Is the bank customer there to be taken for a ride?
Anil Agashe 27 March 2012

Goldman Sachs executives invariably described their clients as ‘muppets’, a disparaging term equivalent to ‘bakras’ in Hindi. Indian banks seem to have similar attitude to their customers, according to this first-hand account

I am a “classic customer” (whatever that means) of HDFC Bank. On 22nd February, I got a message from the bank saying that I had withdrawn a certain amount of money from an ATM on 31st January. This was strange because normally one gets such a message immediately after using the card and that is most welcome and efficient way of doing things.

The card number in the message was correct but I had not drawn the money. I checked to make sure that the amount, which was substantial, had not been debited to my account. I enquired with my “personal banker”. (I do not understand this concept of personal banker, but more about that later.)

When I called her about my problem, she said it was a system error and if the amount had not debited to the account, there was nothing to be worried about. This attitude tells you how much a bank cares for you. She also said that she would take it up with the concerned department. When I got no feedback from her, I wrote to the MD of the bank.

I immediately got a call from a senior officer from my branch expressing regret for the message. She also admitted that the matter is serious and such a thing should not have happened. I also got a mail from the MD’s office expressing deep regret and once again blaming the technology. The bank also complimented me for having taken the trouble of bringing this to their notice and how helpful I had been!

My question is why does the bank not realise that its system is malfunctioning and causing trouble to its customers? I wrote to the MD’s office saying that the excuse of technology being the culprit is unacceptable. Banks these days try and hide their inefficiencies behind the technology that they chose and implement. My second mail has not been answered till date. However this incident raises more concerns.

My big problem now is: What if the bank debits the said amount on a later date, saying that the technology had failed and the amount was debited by mistake to someone else’s account and that the mistake is rectified now? What do I do if this happens? To this there is no answer.

The second incident happened with the same bank. I got a message that there was an amount outstanding in my demat account; that I must regularize the account immediately and that I should contact their nearest branch. My demat account is linked to my savings account and all charges are directly debited to that account. The amount involved was very small and hence the possibility that my account did not have sufficient balance was most unlikely.

The next day I got a message to ignore the message sent the day earlier and expressing regret if any inconvenience was caused. I think apologizing with such phrases is an absolute insult... Once again the explanation was glitch in technology!

 I can understand such messages going to customers who do not have sufficient balance in their accounts. Subsequently I found out that many demat holders of the bank had received this same message on the same day.

The third incident was with IDBI bank. I wanted to transfer money from a savings account to an FD. I did the transaction online and I was told I will get the FD receipt by post. However, I realised that the amount was not even debited to my savings account. I went to the branch and asked why this has happened.

I was told the system does not accept transactions in joint accounts! The banks themselves rightly advise customers to have joint accounts as far as possible and to have nominees for all accounts. I was informed the system is designed like this and so the FD was not created!

This is ridiculous. The process did not ask me whether I wanted to make the FD in a single account or a joint account. Since my savings account is a joint E or S (either or survivor) account the FD should have been on a joint account unless instructed otherwise.

I spoke to someone I know in the bank. I was told that the bank would have to make changes in the system. Only the IT company could do that and the bank would have to pay. I was also informed that such changes have been carried out by another which uses the same software!

I think many people suffer such cruel jokes from most banks. Private sector and foreign banks, which are so proud about their “superior technology”, are the worst offenders.

I go back to this concept of personal banker. The lady designated as my personal banker once called me and said she would like to meet me. I went to the branch and asked why she wanted to meet me.

She said she could offer me many products. I said I do not need that advice since I am convinced that young bankers these days hardly understand banking. I am not willing to take investment advice from such people. Then she asked me to at least invest in an FD through her. I told her I can make an FD online. Why do I need her for this?

If the customer does not need them, why create personal bankers at all?

1 decade ago
i think the underlying problem is that banks are not allowed to price their services at cost+margin basis. e.g. if sending a statement by post or courier costs 5 rs or 20 rs, it should be charged as such, with cost of staff involvement. this should in return reflect in realistic interest rates for sb/fd. if this is implemented, it will expose the actual price of services & innovation will be rewarded by customers at large. problem is that rbi insists on some pricing to be skewed as a populist measure by govt & banks try to find ways to make it up by unfair means. not that it justifies their stance. one basic issue is banks doing non-banking activities - rbi must put a stop to % based commissions on such transactions & move it to flat fee based which reflects the cost+margin model. this will ensure that banks do not sell insurance at the cost of ignoring DD creation...
dayananda kamath k
1 decade ago
certaily otherwise indian banks can not make profits. rbi as well as every financial regulators finance minsistry everybody is interested in protecting bankers and promoting them and protecting them from your insurance premiumes paid to lic. i have brought all these matters to every authority concerned but no action so far even to the president of india as owner in trust of the public in public sector banks. then also it is of no avail. they create a big issu as to why army chief has not given written compolaint, but written complaints are not acted upon for years. or deliberately mistinterpreted to protect the concerned. i suggest everyone send a post card to president asking her to act on complaints by me. it will sort out lot of bank customers grievances.
1 decade ago
I've had a worse situation with HSBC bank where I had issues created w.r.t my credit card, my savings bank account, my relationship manager - all over a 6-8 month period. I faithfully documented each issue as it happened and wrote to the bank and the bank wrote back to me each time with a repeat message on how sorry they were. In past two qtrs I was penalized approx.Rs. 1650 per qtr debit for not maintaining my relationship account balance. When questioned about how come I had to pay monetarily when not keeping my side of the bargain while the bank got away with serious issues by expressing regret, I was merely refunded the amounts.

