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 !!

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 Bankhttp://timesofindia.indiatimes.com/city/chennai/Squash-champ-vs-bank-Verdict-on-February-20/articleshow/29677903.cms#write

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 ".....it 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

When the Crown stumbled

Being somewhat familiar with Internet and computers, I have always been making my banking transactions from home, so that the bank is relieved of hosting at least one customer less at the branch. I am a strong advocate of Internet banking and use of other means which would desist customers from visiting a branch. I have also been under the impression that when you have sufficient balance at your disposal and the means to access it, you are safe at anytime to face any exigencies in life. And unfortunately, it was this surmise that fell in a heap early this week. No my bank did not go bust nor was there any run on the bank. Customers were simply unable to withdraw their amount and make any transactions. Their bank balance suddenly looked like the film heroine whom you could admire from a distance but could do nothing more than dreaming about doing!

The bank originally established to encourage 'Overseas' operations but very much 'Indian' as for its banking roots are concerned screeched to a halt last weekend. The bank, which has so far been boasting of being the only bank in India to be using a home grown software developed by its own computer department manned by its  dedicated set of domain rich knowledgeable officials, was in fact driving with its proprietary software for quite sometime, with occasional hiccups. The hiccups, as and when happened, were deftly handled more by the patience of its loyal clientele than by the experts who  pitched in to put it back on rails.

What happened this week was a disaster- What started as a trickle slowly spread from Internet Banking to the ATMs until the final crown viz., the main banking software came tumbling down, leaving both the branch officials as well as the hapless customers aghast. For close to four days, people could not effect any transactions, withdraw money, close loans, make overdue payments resulting in a reported loss of hundreds of crores of rupees. While Rome was burning, the Bank chose to play violin with its own melancholy of " Unable to service due to Maintenance...". The Bank chose to clean up its own backyard for four days, at the cost of innocent and patient customers, as per the bank’s self confessed announcement at its net banking site.

At branches there were many instances of customer silently suffering such as unable to withdraw matured deposits, a parent restricted from proceeding with purchases for their wards’ marriage and the variations of rupee value and gold prices not exactly helping them. An international travel could not be made and a student was forced to continue to live with the suspense about the fate of his educational loan application. 

The rumor mills were also doing the rounds which forced even some of the irate customers to rush to the branches as they were fearing the worst for the bank, since it  could not transact for days continuously.

The branch officials were the worst to be affected as they were left to fend for themselves against the angry customers, who at places even threatened to take law into their own hands. Some frustrated staff, unable to face the customer’s ire chose to vent their feeling over the social network.

A software crash is not an unknown incident and it can happen to any organization at any time. What was more appalling was the reaction of the bank to the disaster in keeping everyone in the dark about the reason and the status of the remedial measures. If they have taken four days to maintain the software at customer cost, as they claim, I have a feeling that their legal department will be having its hands full, facing compensatory claims in the months to come. Clearly the bank was found wanting in handling the situation and in my opinion, this is more a disaster from the PR perspective for the bank than the software .

It is also time for the bank to introspect whether it is adequately shielded against the shortcomings that normally accompany the home grown software such as sufficiency and independence of testing of its software, periodical independent audits and Disaster Recovery Measures.

A disaster of this nature impacting the customers, though tragic, is also viewed  in its aftermath as an awakening exercise. It will be in order for the Board to constitute an Independent enquiry to find out the robustness of the software to meet the increasing functional and non-functional stress and expectations arising out of the flurry of new branches, whether lessons learnt from any previous such outages were addressed and the effectiveness of the Disaster Recovery Management which is in vogue.

As one who is associated with the bank for decades, I bled to hear customers using expletives in their ire. But, it was also heartening to hear that some of the branches went out of the way to meet the customers’ needs by making payments despite the non availability of the support system.  It is such gestures from loyal staff that helps me to retain my belief that this bank will be held high soon.

Unlike yesteryear when customers used to visit branches to form opinions, present day clients conduct their banking transactions from across the globe. Their gateway to the bank is its software which sits as a crown on the massive edifice of the bank, built on years of service and reputation. When it falters, it creates a very bad taste in the mouth. So, it is paramount that such outages are reduced to absolute minimum in terms of minutes and not hours and days. Hope banks  remember that it is not a sin to falter but to allow that to repeat, is.