Distinguished economist and former RBI governor SS Tarapore calls for implementation of guidelines so that families do not suffer due to onerous bank procedures
Economist SS Tarapore, a distinguished economist and a former deputy governor of the Reserve Bank of India (RBI), in his column Maverick View in the Hindu Business Line – When death visits a bank deposit raises certain vital concerns that call for immediate action on the parts of RBI/DBOD, BCSBI and IBA.
“Ensure that all banks incorporate a clause in the account opening form to the effect that during their lifetime all joint holders should get the option to state that premature termination of the term deposit may be permitted in the event of the demise of one of the joint holders, particularly the first holder... It would be best if, on the term deposit receipt itself, there is a stamped and signed endorsement by the bank that in the event of death of a depositor premature termination will be permitted.”
Mr Tarapore rightly asks, “How many families should suffer before the RBI realises that too many have suffered?” He calls on the top management to review the RBI’s November 2011 circular. He writes that one of the earliest initiatives taken by Dr YV Reddy when he took charge as RBI governor was to ensure that common man was not subjected to onerous bank procedures.
Presently dealing with this matter are RBI circulars of 14th March and 4th November 2011, where the BCSBI Code on Bank’s Commitment to Customers July 2006 was revised in August 2009.
In the light of prevailing conditions and taking a cue from Mr Tarapore all of them need to be revisited de novo and replaced by an all comprehensive circular covering all aspects including a clause in the term deposit application form, term/recurring deposit receipt, making it clear that the joint holder, as the survivor, becomes automatically entitled to the proceeds, including premature encashment subject to the heirs presenting the banks appropriate documents as to their title thereto.
The law anyway lays down that the joint holder or the nominee, if any, only holds the funds of the deceased as a trustee for the heirs and doesn’t become an absolute owner.
Since the accounts like joint operations, either or survivor and number one or survivor, belong to different genres, clear cut guidelines are required for disposition in the case of each of these. Also in the case of nominees more particularly when there are conflicting claims by heirs and/or interested parties.
After reading Mr Tarapore’s article, we collected the term deposit application forms from four PSU, three co-operative and two private banks. It was noticed that only Canara Bank, Saraswat and NKGSB Bank’s application forms contained relevant declarations that are reproduced hereunder.
Our discussions with bank managers disclosed total lack of clarity on the concerns raised. To err on the safer side their immediate reaction was to first mark the account with remark ‘Deceased’ and freeze the account and demand all kinds of documents like succession certificate, probate, etc. This botheration happens when they are not required or relevant, more so when the money is most required for the grieving families, most in middle-class and below.
The RBI in its wisdom needs to re-examine the matter and mandate immediate incorporation of an appropriately worded clauses clearing spelling out the mode of disposition in all the three circumstances of joint holding at the earliest to prevent unnecessary hardships to poor depositors.
Relevant extracts from Term Deposit application forms
Canara Bank—“In the event of the death any of the joint depositor/s prior to the maturity of the deposit, the bank will at the written request of the surviving depositor/s be at liberty, though not bound and at its absolute discretion to pay interest till the date of settlement, to repay the deposit before maturity or to grant an advance against the security thereof to any one or more of the surviving depositor/s with the consent of other surviving depositors/any of the surviving depositors as the bank may decide and to add/delete/substitute any names therein. The discharge given by such surviving depositor/s/any of the surviving depositor/s shall give the bank a valid discharge.”
Saraswat Bank—“Special instruction for term deposit : In the event of death of any of the joint depositors prior to the maturity of the deposit, the bank will be, at the request of the surviving depositor or all surviving depositors at liberty though not bound and at its absolute discretion to add/delete any name, or to repay the deposit before maturity or grant an advance against the security thereof, on such terms and conditions as the bank may decide and such payment before maturity shall constitute a valid discharge to the bank.”
NKGSB Coop Bank—“In the event of any of us, the bank shall be at liberty to make payment of the money to the survivors without the concurrence of the legal heirs of the deceased (?).”
(Nagesh Kini is a Mumbai based chartered accountant turned activist.)
Will the concept of the point-to-point AC bus service help in getting motor car users to move to buses? Will it be useful in actually addressing transportation woes of the Mumbai as a whole or merely going to serve a small segment and to what extent?
The Mumbai Transformation Support Unit (MTSU) and Brihanmumbai Electric Supply and Transport Undertaking (BEST) are working to get a Point to Point AC Bus Service Scheme (P2PACBS) put in place. The scheme is to provide services from certain highly populated cooperative housing societies (CHS) to central business districts (CBDs). It is hoped that with such home to office trips in AC comfort provided, most members of the CHSs will opt not to take their personal motorcars out for their daily commute.
