Saturday, June 3, 2017

Beware of Bankers' bungling

Computerization in banks have brought smiles all over the place with the staff, despite being the biggest beneficiary,  initially protesting under the pressures of their Unions only to accede later to the lures of additional sops and the ease of work the move has brought in. It is ironical that the current genre of staff may not fully realize to appreciate the benefits as they have not been exposed to the tough pre-1990s rigours of manual banking. Customers too have started realizing the benefits in a better way in that their visits to the branches have been minimized with the advent of Internet banking, increasing number of ATMs and various types of cards offered to them.

As you entrust the realm of managing your investments to the banks and they in turn outsourcing the job to IT organizations some of whom are good in technology but not necessarily in the domain, the move has also brought in its own share of woes to the banks that have mostly been conveniently passed on to the hapless customers. The accompanying cyber risks and the banks' initiative and preparedness to guard their customer interest is another area that is beyond the scope of the topic of discussion here.

       With the banks keen on reducing the customer footfalls and with some banks even levying nominal charges for personal discussions ,  customers have started avoiding branch visits. Bank customers, belonging to the pre computerization era were used to issuing cheques and then having it tracked through passbook entries. The current trend is to make online payments and track them through related messages and online statements. But there are some who are keen on issuing cheques and many who could still not be electronically credited and this post is meant to share the travails of some such customers only.

One of my friend, a former bank official, issued a cheque to Tamilnadu Electricity Board for a very nominal amount but was shocked to be informed by the Manager that his cheque is being returned, despite having sufficient funds in the said account ! When queried the official has replied that 'the cheque has already been paid earlier and so is being returned'.

On further enquiry it is revealed that a cheque with a different cheque number has been paid few months back wrongly using this cheque number and so when the cheque with the genuine number is presented , computer has warned that the cheque has already been paid.

To elaborate , a customer will normally be issued with a series of cheques from numbers say 123451 to 123460 of ten/20  leaves. An earlier cheque bearing number 123453 would have been wrongly paid by keying in the cheque number as 123457 (say) and when the actual cheque with the number of 123457 is presented for payment, the system will rightly throw up a warning that the cheque has already been paid.

Being an obedient servant of the 'system', the bank (official) without applying its mind has returned the cheque with the reason' Refer to Drawer...', roughly meaning "we are not sure why this cheque has been issued by the customer. Better check with him/her". And it is generally believed that this is one of the rudest reasons given while returning a cheque.

As many of us are aware TNEB is very strict in cheque payments in that once a customer's cheque is returned for non-technical reasons, it will never accept cheque payment anymore for that account and the customer has to pay only cash from then on. In the case under discussion,  for its collecting cheque being returned the bankers of TNEB have also levied heavy penalty charges and TNEB has obviously passed on the same to the customer whose payment has been 'defaulted'.

The hapless customer , for having his cheque wrongly been returned by the bank first suffered the disruption in electricity services as TNEB promptly disconnected the supply ! First he had to run around, explain the situation and pay cash towards for the amount of cheque returned to restore the services !

When questioned as to why the cheque, which was otherwise in order in every way and also with sufficient funds in the account to meet, was returned  his bank official had the temerity to say that the cheque  was wrongly returned by TNEB's bank (sic) and so the charges have to be collected only from them !!

It is a clear case of inefficiency, indifference, professional arrogance and deficiency in services on the part of the bank official to have put the hapless customer into such a predicament and also had the cheek to advise the customer to approach payee's banker for redress.

Where the bank(er) failed :

1. Any return of cheque is carefully analysed more importantly for payment to TNEB, as any bank worth its name should know of and any banker with an iota of common sense is expected to be aware of the importance of payment to utilities.

2. Further, the bank official has completely failed to apply his mind in analyzing how a paid cheque could have been presented again for payment??

3. A simple browsing of the customer's account on the computer could have revealed the faux-pas of a data entry error committed earlier by the bank in keying an incorrect cheque number.

4. An additional sense of caution should have been exercised when a cheque is returned for technical reasons not related to availability of funds.

It is a fit case to be taken up with the consumer forum, claim the damages for penalizing the customer for the bank's fault, damaging the reputation and highlight the banker's inefficiency in the media, my lawyer friend specializing in Consumer issues, says.

