The benefits of privilege banking remain a mere eye-wash, as privileged banking services are hardly availed, as they matter little to privileged banking customers

The new private banks (or private banking) are seen to accord the special privileged/preferred/Imperia customers status to their few in number super rich/high or ultra-high networth individual customers. Privileged banking is essentially based on the volume and size of their balances in savings bank accounts and extent of the amounts placed in term deposits e.g. Axis Bank requires minimum Rs1 lakh in savings bank or ICICI Bank for salary accounts with a monthly credit of Rs50,000 or more or a home loan between Rs40 lakh – Rs1 crore.
 

A series of benefits of private banking or privileged banking are being given to a select few rich and at the same time simply denying them even in a lesser degree to the lakhs of aam janata.  Small time savings bank (SB) and fixed deposit (FD) customers who have chosen to voluntarily safe keep their hard-earned savings essentially in any bank nearer to home. This is done for the ease of drawing upon them on demand in case of dire need or emergency without any elaborate paper work and delays.
 

Most of the so-called extra/special benefits that are sought to be extended by private banks to this handful lot of super-rich so-called ‘privileged customers’, who hardly ever seen to set foot into private bank branch portals, more often than not they are seen to leave bank visits to the secretary or chauffer. Consequently, the benefits remain a mere eye-wash, as they are seen to be hardly availed of by many as they matter little to them.
 

What are these private banking benefits?
 

• • Priority in allotment of safe deposit lockers and in the choice of the size
• • Lower locker rentals
• • Some banks are said to be offering round-the-clock locker facilities with air conditioned  mirrored changing room at tony down town areas of Mumbai like Cuffe Parade, Malabar Hill and Bandra-Kurla Complex (BKC)
• • Reduced charges and enhanced limits on credit and debit cards
• • Forex, internet banking and ATM withdrawals and bill payments
• • Bank travel and gift cards
• • Accounts and differently coloured cheque leaves prominently displaying “Privilege Customer” tag that becomes status symbols
• • They have less waiting during branch visits
• • Free pick-up for cash and cheques to be deposited as well as home delivery of cash withdrawals
• • No charges for cheque return or stop payment or signature verifications
• • Especially dedicated relationship managers who keep on calling customers phone or cell to sell mutual fund, insurance or gold even when it is made amply clear not to pestered or reminded
• • Differently designed and coloured cheque leaves distinguishing them from the other customers
   

The hard truth is that most of the ultra-high networth individuals (HNIs) are too rich to hardly pay any visit to the private bank branches; perhaps many may not even be aware of the exact location!  Unless and until one frequently visits the bank on puts through physical transactions they have very little to gain in their privilege status. Most of them being tech-savvy do carry out most of their transactions online through internet banking or have staff to do their running about.
 

These privileged or private banking customers do not require or avail of the kaal-ka-baccha bank relationship mangers, parroting blah-blahs claiming to be ‘investment advisors.’ that they are not. These marketing gimmicks only serve to massage the egos of the few super rich customers. Most have on their own retainer highly qualified financial planners and advisors.
 

There was a time when elders/senior citizens were beneficiaries of additional +1% in interest on FDs, it now stands reduced to a mere +0.5%. This ought to be restored by extending it to all deposits – FD and recurring deposits too. The bulk deposits discretionary higher rate cap also should be restored to the earlier Rs15 lakhs from the now increased Rs1 crore. 
 

Common sense demands, on the contrary, that the benefits ought to have been first and foremost extended to the lakhs of small customers, the elders, widows, pensioners and housewives who have been loyally maintaining dedicated accounts with just one bank branch for decades at a stretch.   These savings accounts aggregating to crores constitute over 14.5% of the total low interest bearing deposits that the banks earn fabulously by advancing to borrowers at higher rates. Denying them the benefits is patently discriminatory.
 

(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)