Book Summary #1: Bad Money by Vivek Kaul

Read time: 2 minutes.

What is it about?

As the title suggests, Bad Money is a chronicle of India’s tryst with NPAs (non-performing assets) right from Independence to the present day scenario.

How did I like it?

This is Vivek Kaul’s fifth book. His earlier books were primarily on the evolution of money, the global financial crisis (2008) and the Indian Government’s policy-making, all of which had good reviews on Amazon. As someone who hasn’t read any of his previous books, it offers a good solace that I can trust the author.

I’ll be honest. The topic and the content could potentially be a little boring for the majority of people who are not interested in this area. Even I didn’t like the first few chapters, which focused a bit more on politics than I’d like; however, I later understood the significance of policy-making in the culmination of bad loans in the country. The book eventually picked up pace after that, and how!

In fact, all the good stuffs’ in the middle, packed with insightful data. Data is important. Or else it becomes one guy spewing gyaan without backing it up. Most of it has been used from RBI and CMIE (an excellent database) which, for the life of me, couldn’t figure how to use it in MBA.

Did you know what came before IBC? How the different RBI governors fared over their tenure? Or that Vijay Mallya and Nirav Modi are not the only ones we should worry about? What’s the consequence of a bad bank? How is a bank merger different and detrimental than other M&As? Could Rajan have done more if he continued another term?

These are just some of the questions that the book helps to elucidate, in a manner which remains simple for the average reader, yet engaging for someone who has a fair idea about the subject already.

Bonus: I really liked the chapter on personal finance at the end of the book, which ties all of it together and makes the advice actionable on the reader’s end.

Tip for nerds: Notice the citations that the author uses across the book. Some of books and papers quoted are quite handy to develop a deeper understanding on a particular train of thought. The Kindle version makes this easy. Reach out to me if you want me to share my highlights.

Buy this book on Amazon

Should you read it?

As my professor at MBA, B.S. Mishra, used to say,

Whether you are interested in macroeconomy or not, macroeconomy will always be interested in you”

This is important because it would be immature to categorize this book as one about Banking NPAs only. It goes beyond to make the readers understand about the context, significance and possible remedies.

Thus I’d strongly recommend reading this book, because unless we’re cognisant of the true extent of this deep-rooted problem, a solution will always remain elusive. Why should you bother about a solution? To answer that, I’ll end with a reference to a quote directly from the book,

“If you owe your bank a hundred pounds, you have a problem. If you owe your bank a million pounds, it has a problem. But if you owe your bank a billion pounds, everybody has a problem.”

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