How can we as customers be more alert to avoid such gaffes of the bankers which ultimately affects us:

a. It is a good practice to browse through your account periodically through Internet banking or keep updating your passbooks. Having issued a cheque, better track it until its payment and ensure that it is being paid with all the correct details mentioned there.  If this had been done, the said customer could have noticed the wrong cheque number, though he would not have anticipated the pain that is to be inflicted upon him later ! This is strictly not expected of the customer, but then if one is keen to protect oneself from others' gaffes, such measures are advisable.

b. Of late, banks are now levying 'unheard of charges' arbitrarily and this could reduce your perceived balance. Periodical review could help you to be aware of the real balance status.

c. Such periodical glance through the account  will also help you in knowing your balance status before issuing cheques, which could potentially be returned for want of funds.

d. Old timers growling with the reason of not being conversant with Internet Banking, OTP etc.,  -  - - - -  better learn them fast from their grand children, in their own interest !

So,  as a customer whose investments have been entrusted to the banks for their maintenance and disbursal as per our directions, it is for the customers in their own interest to keep track of their accounts.

Such measures, though not strictly mandated,  is certainly desirable, in your own interest to save some leg work and also to keep one's blood pressure under check !!

Friday, August 26, 2016

Depositors, Be(a)ware !

For sometime, the Government has been after the bank depositors, even those with small sums of deposits, in ensuring that every rupee of interest they earn on deposits is taxed and the recovered tax finds its way into the coffers of the government. Fine, No issues with that  and I for one would urge every citizen to pay their taxes and ensure revenue for the government to serve the people again. But, in the modus operandi that is being adopted lies so many loopholes, making the poor depositor gasp, squeezed between the banks and Income Tax authorities.

Banks, happy to have got some one to point the finger at, deduct taxes at will, on the interest paid on deposits and  some banks do not even care to listen to the depositors about the investments towards tax. In my opinion, even this is fine as banks  nowadays claim that they are not equipped with enough resources to have a one to one with customers on their tax plans and so escape by quoting the Government's directive in deducting tax at source (TDS), whenever the same exceeds the threshold value, as per their records.

The TDS thus recovered from the depositors have to be remitted by the banks to ITO and the status of the same could be seen by the individual depositors by periodically by logging into the Income Tax website   and look for Form 26AS.

Where the banks are erring is in outsourcing passing of this TDS data to ITO ,  to some third parties, mostly through the Bank's auditors . The data entry havoc that is being wreaked is a problem greater than the tax deducted itself..

The travails are in many forms:

1. The transaction dates mentioned in 26AS are not in sync with the actual date of credit of interest to the customers, making it difficult to identify the entry for reconciliation.

2. There are entries which do not belong to customers, increasing their taxable income, unnecessarily, at times even pushing the depositors to higher brackets . This is ostensibly because of messing up while keying in the PAN number, which is the key identifier of the depositor, during data entry.

3. After observing the discrepancies from the downloaded 26AS , when the depositor draws the attention of the banks to the discrepancies, some  banks simply throw up their hands saying 'this is not being done by us' or 'check with our auditors to whom we have entrusted the job'. This is ridiculous and most irresponsible, to say the least. While the bank has made the credit entry and are performing a legal obligation to report the credits of the depositor to the Income Tax department, should it not own the accuracy of data being passed? Banks are choosing to entrust this job of passing data , on their own volition without consulting, to a third party and the depositors could in no way be made accountable for errors and discrepancies created by such outsourced agencies chosen by banks for their own convenience.

4. To cap it all, its surprising that the Income tax authorities too would take only the version of 26AS as the final data and would not buy depositor's disputes on the same. Realizing the limitations of Banks, Income tax department could also arrange to provide some grievance redressal mechanism, instead of blindly taking what has been given by the banks.

If the depositor happens to catch up with such gaffes at the last stages before filing of the tax return, he is pressed for time and so has to suffer the injustice imposed by the bank and pay tax for interest amounts that have not been received by him !

So, what the depositor can do:

1. Keep track of your periodical credits from these sources by maintaining your own records .

2. After every quarter of the year , extract Form 26AS (from the website address given elsewhere in this post) and validate the entries there with your records.

3. Request for Form 16A, from the bank branches and make sure that the data passed by them to the ITO are correct and are actually received by you.

4. If you have deposits in more than one bank or branch, please note to get 16A from ALL the banks or branches where you hold deposits and receive credit from them.

In case of discrepancies, like entries not belonging to you,  take up with the bank(s) with a written communication and follow up.

After all these take the easiest of the steps -  just sit back and pray that your hard earned money is not squandered away by others' inefficiencies. 

Sunday, June 12, 2016

வாராக் கடன்களும் தேறா வங்கிகளும்

"கல்விக் கடனால் கலங்கி நிற்கும் மாணவர்கள்"
"கடனை வசூலிக்க வங்கிகள் காட்டும் கெடுபிடி"
"கந்து வட்டி கும்பல் பாணியில் கடன் வசூல்"

இப்படிப்பட்ட தலைப்புகளுடன் தொலை காட்சியில் ஒரு விவாதம் நடந்து நடந்து கொண்டிருந்ததைப் பார்க்க நேர்ந்தது.

