Sunday, October 12, 2008

The crooks beat me by a wide margin

It takes a lot to build a reputation. To ruin it, takes not more than a few split seconds or just some fast spreading SMS rumors. ICICI bank realized it lately when some small town sub-broker (bent on shorting ICICI stock) viralled mass SMS saying the bank is in trouble.

Result – stock price plummeted (Friday it fell by 27%) and depositors withdrew their funds. What began as a trickle in some remote Tamilnadu town soon spread across the country catching the bank unawares.

The bank management did everything possible – it’s CEO gave repeated assurances, got even FM and RBI / SEBI to make public statements in support of its inherent strength, stuck notices on ATM counters - to arrest the damage. But it seems the drain of deposits and goodwill has been massive, or so it seems after the seriousness of purpose with which it is going after the offenders – that includes a Tirupur sub-broker of Motilal Oswal and a mass SMS portal and a free research site (with disabled stock tip links)!

Talk of Web 2.0 empowerment! Like guns, the crooks use it first… Email? Spammers run amok. Bulk SMS? It’s the fiefdom of hole-in-the-wall operators and pranksters. Now a small town sub-broker giving India’s second largest bank a run for its money - quite literally! Wish I could do something positive – say, build my business – by unleashing its power. But that I’ve found is not as easy. The crooks beat me by a wide margin! All that I could manage was to reduce my exposure to ICICI bank. May be silly. But, they say only the paranoid survive. Who is not afraid…?

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