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 !!


  1. Mr.kapali sir,your blog are interesting to read,carry much more informative too.
    My suggestion is to write book on different topic,even layman can understand and make it online by publisher may be more useful for society

  2. " Mr.kapali sir,your blog are interesting to read,carry much more informative too.
    My suggestion is to write book on different topic,even layman can understand and make it online by publisher may be more useful for society " - Ms Gomathi