Saturday, November 1, 2008

What are you thinking, Mr. Pandit ?

Citigroup recently cancelled its MBA loans to those most likely to pay it back (MBA students at Cornell, Ross, Sloan and several other schools). I assume that these loans have a low default rate – even if it doesn’t make Citi any money. I find this really surprising and shortsighted for s many reasons:

• Citigroup has depended on bright people coming from overseas to work here to fill its jobs – even its CEO is Indian !
• It is pretty likely that most people getting these loans come from countries that the bank operates in - the company could make these loans unsecured in their home countries
• These MBAs are amongst the highest earners and the most mobile workers in the world, which means they would be least likely to default
• Citi gets an great opportunity to put its brand name foremost in the minds of the world’s future business leaders

We have many foreign born CEOs - but the probability will diminish rapidly and we won't attract the best and the brightest to our nation.

We’re already suffering. H1B quotas of 65,000 means we struggle to find bright technologically-inclined people to work on startups that would create jobs, have a multiplier effect and ensure that American maintains its technological lead.

Its already getting hard to convince Asians (particularly Chinese and Indians) to get educated in the US and stay back to work here. With this loan cancellation, we will finally succeed in erecting those fences that some people wanted to build in the first place.

I hope JPMorgan (another former employer of mine) takes up these loans.

Will someone send an email to Vikram Pandit ? Or send me his email address. And Jamie Dimon’s ?

1 comment:

Shobhit Chugh said...

This sucks! It does show extreme shrt sightedness on behalf of citibank.