Hindu Finances

On Saturday October 19 1996 the Sanatan Dharma Maha Sabha held an intense conference on banking at its St Augustine headquarters. The distinguished speakers at that conference included Dr Compton Bourne, Principal designate UWI speaking on “The role of the banks in a modern society”, and Dr Anthony Gonzales, UWI “ History of Banks and non-banking institutions in Trinidad and Tobago.” An important presentation was also made by Donald Macpherson, Former Deputy Superintendent of Financial Institu-tions (Canada), who spoke on the “Recent history of Bank Failures in the Caribbean and elsewhere and the causes of such failures.” The reason for this conference on banking was the then crisis in the local banking sector where CLICO the insurance company was about to acquire the majority of shares in  Republic Bank. The resultant debate caused enough panic within the financial sector that the Maha Sabha thought it appropriate to develop a position so as to inform the Hindu community and by extension the Indian and national community.

As the legitimate Hindu voice the Maha Sabha over the years have hosted many conferences that address issues that are important to the Hindu community and due to that importance these conferences always capture national attention. The Secretary General of the SDMS on the occasion of the Banking Conference wrote “The SDMS believes that monetary and financial policy as they affect the banking sector must not hinder the observance of our philosophical principles…We want to increase awareness and sensitivity to the needs of hardworking savers who in the past kept their money in a pan under the bed, or in the mattress, but now possess a portfolio of savings, bonds, and shares in banks and in other financial institutions. These people, many of them small savers need guarantees of safety. They need to have confidence in the system. Some of them have lost fortunes when it appeared to them that the supervisory and regulatory arms of the State failed to protect their interests.” “We want to make it clear that our community is adapting to the technological changes which join this country with the capital market of the world.

We are not a people who keep wealth only in land as many of our grandparents did. While we still bequeath land, such land may be tied up in mortgages, and other security arrangements. ALL ASPECTS of the banking and financial sector therefore concern us. In this regard we are also concerned about the perception that certain institutions were set up to serve sectional interests while costs were borne by taxpayers and citizens of all groups.” Once again the Maha Sabha has been called upon to caution the Hindu community in the area of finance as the words of the SDMS in 1996 still appear to hold true as there are elements within the financial sector that specifically play upon the Hindu emotion, yet these institutions are neither Hindu and display reckless financial behavior uncommon with the sector. Hinduism teaches of “Purushar-thas” which means objectives of man. According to the Hindu way of life, a man should strive to achieve four chief objectives (Purusharthas) in his life. They are: Dharma (righteousness), Artha (material wealth), Kama (desire) and Moksha (salvation).

Every individual in a society is expected to achieve these four objectives and seek fulfillment in his life before departing from here. The concept of Purusharthas clearly establishes the fact that Hinduism does not advocate a life of self-negation and hardship, but a life of balance, achievement and fulfillment. Artha means wealth. Hinduism recognises the importance of material wealth for the overall happiness and well being of an individual. Hinduism advocates austerity, simplicity and detachment, but does not glorify poverty. Hinduism also emphasises the need to observe dharma while amassing the wealth. Hinduism believes that both spiritualism and materialism are important for the salvation of human beings. As Swami Vivekananda rightly said, religion is not for the empty stomachs. Poverty crushes the spirit of man and renders him an easy prey to wicked forces. In ancient India Artha shastras (scriptures on wealth) provided necessary guidance to people on the finer aspects of managing their wealth.

The recent collapse (February 2004) of “a free-market miracle” in Latin America has unraveled into economic collapse, mass protest and repression in the Dominican Republic and is cause for close examination of reckless financial institutions with political agendas here in Trinidad and Tobago. In the late 1990s, the Dominican Republic was deemed an economic model for Latin America, with growth hitting seven percent a year. But Baninter of the Dominican Republic went bust when regulators discovered that hundreds of millions of dollars had been siphoned out of the bank. The government stepped in to bail out depositors — including those of the wealthy in offshore accounts — doubling the Dominican Republic’s debt overnight. The result was a free fall in the country’s currency, the peso. Prices surged out of control, and blackouts ensued because the government can’t afford to pay the subsidies that keep power affordable. This recent example is not limited to Third World or developing nations only. One of the biggest financial disasters ever to hit the state of Rhode Island was the collapse of the credit-union system in 1991.

Apart from the damage to depositors separated from their funds, the collapse precipitated a massive bail-out by the taxpayers through an increase in the sales tax. This, in turn, had and continues to have a negative impact on Rhode Island businesses. The local examples of similar economic disasters should be enough of a lesson to develop a cautious investor. However when that investor is being confused with politics and religion as reasons to invest, the formula becomes even more complex but no less dangerous. Interestingly Donald Macpherson at the Maha Sabha 1996 Banking Conference observed that the major reason for the failures of banking institutions was when these institutions entered into areas outside the realm of finances.