One frequently reads in newspapers that a Union minister or a state minister has disbursed loans (agricultural loans/ educational loans/ loans to SME sector) to the beneficiaries in a particular area/branch of a public sector bank. The top executives of the bank, naturally, attend such functions.
During the programme, the bankers highlight the following:
a. Number of beneficiaries assisted by the bank’s branch/circle;
b. Quantum of disbursement and cumulative disbursement made; and
c. Percentage of priority sector lending made in the location of the branch/circle.
The top management of the bank does not give importance to the non-performing assets (NPAs) of the branch/circle at such events. When they attach importance to the number of beneficiaries and disbursement figure, why do they leave out data pertaining to NPAs? If the branch has sizeable NPAs, that fact should also be highlighted. If the recovery is far from satisfactory, there is no point providing further assistance to the people in the area or in the particular sector. This will lead to increase in the NPA figure of the branch/circle. The problem should be tackled at the incipient stage. Otherwise, many borrowers will default.
In rural areas, especially in the case of agricultural loans, a good borrower also becomes a bad borrower. There is a rise in defaults. This is done with the expectation of write-off/reduction in interest from the bank. This has become a contagious disease. The Union minister and top management of the bank participating in the function should also inform the public about the problem of NPAs and the consequences of non-payment of dues to banks. This will give a boost to recovery of loans.
RM Ramanathan, Chennai, by email
This is with regard to “You Be the Judge” in Moneylife (17 October 2013) which was a very informative article.
Bapoo Malcolm has cleared all doubts about registration of a Will. Two other points that could be clarified by the author relate to: (a) can the bank account in the name of the first account-holder, who has expired, be continued even after his/her death by joint-holders of the account, irrespective of whether they are the executor(s) of the Will; (b) can a bank account be opened by the executor of the Will in any bank and designated as ‘Estate of late XXX’? What precautions should be taken in these matters?
A clarification from Bapoo Malcolm in any future issue would be welcome.
Minoo M Patel, by email
Mr Malcolm says, “Some complex issues related to Wills cannot be answered without going into details of the specific situation. You will need to consult a lawyer and seek advice that is specific to your particular case, because there is no generic solution.”
Deduction of SMS charges by banks
I have savings bank accounts with the State Bank of India (SBI) and State Bank of Travancore (SBT). I gave my mobile number to both the Banks for sending SMS alerts when it was free of cost. I was not charged for this facility for the past one year. But, for the past two quarters, the Banks have started deducting charges without any intimation to me. When a bank decides to charge the customer, it has to be intimated well in advance. I, as the customer, should decide whether I really want the service or not. When I asked the customer care departments of the Banks concerned, the reply was that the charges and the effective date were displayed at their branch premises.
My basic question is: Once I have the SMS alert facility, why was I not sent a message on my mobile about the charges and effective date of charging? Also, when I was charged, at least I could have been given an SMS regarding the debit for SMS charges. I came to know about the debit for the SMS only when the entries were made in the passbook. It is a mischievous act by banks and they loot every customer for about Rs20 to Rs30 per quarter. They are accumulating small amounts aggregating crores of rupees. Most customers are not aware about this deduction, since the amount is small.
Though I am not a legal practitioner, I feel that it is a breach of natural agreement between a bank and its customers. Any change in the terms and conditions of service should be intimated to the customer.
SBI, Villupuram Branch (Tamil Nadu) has deducted Rs15 each on 29 June 2013 and 26 September 2013 from my A/C No.3XXXXXXXX53. SBT, Villupuram Branch (Tamil Nadu) has deducted Rs29 on 28 September 2013 from my A/C No. 0067XXXXXXXX4. As a remedial measure, I visited the branch on 14 November 2013 and I gave a written request to cancel the SMS service facility. However, SBI and SBT refused to reverse the debited amount already deducted. Also, I was informed that I would be charged for the quarter ending December 2013.
I think most banks are following this mischievous practice and accumulating money every quarter. Customers are not aware until they go for passbook updates. This fact should be brought to the notice of the appropriate authority (Reserve Bank of India) for setting stringent guidelines and, hereafter, any proposal to charge for any service offered by banks must be intimated to the customer well before it comes into effect.
SV Sreedhar, by email
This is with regard to “Bottomline Cartoon” about Uncle Sam in Moneylife (28 November 2013). It is outstanding and certainly points to the way the US deals with its adversaries. The Earning Curve article reinforces the notion that it is better to be born at the right moment in history, to reap benefits! Most Indians may be cursing themselves for being at the wrong place and wrong time. It may not be our choosing, but is certainly worth getting such an opportunity. The statistic of 61% for trial & error is an example of real life. The same article also helps us to plan for retirement, even though it is difficult to plan years ahead.
Prasanna Sampath, by email
COAI demand is funny
This is with regard to “Reliance Jio must be restricted to one million numbers per circle, says COAI.” This demand is funny and, if there is such a rule, it must be scrapped. The numbers should be given as per the demand. Reliance Jio is asking for 40 million numbers that need not be given at one go. But, to restrict numbers per circle is not on.
This is with regard to “Sachin Tendulkar’s Bharat Ratna and Mission Mars: Some uneasy questions” by Prof Dr BM Hegde. Great article, Dr Hegde! I just hope more people see your point! All that taxpayers’ money spent on the Mars mission could have been used to improve sanitation somewhere or build a new road/repair a bridge.
India is not poor though its people are!
This is with regard to “High top management compensation hints at ever-increasing inequality between the rich and the poor” by Nagesh Kini. This well-researched article puts together food for thought, if only the people, whose thoughts matter, are willing to think.
The rich and the powerful in India (politicians who manage government, corporates and religious bodies) have cornered most of the country’s resources and our dilemma is not comparable with the problems of developed countries like US.
Revelations like those made by RBI deputy governor—about write-offs in favour of wealthy by banks and annual waiver of taxes payable by corporates (that could be several multiples of one trillion, if the figures during the past 10 years are added up)—will give a rough picture of how the rich are becoming richer. Maybe the government, or any national organisation, should compile this information and create an inventory of estimated domestic stock of gold and other precious tradable resources.
Bringing transparency in these areas will prove to the world that India is not poor, though its people are.
This is regarding a very good article, on the website, titled “Redevelopment of old building: Here is the checklist for home owner, CHS office bearers” by Advocate Vinod Sampat.
The contents are excellent and will definitely safeguard the interest of the members of the housing societies. This is a great service to the readers.
The members of the housing societies, however, have one better option of redevelopment of old building and that is “Self-Redevelopment” wherein the society can finance the project cost by selling some area and sharing the rest of the area, by appointing a reputed architect and a builder. The self-redevelopment project has the maximum benefits of the redevelopment with minimum risk.
I shall request you to publish some articles on “Self-Redevelopment of Old Buildings” for the benefit of readers, wherein the benefits from the redevelopment can be maximised with minimum risk.