இந்த கூற்றுகள் உண்மையானால் , இந்த மாணவர்களை விட ஒரு நன்றி இல்லாத சமூகம் இருக்க முடியாது!

பல போராட்டங்களுக்குப் பிறகு கல்லூரியில் இடம் 'வாங்கியபின் ' எப்படி வருடா வருடம் கட்டணத்தைச் செலுத்தப் போகிறோம் என்று விழி பிதுங்கிக் கொண்டிருக்கும் பொழுது வந்து கை கொடுத்த வங்கிகளை இப்படி நினைப்பது எந்த விதத்தில் நியாயம் என்று புரியவில்லை.

இதற்க்கு வங்கிகளும், அவர்களுக்கு கொடுக்கப்படும் அழுத்தங்களுக்கும் ஒரு பங்கு உண்டு . சில காலங்களுக்கு முன்,  கடன் வேண்டுபவர்கள் வங்கிக்குப் போய் வரிசையில் நின்று வேண்டுவார்கள் . ஆனால் இன்றோ அண்ணா பல்கலைக்கழகத்துக்குள்ளேயே வங்கிகள் வரிசையில் நிற்கின்றன .

இந்த அழகில் "வாங்கிய கல்விக்  கடனை கட்டவே தேவை இல்லை" போன்ற தேர்தல்  வாக்குறுதிகளும் அள்ளி  வீசப்படுகின்ற இந்தச் சூழ்நிலையில், கடனைத் திருப்பிக் கட்டலாம் என்ற எண்ணத்தில் உள்ளவனும் தயங்கி நிற்கிறான்.

போதாக்குறைக்கு 'ஆயிரக் கணக்கான கோடிகளைக் கடனாக வாங்கியவனை வெளிநாட்டுக்குப் போக விட்டு விட்டு இப்படிப்பட்ட ஏழைகளை மட்டும் குறி வைக்கிறார்கள்' என்று வங்கிகளை வசை பாடுகிறார்கள்.

இப்படி தொலைக் காட்சியிலும் தெரு மூலைகளிலும் கூவி விற்றால் எப்படித் திருப்புவார்கள் ?

அரசியல் அழுத்தத்தில் கடன் கொடுத்த வங்கிகளும் , கடனை குனிந்து வாங்கிக் கொண்டு, பின் நிமிர்ந்து நடக்கும் கடனாளிகளும் எக்கேடோ கெட்டு போகட்டும். இதற்க்கெல்லாம் நடுவில் மாட்டிக் கொண்டு தவிக்கும் வங்கி மேலாளர்களின் பாட்டை யாராவது நினைத்துப் பார்க்கிறார்களா??

கொடுத்தவைகள் வாராக் கடனாகி விட்டது என்று வேலையிலிருந்து ஒய்வு பெறுவதற்க்கு சில நாள்கள் முன்தான் விழித்துக் கொண்டது போல் ஒரு ஓலை அனுப்பி , ஓய்வு காலத்திற்கென்று நம்பிக் கொண்டிருக்கும் நாற்பது வருஷங்களாக சிறுக சிறுக சேமித்த பணத்தைக் கொடுக்காமல் போதாக் குறைக்கு தாற்காலிகப் பணி நீக்கம் வேறு செய்து விடுகிறார்கள் . இந்த மேலாளர்கள் என்ன ஆசைப்பட்டா இந்தக் கடன்களைக் கொடுத்தார்கள் - 'ஏன் கொடுக்கவில்லை' என்ற அழுத்தத்திலே கொடுக்கப் பட்டவைகள்தானே , இப்பொழுது வாராமல் போய்க் கொண்டிருக்கிறது !

வங்கி அதிகாரிகளின் பாடு இப்படி கேவலப் பட வேண்டாம் - கேட்பாரற்று போன இவர்களுக்கு உறுதுணையாக இருந்த சங்கங்களும் ஒதுங்கி நின்று வேடிக்கை பார்த்துக் கொண்டிருக்கின்றன .

இப்படிப்பட்ட விவாதங்களினால் வரும் விளைவுகளால் இன்றைய தொலைகாட்சிகள் நாட்டுக்கு  நல்லது செய்வதா இல்லையா என்று மற்றொரு விவாதம் கூடிய சீக்கிரம் வரும் என்றே தோன்றுகிறது.

