A large number of banks who have made bad loans to wilful defaulters are having to resign themselves to a ‘haircut’.
When I first heard the word used in this context, I was intrigued. Would those responsible for having sanctioned the bad loan – the managers of the banks, say — have to have their heads shaved as a mark of penance? Should we expect to see a whole lot of bankers who’d overnight become bald?
However, I discovered that the haircuts bankers had to have were not literal but metaphorical: a ‘haircut’ in commercialese means having to accept a smaller sum when trying to recover a loan. If you’d loaned someone a hundred bucks and you managed to get back only ninety bucks, you would have taken a ‘haircut’. So how did ‘haircut’ come to mean monetary loss?
Touts who sell blackmarket tickets at inflated prices for movie shows, sports events, and other forms of entertainment are idiomatically referred to as ‘scalpers’, a term possibly derived from the old practice of Native American warriors of removing the scalps of their defeated adversaries as a token of victory.
Did the term to take a ‘haircut’, denoting financial loss, derive from the sharp practice of modern-day scalpers who metaphorically fleece their customers?
That seemed a possibility. But so did the Indian custom of the mundan ceremony that many male children undergo, which involves having one’s hair cut off under the auspices of a priest, who then charges the parents of the child a hefty fee for the service rendered.
So when bankers are compelled to take a haircut, does the term trace its etymology to the mundan ritual?
Then the other day I went to a local barbershop to have my hair cut. At the end of the exercise I was presented a bill of Rs 530, plus 10 per cent tip. Almost 600 bucks for a haircut?
I’d not only had my hair cut, but also my wallet cut. And I’ve finally understood why a banker’s ‘haircut’ is called a haircut.
(The writer is a former associate editor with the ToI. [Courtesy- ToI])