In one fell stroke, the bank made an issue of serious systemic problems an issue of charges - one which I told them i can very well afford, without addressing the core issues.

Similar incident in a country like US/UK would have got them into legal trouble, but here writing to the nodal officer has not elicited a reply to my last two mails where I pointed the REAL issue !!!

At least in India, I firmly believe that the common man is truly a 'muppet'
Replied to Alwyn comment 1 decade ago
I agree with you. I bank with Kotak Mahindra Bank and as you said everytime they goof up or do not keep on the right side of the rule, they just apologise. 1) When I write to them they are supposed to address the problem in a certain time frame. Everytime they reply, it is beyond that time frame and it has become a stock reply apologising for the delay and assuring of a prompt response in future. That 'future' never comes. 2) When there was a shortfall in ATM withdrawal, bank is supposed to make good within 7 days. After a much follow up it was credited after over 20 days. Bank is supposed to pay penalty at Rs 100 per day for the delay in crediting without the claim from customer. Yet I had write to them for crediting the penalty amount. That too has not been paid for all the days. Try paying their credit card due amount late by even one day and they will levy an interest. Your apologising won't do. 3) The 'system goofup' is another escape route. No penalty to the bank for that. If your computer goofed up in making their payment in due time, it is not excused. 4) Delay in issuing TDS certificate is another menace. Again an apology is all that is offered.

It is a one-way street.
dayananda kamath k
Replied to Prakash comment 1 decade ago
it is purely maximising profits by any means. when any extrenuous charge is levied only 50% will object or complaint use your delayi ng tactics 50% of that will not followup again then someboady will be still persisitant and use his connections or take matters to higher authorities or regulators refund him with aplogy a token amount . if he further perisits pay the full amount at this level also another 50% will not respond so out of 1005 charged only 12.5%you have to refund and balance 87.5% is pure profit worth taking the risk. only and only the regulaotrs step in and ask the bank to refund to all those who have been charged with penalty this system will change.
Replied to dayananda kamath k comment 1 decade ago
Yes. the laziness/busy nature - whatever the general reason of the common man for not protesting is certainly the primary reason for the unfair practices. DNC was formulated by authorities after the protests grew louder and regular. Similar thing should happen here before the Ombudsman wakes up. Right now he's busy rejecting over 70% of complaints.
girish prasad
1 decade ago
this may be . but i never meet with single incident in mumbai .it may be due to mumbai culture.
if we are knowing rules they are bound to follow.a personnel bad experiance may be due to a single member of bank
1 decade ago
In India, all banks, be it a PSU or a pvt. one, treat the common mass of savings bank holders as dirt. In fact, opening an account itself is so very humiliating even in the largest bank of the country and the other PSU banks that one feels humiliated and insulted. In West Bengal and Delhi, account holders are positively insulted and threatened in the SBI if they insist on TDS certificates (which, as per the income tax law, the bank is legally liable issue) or go for updating their passbooks. Similar instances galore in almost all PSU banks all over the country and the unions in these banks, including the officers' unions, are all supported by Leftist parties (and other political outfits). In the private banks, only corporates are entertained and whatever savings accounts they condescend to operate are those that the corporates open as the salary-linked accounts of their own employees. One can never, for example, reach any manager in any pvt. sector banks, and the only way to communicate with one's bank branch is through IVRS operated inanimate medium. This is all supported and encouraged by the RBI which is least bothered if the banks, even in the public sector, refuse to accept its dictats. RBI, for example, has categorically asked the banks NOT to refuse to accept cheques across the counter against receipts, but not one PSU bank cares to follow this and all are forced to depend upon drop boxes which are opened, in many cases, once in a blue moon.

