Nirav Modi & PNB Scam: When Idiots Run Banks

PNB bosses have a lot to explain in this Nirav Modi scam. First and the foremost, how this bank employee (and possibly so many others across the country in different branches) had direct and unfettered access to SWIFT system.
Two things strike me here:

(1) Poor IT implementation - Though I am not a finance person, I wonder why the Bank did not interface SWIFT through its core banking. In such case, rogue employees would have no direct access to SWIFT and all transactions such this letter thing would have to go through a workflow and would also be traceable. To someone who works in the IT industry, this appears elementary. If so, his bosses(if they were not snoring to glory) would have to approve such letters. Even their audit would have caught it immediately (again, assuming they work).But sharing Swift access credentials(either sharing a login id and password to multiple employees or, giving  a login id to numerous people, with no checkpoint in between is mind-numbing stupidity.


(2) I have friends in Banking Sector (private banks, not PSUs) who have told me the concept of forced annual leave in which employees have to temporarily hand over charge and go on leave every year. This is done in the name of vacation but the idea is for a second person to see if things are okay. In this case, the managers possibly never bothered to institute such practices. Sitting in HQ is never a good practice.

Technology for startups/new businesses

Well, there are many dimensions of technology. But the thought here is about the basics that help them get off the ground. Therefore, a website, an email service, basic CRM to track business opportunities, even setting up a social media marketing campaign is quite a painful task for startups today. In fact, startups find themselves dealing with so many entities and agencies that they spend days and nights just getting them to coordinate themselves.

Ideacopter, a new venture started by veteran digital marketer Rajesh Kumar, lends itself to this space. Ideacopter helps the tech marketing part completely.

A Supply Chain Perspective of the Current Cash Crisis in India

Bullwhip Effect is a well studied and documented supply chain phenomenon dealing with supply and demand related uncertainties. In my view, it is what is at the root of our current currency problem.
Try to understand this: You wake up in the morning and find your neighbours going to the bank to withdraw money. Though you have 2 thousand rupees in cash with you that will last you a while but you come under peer pressure and head for the bank too. You go to the bank with an intent to withdraw Rs 2000 just to build your comfort level. Once at the Bank, you see more people than normal and become more apprehensive and up the planned withdrawal to Rs 4000. Just then the bank runs out of cash and asks you to wait for supplies which will come within an hour. You sign a new cheque for Rs 8K because you are seeing supply-side uncertainty. More people follow your pattern and bank runs out of cash again.

Picture Courtesy: Wikipedia article titled Bullwhip

On the other side, the bank sends urgent SOS for cash replenishment. The folks Incharge at the city level notice this pattern across branches and increase their aggregate cash requisition to the regional office by adding a significant buffer. The regional office totals the demand, then adds some more buffer and sends it to the HO. The head office looks at the region level demand data, adds more buffer, sends their demand to the supplier in this case, the RBI. There is an interstage latency and that causes more amplified repeat of this phenomenon in the supply chain. But what is the reality? The reality is that very soon the supply chain will be full of excess inventory at different stages and incur huge inventory cost in production, shipment, security, and storage. There will be very indifferent demand because, the end point in the channel, me and you, have no further appetite.
Our economy is currently in grip of a massive bullwhip phenomenon. Me and you can help it come out of it by withdrawing cash only if genuinely required, and only to the extent that is required. Remember, there is another supply chain phenomenon called Stock Pressure, which means if we have more of anything (cash, in this case), you will tend to spend more!

Major Technology Transformations & How Time Flies

I am writing this post after a long time. In the hiatus between the previous post and this, technology powering our lives has moved several notches. Android has moved to Ice Cream Sandwich 4.0 for tablets, Apple has released iOS 5, 3G is a reality in my country and hardware capabilities have leapfrogged many times that allow SAP and Oracle to build applications provide generational leap in application performance by concepts such as in-memory computing. It is also a fact that one of the towers of innovation in the tech world, Steve Jobs is no more.

 

The cloud over cloud has somewhat evaporated, with organizations and service providers having accepted the cloud as a fellow citizen of enterprise IT landscape. The Android Market now has over half million apps, and I use one of them even for banking! I have also upgraded my Android phone from 1.6 to 2.1 to 2.3.

 

Apple and Samsung are killing one another over intellectual property with no salvation in sight. And for one, the world instead of loving competition is loathing it.

 

Hope to keep up the writing more  frequently now. Lets see if I can target 3 posts a week if not more. What do you say?