The concept is not new at all but then the buses used were the non-AC ones and were being operated by private bus operators. This system is still in vogue. It is interesting to go into details to compare with BEST staged services. A non-AC ‘contract’ bus with capacity of about 50, charge a monthly sum of Rs900 per person for a 10 km trip length twice a day. Since most offices open between 9am to 10:30am, and also close between 5:00pm to 6:30pm, the bus operators have to make as many trips as possible within the given peak periods. These buses then idle around.
Before the stricter norms for school buses came into vogue under the School Bus Policy, these buses were also being used on school trips. To enhance its income, the contract bus operator would try to reduce travel time by often bypassing traffic safety norms, which only a pedestrian or cyclist is able to observe as they are the most vulnerable groups affected by such flouting of safety norms. Also idle time parking is done wherever the contract bus operator finds place and narrow lanes become such parking places. They then keep the space reserved for themselves. Maintenance work is also carried out on these streets and footpaths if any get encroached upon to cater to the needs of drivers, washers, etc. The bus and the road/footpath space becomes dwelling for the bus staff.
From the commuter’s perspective, Rs900 per month of say 25 working days a month means the commuter pays Rs36 per day. For the same trip by BEST, it would cost Rs36 a day (latest Express bus service fare). But the BEST buses are loaded to 70 to 90 persons during peak period and frequency not necessarily to every commuter’s need or liking. These are also not from the gate of their CHS. Contract bus thus scores over BEST from fare as well as comforts point of view. “Organized corporate commuters” will find the P2PACBS scheme a great boon.
Basic operational costs of BEST buses are (i) driver’s and conductor’s salaries, (ii) fuel expenses (iii) maintenance of buses and (iv) depots for stabling buses. If the contract bus operator matched his driver’s salary with BEST bus driver’s, bus maintenance was as good as BEST’s (although lately that has been deteriorated too) and they paid for the parking too then surely for the level of service, the fare structure would significantly surpass the BEST fare structure as the private operator’s profit too has to be added to the overall costs. By parking on roads, there is a social cost citizens pay and usually these locations are rarely near residences of people who are affluent. Therefore, it is the less affluent who are providing facilities to the more affluent without in return receiving any facilities of improved general public transport; on the contrary they are subjected to greater hardships.
Only 2.8% of Mumbai citizens use motorcars. This number comes to 3.5 lakh. If the point-to-point AC bus service is hypothetically provided for all the personal motorcar users, it will benefit only 3.5 lakh people. This is because those not opting to take the new bus service will be driving in less congested road and the rest will be using buses. Since the suburban trains carry 75 lakh people daily in miserable peak period loading and the current users of BEST bus services are in perpetual traffic jam during peak period, their plight does not get addressed by this P2PACBS. Since P2PACBS will be like the contract bus service, it will be a fixed time service, providing no flexibility in terms of time. People do not like to lose their independence of travel. This constraint is not acceptable to the affluent in general. When in 1974 the petroleum products overnight became three times costlier, car pooling was resorted to initially, but practically within three months, people using personal motorcars returned to earlier independent use of own motorcars.
With the P2PACBS scheme in place, two scenarios could be visualized. (i) people in CHSs take the view that it is in their interest to be restrained by discipline imposed by the P2PACBS and travel in comfort or (ii) drop off the P2PACBS scheme as it is not being used adequately because non adherence to time by the commuters and thereby return to use of personal motorcars.
In my opinion it is the latter scenario that will emerge, with personal motorcars driven by employing a driver. Since a car is available and is being driven by the driver, it will be used by the family for dropping and picking up children going to school and college and spouses attending social events and shopping and host of other things, adding to the prevailing road congestion. Even if the former scenario emerges, personal motorcar shall get used for all other purposes mentioned thereby providing no respite from the road congestion.
Besides P2PACBS not providing independent mobility, it will also be subject to the normal delays of everyday traffic. All in all, I do not see any benefit from P2PACBS scheme but one.
What is that benefit I foresee by P2PACBS? People who try out the scheme and find life adequately comfortable will suggest or demand (i) shortening of journey time by asking for dedicated bus lanes and (ii) increase such services so that if they miss one bus they could board another. Since this will be demanded by people who are affluent, the suggestion will be given greater weightage. Bus Rapid Transit System (BRTS) fulfils dual purposes. Firstly it will delink the fixed time boarding requirement of the P2PACBS scheme by providing frequent services. Secondly, BRTS will have significantly excess carrying capacity that will facilitate general public in using this service as an alternative to the overcrowded railway and existing BEST services.
Whichever way MTSU, BEST or BMC proceed in addressing the transportation woes of Mumbai, it is hoped that they will put up an efficient and effective BRTS in place soon even if they initially look at addressing excessive personal motorcar usage aspect only.
