On 23rd April 1992 Sucheta Dalal broke the securities scam. In the latest issue of Moneylife she recounts how she broke the story, and how hundreds of court cases have meandered for two decades with no end in sight. Debashis Basu tracks the post-scam market reforms in a separate piece. On the stands now. Buy a copy today!
On 22 April 1992, exactly 20 years ago, an acquaintance of the news editor of The Times of India tipped off Sucheta Dalal about an incredible story. Harshad Mehta, arguably the only superstar the Indian stock market has seen and known by the moniker Big Bull, had been summoned by the State Bank of India (SBI). I was told that Harshad Mehta—whose apparent stock-picking prowess had made him a media darling—had been asked to pay up Rs500 crore immediately and was to hand over a cheque the next day. Harshad, with a following to match a film star or a cricketer, caused a flutter at the Bank by arriving in his Toyota Lexus—which, at Rs40 lakh+, was among the most expensive cars in the market at a time the Indian economy was just opening up...
This is an excerpt from the cover story in the latest issue of Moneylife. Pick a copy today.
The Scam, the only book on the two biggest securities scaam, is a perennial top seller among business books. Now in its 7th printing, the book reads like a thriller.
" During discussions that night, Subba Rao called R Sinha, chief general manager (vigilance). They discussed the course of action and then planned to go to the Chairman, Maneck N Goiporia’s house. But they were told that Goiporia was out meeting somebody and would return only after 10 pm. It was then that Khemani and Subba Rao decided that Sitaraman should be called back….They even sent somebody over to the branch and broke open Sitaraman’s drawer. It was a desperate move. There was nothing there..."
"The skyscraper that houses BSE hadn’t yet come up. There used to be a trading ring, where brokers and jobbers struck deals, located in the adjacent three-storied structure. The ring was a reserved area, open only to jobbers and brokers. Harshad was just an onlooker. But he had a burning desire to get in and do deals. He cajoled the doorman and stepped in to watch how the world of the stocks spun on its invisible axis. That afternoon a new chapter began in the life of Harshad Mehta. A totally unfamiliar world that would be his kingdom ten years later..."
The authors have excellent credentials for attempting this book, which takes the subject head-on which is its endearing quality. INDIA TODAY
Written in a racy style, the book weaves together the main players and the not-so-well-known sub-scams… The authors have done a commendable job… THE ECONOMIC TIMES
This book brings out all the details that a lay and even a not-so-lay reader may want to know now. The authors have to be complimented for their excellent expose. BUSINESS WORLD
The World Bank research offers the most comprehensive picture of how adults around the world save, borrow, make payments, and manage risk
Three quarters of the world’s poor don’t have a bank account, not only because of poverty, but the cost, travel distance and amount of paper work involved in opening an account, according to new data released by the World Bank.
About 75% of adults earning less than $2 a day have saved at a formal financial institution, according to the 2011 survey of about 150,000 people in 148 countries. The problem of being “unbanked” is also linked to income inequality: the richest 20% of adults in developing countries are more than twice as likely to have a formal account as the poorest 20%, according to the data collected by Gallup, Inc. for the World Bank’s global financial inclusion database. The bank’s Development Research Group is building the database with a 10-year grant from the Bill and Melinda Gates Foundation.
The research offers the most comprehensive picture of how adults around the world save, borrow, make payments, and manage risk. Worldwide, 22% of adults report having saved at a formal financial institution in the past 12 months. More than half of the population in developing countries doesn’t have a bank account, compared with just 10% in rich countries.
“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world's poor,” said World Bank group president Robert B Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world's 'unbanked' makes the case: the more poor people are banking today, the more they are banking on their future.”
Even among those who do have a formal bank account, only 43% use their account to save. And 61% of account holders worldwide use their account to receive payments from an employer, the government or family members living elsewhere, according to the World Bank global financial inclusion database, or Global Findex.
Women make up a disproportionately large share of the unbanked. For example, while 37% of women in developing countries have an account, 46% of men do. That gap is even bigger among those in poverty: women living below $2 a day are 28% less likely than men to have a bank account.
“Financial tools for savings, insurance, payments, and credit are a vital need for poor people, especially women, and can help families and whole communities lift themselves out of poverty,” says Melinda Gates, co-chair of the Gates Foundation. “The Global Findex can enhance our understanding of how poor households access and use financial services.”
Lacking a bank account often forces savers to resort to risky measures, such as putting money under the mattress, says Asli Demirguc-Kunt, director of development policy and chief economist of the Finance and Private Sector Network, who co-authored the paper analyzing Global Findex data. “That makes it harder to build up reserves, let alone use credit, insurance and other complex formal financial tools,” she says.