To all the well-known brands and huge invincible corporates…. Our sincere and whole-hearted best wishes that you grow more and more and reach new heights of success.

But….There is only one submission. Please don’t ignore the ubiquitous conjunction ‘but’ in the English grammar.  It is always lurking dangerously around somewhere.

No brand, No corporate, however big, however invincible is too big for a blunder.  You may believe that all your processes are fool proof.  However we would run the risk of slightly nudging you to just look at the last 5 to 6 years of financial history. Starting from Lehmann Brothers one after another, big names crumbled, declared themselves bankrupt, admitted to lapses in their in their processes, financials and accounting procedures and even admitted to fraudulent transactions.

The latest one to be ‘settle’ with regulators is the world’s third largest Bank – Citibank – that paid a fine of  whopping $7 bllion to US regulators on an investigation into the bank’s sale of mortgage-backed securities.  Such large fines and penalties have now become commonplace. Either the regulators have become super-active or the banks have become immune to regulations and believe that they can always get away by paying the fine.  And it is another flabbergasting story that the shares of the Citigroup still went up by 4% !   JP Morgan Chase and Bank of America are other two banks that are being pursued to pay fines of $13 billion and $12 billion respectively. Several other banks are under investigation in US for alleged irregularities in sales of mortgage-backed securities in the pre-crisis period. 

In another recent instance, Bofa publicly admitted that all was not well with their financials.  An error in accounting over the last five years showed that the money with BofA had been overstated by around $2 billion. Reportedly, the error was due to an incorrect valuation of what are called ‘structured notes’.   Some termed it ‘incorrect adjustment’ of investments acquired along with Merrill Lynch five years ago. The true picture would only be known to someone who gets to dig deep into the financials.

Whatever it is, the point we would like to make is, however big a corporate may be, however sound they think their processes may be, it is all ultimately driven by people. People and processes can go wrong anytime and it could take the organizations years to realize this resulting in a huge embarrassment at the most unexpected of hours.

This could be true of any process anywhere within the organization. And so could be the case with the Banks, NBFCs and HFCs in India.  Your lending processes, customer evaluation processes, collection processes, data management processes, skill and understanding of your people…..these are all areas that need constant review and monitoring.  No point messing with the regulator.

SineEdge deals exclusively into mortgage / housing finance and retail finance consulting. We can help in doing a focused evaluation of your processes, by running in-depth reviews of your processes and policies and identifying  gaps / risks so that you can take corrective action at an early date.

Call us at +91 9910112704 or +91 9871040392 or write to us at [email protected] or leave your query at our Contact Us Page.