Tuesday, February 10, 2015

Grateful IOBian

IOB is 78 years old , so I learnt from a social network post today. Am sure I am only one amongst the lakhs of well wishers and employees who acknowledges gratefully the bank for its services and support it has lent. May the Bank continue to serve in the decades to come.

One major difference between the public sector institutions and other private organizations is the deep rooted connection the employees feel they have with them. With the current scenario of employees looking over the shoulder for the next better opportunities, services extending for 30 and 40 years will soon be a thing of the past. Having been associated with IOB for 25 years, I can certainly feel nostalgic about those days, particularly as an employee.

When I joined the staff department in 1976, the bank has already grown and was still climbing. I can still recall people talking animatedly in buses about IOB declaring a 14.4% bonus to its employees, an astonishing figure when the more stable banks were contended to declare the statutory 8.33%.

It was a pleasure working at the Central office in the then 'Staff Department' and learning the ropes of administration and more importantly the art of letter writing from stalwarts who will beckon you with a circle around your initials in the office copy, to point out some omission. The respect for the organization was cultivated by advising us not to put the pins across the bank's symbol in the letterhead! The empty superintendent's chair will never be occupied even by staff working on holidays!!

The learning at the branches were priceless; From seniors who taught us customer handling, tallying of books, official discipline, cash handling, avoiding manual mistakes and the list goes on. The door to door Deposit campaigns made in the neighborhood taught me finer aspects of marketing and also enabled me to bring customers closer to the bank.

The bank not only created trust in the minds of customers but also the staff . The facilities offered to the bank men were enormous. Housing loans were given at 5% rate of interest and most of the bank's employees who own a house now would not have done it without this support. The yearly 'Festival Advance' offered free of interest was the first savings point of every employee with an eye on the future. I have known many employees, who used to buy jewels using the Festival Advance and other accumulations and then pledge the same under Jewel loan scheme, thus creating the precious bullion, which was a must in those days for the girl's marriage.

Had reasons to be happy whether it is rain or shine as they would attract either Flood loan or Drought loan. The employees were offered financial support to buy vehicles and at one point of time, we used to joke that everything we moved around belong to the bank. The house supported by housing loan, the vehicle through vehicle loan and the marriage of the employees were also assisted with 'Marriage loans' ! Assuaging the yearly income tax worry, the bank supported its staff  by offering loans on the investments one make like loan against NSC etc.,

'To deliver the best of judgments the judges have to be kept above wants', it used to be said. Adapting the adage, the bank offered support on all fronts and at every opportunity to keep their staff comfortable. Perhaps that is the reason the bank men were always in neck deep of various bank loans and drew minimal net salary at some point of their career.  But, at the end of one's service, a prudent bank employee could go with a handful of cash bag by making clever use of the loans offered and pooling in his own meager resources. IOB was always the first bank to offer such facilities and every IOBian will be proud to recollect such supports. I am yet to come across a common man who could use the bank's 'Recurring Deposit' scheme to better use than a bank employee !

It was the first bank to create its own home-grown software, when computerization was introduced in Indian banks and it is to our credit that people used to say proudly that one of the foreign banks in the neighborhood of our head office visited our computer department and appreciated the efforts and nuances used by the team.

An organization with over 2500 branches across the globe and more than 30000 serving employees is bound to come across many bottlenecks in its run and it is commendable that the bank has risen to the challenges and has covered its path with glory over 77 years. I am very confident that the bank will continue with its trail of glory and service to the people, despite the contretemps that could come from time to time. As an IOBian my heart always skips a beat when I pass through the Central office building in Mount road and see the towering building standing tall !

The current and future employees of the bank has the onerous responsibility of keeping its flag high and it is a matter of satisfaction that there are all signs of these IOBians surpassing this expectation.

Monday, December 22, 2014

How 'small' is Expendable?

Few days back, my friend living in New York, got a call from his bank saying that a transaction of USD 4 using his credit card was pending approval as they wanted to check the same being used in a small town in Africa. They wanted to make sure that the transaction was indeed made by my friend since the location was different. When he responded in the negative, the bank assured they will block his card immediately and send him a new card.

After disconnecting the call, when he tried to check his card history via net banking, the card had already been blocked from the account! The bank acted so fast and did the blocking instantly that it thwarted this and prevented any further attempts.

 It is suspected that the data attack on the popular retail store whose database was compromised was the reason behind this potential misuse, as my friend has made many purchases with the retail outlet.

Things to be noted here are U.S banks do not have the Indian practice of One Time Password (OTP) and instant SMS for every transaction, while only a notification will be sent on the App.