(Sudhir Badami is a civil engineer and transportation analyst. He is on Government of Maharashtra’s Steering Committee on BRTS for Mumbai and Mumbai Metropolitan Region Development Authority’s Technical Advisory Committee on BRTS for Mumbai. He is also member of Research & MIS Committee of Unified Mumbai Metropolitan Transport Authority. He was member of Bombay High Court appointed erstwhile Road Monitoring Committee [2006-07]. While he has been an active campaigner against Noise for more than a decade, he is a strong believer in functioning democracy. He can be contacted on email at [email protected])
Transport activists have welcomed the state government’s move saying that it would help in improving public transport and pave the way for the BRTS
Mumbai’s harried commuters can soon expect an easy travelling experience. The state government is planning to roll out air-conditioned (AC) point-to-point bus services from the commercial hubs like Bandra-Kurla Complex (BKC), Nariman Point and Parel to the suburbs. The scheme aims at discouraging car usage, especially single occupancy users. Transport activists have lauded the move calling it one step forward in improving public transport.
Jagdeep Desai, a Mumbai-based transport expert, told Moneylife, “In-principle it is a good idea, providing easy commuting for the office goers. For such a service the thrust has to be on the frequency and timings. It has to be on par with office hours. There also needs to be a proper planning for the returning buses. Since the during office hours the buses will ferry the passengers to their destinations, on the return journey it will most likely be empty. Here fare reduction would be one way of attracting passengers.”
Another activist suggested that instead of all buses returning to bases, the same can act as shuttles in business areas until the end of each working day. For instance, there must be shuttles from Churchgate to Nariman Point and CST Station. Or Lower Parel to BKC or BKC to Andheri and vice-versa. The government should also learn from its earlier AC bus plan named ‘Limouzine’, by a private player, which was operational in the early 90s. Under this plan, dedicated AC buses were used to commute passengers to Nariman Point from the suburbs. The plan failed as there were few passengers or the bus was empty on the return journey and with Nariman Point as only business hub. However 20 years later the situation has changed with emergence of three other central business districts, namely—Lower Parel, Bandra, and Andheri, along with Nariman Point.
Dr PS Pasricha, former deputy commissioner of Mumbai police (traffic) and also a PhD in traffic management told Moneylife that, “An average size of an AC bus is one and half times that of a normal car. If you are giving the option of comfortable AC bus to car users, then the problem congestion will also be solved. Such service is good for the point of view of congestion, pollution and also efficient considering the rising petrol prices.”
Chandrashekhar Burande, an architect who writes a blogs on Mumbai’s developmental issue says that, “In 2008 I had conducted a workshop on the need of quality public transport as the large population dependent on it. I am glad government is now thinking on these lines.”
Recently Maharashtra chief minister Prithviraj Chavan gave a nod to the scheme. The draft plan for the scheme is being prepared by the Mumbai Transportation Support Unit (MTSU) with the help of the Brihanmumbai Electric Supply and Transport (BEST) and the traffic police. The quality AC buses under this scheme aims at providing comfortable commuting experience along with facilities such as coat hangers, laptop plug-in points, special handles, route maps, etc.
Currently, the BEST has 290 AC buses on 28 designated routes, which are incurring heavy losses. According to the MTSU draft plan, these routes need to be rationalized and some of them could also be converted to point-to-point services, as a pilot project.
Before launching the service, MTSU will carry out a survey to ascertain number of trips, routes, frequency of service and other information. Based on the finding fare rates and the service plan will be finalised. MTSU has also planned to collect data, through a survey, from corporates and their employees. It plans to get the data from the corporate sector executives who are presently driving their own vehicles to work as well as other potential AC bus service users travelling from large housing colonies or the vicinity in present public transport.
Sudhir Badami, a transport activist, feels that such dedicated service could also pave way for Bus Rapid Transport System (BRTS). “The plan is good but they should ensure frequency and consistency to avoid drop out of commuters. In my opinion, when the affluent will start using it, they will definitely ask for these buses to come on priority. Hence the coming of BRTS and others services such as dedicates airport shuttle.”
In fact, Moneylife had campaigned to start a dedicated public bus transport with adequate luggage space to the Mumbai Airport. Moneylife Foundation, a not-for-profit organisation, drafted a memorandum with the help of experts on transportation, who unanimously supported the idea of starting an air-conditioned public bus service on a priority basis. The memorandum was sent to the BEST and to the state chief minister. Moneylife Foundation submits memorandum to BEST, CM appeals to start air shuttle for Mumbai Airport.
However, BEST instead of calling discussion on starting such project, has have ruled of any possibility of starting it. It also failed to address the core issue raised by Moneylife. BEST uninterested in starting airport shuttle service
Meanwhile, PTI reported a statement from CM’s office which said that, “Those interested in availing the services will have to go on www.bestcommute.org and fill an online form. Information regarding the new bus service is being provided to companies and corporate offices. Those interested in getting more information about the scheme will have to send their inputs on [email protected].”