited over 60, all in connection with business. Now, at 70, I continue to invest in and run startups. My association with Indian banking goes back to the early 1980s when I launched my first startup.

Back then, nationalized banks were often inefficient but also remarkably considerate toward the needs of small businesses. Over the years, nationalized banks have certainly evolved—thanks in part to the competition from private banks. Today, one key difference stands out: nationalized banks tend to have staff well-versed in RBI regulations, while private banks, having emerged more recently, often struggle with a lack of experienced, knowledgeable personnel.

In the last 10 years, after choosing to bank primarily with private institutions, I’ve found myself repeatedly at the receiving end of their poor grasp of banking norms and RBI guidelines—errors that have cost me crores of rupees. In a more developed legal system, such lapses would be deemed criminal negligence. But in India, the law takes into account systemic challenges like widespread illiteracy, social challenges and pendency in courts, making legal recourse slow and ineffective.

As a small business owner, I serve as the core think tank for my enterprise. If I’m forced to spend a large amount of my time navigating police stations, consulting lawyers, and fighting court battles, how can I run my business?

Private banks, especially those engaged in financing purchases, often show little sensitivity to the realities and culture of SMEs. Worse, when confronted with mistakes, they tend to shut down communication instead of resolving the issue—perhaps fearing exposure to financial claims. At that point, legal action becomes the only alternative, and when such disputes pile up, even the most resilient entrepreneur is pushed toward shutting down operations just to recover lost money.

My experience with the RBI Ombudsman has also been deeply disappointing. In my view, they act more like spokespersons for banks than impartial arbitrators. On two occasions, I flew in from overseas specifically to seek a meeting with RBI officials, only to be made to wait at reception and denied any hearing. Eventually, I received a judgment—worded almost verbatim as the private bank’s own submission. There was no meeting, no discussion, and certainly no fair opportunity to present my side.

The bank’s submission had glaring omissions, and so did the RBI’s conclusion. Sadly, it seems the system still isn’t ready to hear the voice of the entrepreneur