But, they follow an appreciable practice to check with the customer on any suspicious transaction- in this case he was contacted as the transaction was made from a place much farther from the declared place of residence. Imagine even for that 'small' amount of $4 !! With this they were able to avert a potential fraud as it is very likely that in the event of this transaction for a small amount going through, the fraudster would have made an attempt for a much larger amount with the data in his possession.

In this context, it is to be noted that today it was reported in a social networking site that RBI is contemplating to remove the practice of sending OTP for 'smaller' transactions and would soon come out with details. With the increasing incidents of cyber frauds, this appears to be a retrograde step towards protection of customer interest. While it is fervently believed that RBI will reconsider this ill-advised move, in the absence of such robust 'live' cross checking practices followed in U.S, the central bank could also enlighten as to how a 'small' amount could be identified, in this land , where the poverty line is fixed at Rs 27 in rural area and Rs 33 in Urban area !

Wednesday, December 3, 2014

Bold initiatives for better banking experience

When I went to the Citi Union Bank to deposit a small amount into an account at their Kumbakonam branch, I was surprised that the same could be done without using any credit challan. A handheld machine, similar to the card swiping machine is offered and the remitter is required to key in the account number and after verifying the name the amount is accepted by the attending staff. The receipt given is similar to the charge slip emanating from the card machine. Amazing that the whole transaction took only few minutes by what is known as 'Xpress Desk' banking.

No doubt a laudable thought process, cutting down the traditional process of filling up the challan including the denomination and stand before the queue at the cashier, who counts it atleast twice , brands a stamp and above a certain amount the credit paid in challan will also be countersigned by another official. I was informed that upto 49000 could be remitted in such a way !

But the bank will also do well to cover some of the potential risks:

1. Remitter's details are neither sought nor recorded anywhere and if required, the remitter cannot be traced. This could create problems for people in sensitive posts by making mischievous credits into their account.

2. No denomination is entered anywhere. In case of differences, counterfeit notes etc., tracing will be next to impossible, putting the bank staff to greater risk.

3. The charge slip like acknowledgement on the thermal paper may fade away soon. In the growing disregard of passbook practice, this could be risky for customers.

4. Newer avenues of corruption and black money conversion could be derived in course of time making use of the dropped security veil.

While the bank's efforts at innovative ways to cut down the waiting time at the banking hall is noteworthy, the bank would also do well to plug such potential trouble spots. Despite these apparent shortcomings , the bank must be applauded for taking some bold and innovative steps while the traditional pioneers in banking , under the protective National cover are still dragging their feet, even for minor steps that could facilitate better service to customers. 

Saturday, February 1, 2014

Dealing with shirking banks taking cover under black coats !

This was posted by me, today, in LinkedIn under the Group 'Banking, and Finance Technologies":

It was shocking to read the treatment meted out to the Squash champion Dipika Pallikal by the Axis Bank

Though the matter is subjudice , I would like to dwell more on such incidents rather than the specific case. 

Few days back one of my close relative too had this experience of a Nationalised bank rejecting money in ATM (reason "Unauthorised Access"), though she had sufficient balance in the account. The incident was reported and since there was not much help from the HepDesk, it was escalated to the CMD's office and even then the matter was resolved only after three days. 

Ultimately this turned out to be due a process failure within the Computer Dept and the branch, with both blaming each other, in open communications to the customer ! This was for a fairly urgent purpose and since it was a small amount, she could manage without the ATM support. 

There are few things on which I would like to pick the bankers' brains: 

1. What if such a denial happens at a very critical juncture, like one has to pay Hospital for the surgery to proceed on a Saturday night? How will the customer manage & what is banks' responsibility here for having denied payment despite a healthy balance in the account? 

2. The complainant's counsel argument in the above case was "A bank is a custodian of the consumer's money and denying the complainant use of her own money is a clear deficiency in service." He said Bank's argument of Force Majeure (chance occurrence or unavoidable accident) was not sustainable as no unforeseen event, like a power failure or snapping of communication lines, had occurred. The bank's counsel has said " was "a one-off incident" and there was no deficiency on the part of the bank...." 

Having denied the service and putting customer in a soup, the bank's effort to wriggle off as 'one of situation' is really a shocker. 

Understandable that counsels could be engaged to argue in any manner for defence/prosecution and it is their job to make a killer appear like a saint . 

What happened to the moral responsibility of the bank? 

Having said this, the bank also tries to wriggle out by questioning the authority of the honourable court / Forum by saying "...As the incident occurred on foreign soil, the forum did not have the jurisdiction to try the case...", despite the fact an International Debit card was being used !! 

It is highly desirable that such high profiting but mean minded and less customer friendly banks are taught lessons by the court in pulling the highest executive for having the cheek to put those in hot waters, whose only fault was in choosing the bank for parking their investments