The truth is that, the nameless commoners must suffer in this country.
MK Gupta
Replied to Aban comment 1 decade ago
Aban is so right. A PSU Bank gives house construction loans to a houseowner, after taking the original documents into custody, only through cheques issued in favour of the contractor engaged by the owner! The sheer incredulity of the matter is baffling-since, while the property is valued at more than Rs. 5 crores and the amount of loan just 40 lakhs, the bankl has no faith in the credibility of the owner but in a contracor whose PAN is also not insisted upon! And, if in midcourse, the owner is compelled to change the contractor, who naturally is bound to take advantage of the amounts being released to him, a new contractor has to be nominated to enable the bank to issue cheques in his name. This shows the disgraceful manner of banking culture in India.
1 decade ago
"Then she asked me to at least invest in an FD through her." this is the outcome of irrelevant target setting...
i already have a account with icici bank & do 100% of my work online. a while back, i went to a branch nearby to get an account statement in hard copy. after providing me the same, the staff wanted me to open an account - i said i already have an account with you. but they said please open one in this branch - i said how does it benefit the bank - as i'll only be splitting the money into two accounts raising their expenses. she said this is a new branch & they have targets...
R Balakrishnan
1 decade ago
Well said, Anil. Today's banking is something where we hope that some system glitch does not bankrupt us. And resolution takes long unless we have a personal " reach". There is no response unless you are either someone who is commercially important or has clout to create a nuisance.
Anil Agashe
1 decade ago
HDFC bank after pursuing for an year for my expired debit card has asked me to come to delhi to collect from the parent branch as i am 'untracable by them.

This is the message that I have received from Mr Shailesh Pathak a serviceman in the army. Just goes to show how careless banks are with customers. Can he not collect the card in Pune? And why does it take one year when you have his contact details?
1 decade ago
Just last week I wrote to their customer care team at [email protected].in to lodge my complaint and they were very prompt in responding to my query.
Why don’t you try this
Deepak R Khemani
1 decade ago
Being a classic customer myself I received a call some time last year from my personal banker informing of a scheme wherein 15% returns were assured, on prodding further I was told it was an Insurance policy and when asked that you cannot give a 15% return assumption when IRDA Allows only 6% and 10%, the call was disconnected and have never received a call in the last year ever from my personal banker!
Vikas Gupta
1 decade ago
From all the messages & my personal experience, one can easily conclude that now a days Customers are supposed to be treated as BAKRAS to sell third party products by these so called Relationship Managers of the banks. They would sell you each & every financial product whether you require or not, whether it suited you or not but they would not provide Services related to Banking Transcations which they are supposed to privide us Legally.
Replied to Vikas Gupta comment 1 decade ago
The Relationship Managers are meant to sell you 'other' products by which the bank can make money. And if you happen to be an 'aware' investor and refuse to be fooled by the RMs, then the bank and the RM loose interest in you and you start getting ignored. Till the time the bank and RM have hope that you will invest in one of their products, all the charges get reversed. They will accomodate you every which way. The moment they realise that you are not going to invest (and thus fooled) in any of their products, the charges stop getting reversed and you do not get any special service nor attention.

So much for the 'Relationship'.
1 decade ago
Never have the demat account and savings bank account with the same company!! Better to keep them segregated.
Dr Vaibhav G Dhoka
1 decade ago
Customer i.e ordinary citizen in India are bakras at hands of authority in present it is banks.I give my experience.Muthoot Fincorp came out with NCD and Indusind Bank was its banker to issue.The terms were application money interest payable from date of realisation of cheques.In our case cheques were realized on 12/12/2011.Company's registrar says bank has informed realisation date as 13/12/2011 and paid interest accordingly.When contacted local Pune branch said that they have informed date as 12/12/2011 but main Mumbai office has informed it as 13/12/2011.Nor bank or company has botherd to address customers grievance.
1 decade ago
These technology related problems will always be there, as after all the IT guys who design systems and programs are also human and do not have full domain knowledge. That is whey we need "Users Forums" where these glitches can be discussed and corrected. I have been suggesting this to my Bankers, SBI, without much success.
Replied to Pattabhi comment 1 decade ago
Its vest of time and energy to suggest any thing to Public Sector-govt.owned banks.

My SBI netbanking account-does not show term deposits AT ALL.Bank has generated multiple login IDS and still SBI and its highly paid officers are not able to fix the problem.-pending for over 5 years.

Oriental bank of commerce-bank/FD interest TDS can not be viewed on netbanking account (pending for over 6/7 years)

HDFC bank even after opening salary account (pan compulsary for salary accounts-even 8/10 years ago) did not deposit TDS and my income tax refund could not be adjusted for TDS.


1 decade ago
I have been having similar issues with Kotak Mahindra Bank. I received Rs. 1,000 short from their own ATM. I immediately lodged a complaint and got service request number with an assurance that the amount will be credited in my a/c in 7 days. The credit did not happen even after 11 days. Instead a SMS alert came stating that my service request was closed. I called up the Customer Service and inquired as to how they could close a service request without any resolve. They had no answer. Then I received SMS saying it was a mistake and I should ignore the earlier SMS.

I have more harrowing tales of Kotak Mahindra Bank. They were all ready to help and extend all kinds of services when they were growing. Now that it has established itself reasaonably well, the same customer is unimportant for them.

They themselves upgraded my accounts to Priority promising and assuring that it was not linked with my relationship value and without my asking, issued a Platinum Card. Then they remove my accounts from Priority citing less relationship value and then charge me a whopping Rs. 2,000 per Platinum Card as Annual Fees. It seems by such means old and loyal customers are milked only to make new customers by offering higher interest rates.
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