A recent article in Financial Chronicle reported that the Reserve Bank of India is going to conduct stringent background checks on any banks wanting to do business in that country. Because of the financial meltdown, the RBI’s new policy will be to determine early if any banks seeking business entry into India pose financial risks. According to the article, there are banks around the world, the United State, Europe, Japan, and China, especially, who are looking to open branches in India.
The economic meltdown has caused a slow down in the number of banks looking to open shops in India. Many banks, as we know, got into financial trouble. These banks cannot apply to expand services into new territories until they repay bailout money to their respective governments.
The Reserve Bank of India is demonstrating a great deal of wisdom in conducting these stringent background checks. Are you doing the same with your business? It is no secret that the economic downturn has caused a great many businesses to suffer financially. Some have even closed down, while others are finding it difficult to pay their debt loads. More than a few are having a tough time paying their debts.
Before you get involved with a business, as a client or a partner, it pays to conduct due diligence in the form of background checks and corporate research. There are business credit reports that will demonstrate the general health of a company. These are tools that can be used for pricing that is cost effective, even nominal. Considering the losses you may face, the ounce of prevention is far more easy than confronting the pound of cure.
Check them out before you do business. It’s the smart thing to do.
One reply on “A Recession Precaution, Conducting Business Background Checks”
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