Falling Standards of SBH Branches
Falling Standards of SBH Branches
I was reading an article about improving customer service at ATMs, when I thought I should share my forgettable experience with State Bank of Hyderabad (SBH), a few days ago. It was a long painful story which stretched for three days in the hot sun with loss of precious hours. But I will summarise the key issues below:
 
1) One branch was not accepting cash deposits to non-home branch accounts. I wanted to deposit money to a friend’s account in Vizag from Hyderabad which was rejected.
2) Another branch was forcing me to use the recently rolled out Green Channel.
3) If I did not, I was asked to deposit money through GeoSansar and incur additional transaction charges (I visited a GeoSansar branch which was bang opposite the branch).
4) ATMs are horribly maintained, without any security or swipe card for entry.
5) The branch deputy manager, instead of helping me out, was asking me to open an account with their branch (I was there to deposit a sum of Rs9,500 into a friend’s account).
 
I am not sure if this is happening only in Hyderabad or across India. Branches need to educate customers about why Green Channel was introduced rather than force customers to use it (I had no cash left in my debit card as I had already withdrawn it for this transaction). All this lowers the way people view public sector banks in India.
Raghavendra Kopalle, Hyderabad, by email
 
Not Enough Doctors
This is with regard to “Are modern hospitals death traps?” (Moneylife, 15 May 2014). The recent Supreme Court judgement awarding a sum of Rs6 crore as compensation for medical negligence by AMRI Hospitals is most appropriate. Quite often, doctors are negligent in discharging their duties which can result in fatal consequences.
 
Government hospitals are not commercial; but they are unable to cope with the heavy rush of patients. Healthcare and medical help must be available to all citizens free of cost, especially to senior citizens; contributions towards this can come from a fund created by the Central government/ state governments through a portion of income-tax and other taxes. Private doctors and hospitals, too, must offer senior citizens at least 50% concession.
 
An adequate number of quality hospitals and nursing homes must be opened in every corner of India. The younger generation must be encouraged to opt for the medical profession as there are not enough doctors for our overpopulated country.
Mahesh Kumar, by email
 
Pressure On Supreme Court Judges?
Media reports about the judges of Supreme Court Division Bench are talking of pressure in the hearing of infamous Saharashree-case. One member of the Bench has now retired and the other has expressed a desire to recuse himself from the re-constituted bench to hear the case. It is, indeed, a cause of worry. We need the independence of judiciary. Allegations coming directly from the concerned judges need a proper investigation by the Chief Justice of India.
 
To effectively check such incidents, it becomes necessary to take urgent measures for a final decision on long-pending appeals filed by Supreme Court registry before Supreme Court itself against verdicts of Central Information Commission. A division bench of the apex court had desired, long back, on 26 November 2010, the constitution of a larger bench to decide the multiple issues which also included the similar matter of pressurising judges of higher courts.
Subhash Chandra Agrawal by email 
 
Need of Indians
Moneylife  has great articles, researched reports, interesting editorials and write-ups about personal finance, business, etc. It has a very nice interface for MSSN members. The Stockletters and Investool are useful.
 
In all, I feel elated and I am prepared for better financial future. Each day, I spend 30 minutes on the Moneylife website. The best part is that Moneylife is like a shelter home for distressed souls, like me, who have so many questions. There is a logical line of thought that needs to be approved or second consulted.
 
One can breathe easy, feel light as Moneylife is  packed with solutions to make right moves in today's corruption-ridden business,  paid media, misleading and flashy advertising of financial products. Moneylife makes financial jargon easier for readers and gives them practical tips.
 
I believe it is the great effort that Moneylife’s team puts into research that brings out Investool, Stockletters and great stories (articles).
 
Kindly bring out something about Chanakya’s Arthashastra and its relevance in Indian economy and personal finance in future editions. As people claim to know Chanakya’s Arthshastra but they are not able to put it across well to the audience.
 
I hope Moneylife team will be able to do this in its future editions. I sincerely hope that the Moneylife team will continue to work on research and enlighten the readers to get hold of facts from fiction. This is because it is the need of Indians in personal finance.
Madhur Aggarwal, by email
 
Savings Habit
This is with regard to “Now, children above 10 years can operate own bank account, ATM card”. Could not be better for ensuring the savings habit. But, the lawyer takes over. What about bouncing cheques? A minor cannot be prosecuted. Therefore, the chequebook needs to mark out that this is a minor’s account, next to the account-holder’s printed name. ATM card for such accounts is a bit of a worry. Kids may be harassed by their seniors; maybe even kidnapped. If a maximum amount per day is fixed, it may or may not help. Frustrated crooks, often, turn violent.
 
Yet, with safeguards, the habit must be encouraged. 
Bapoo M Malcolm
 
Concerns Adequately Addressed
This is with regard to “An Open Letter to CEC on electoral reforms” by Dr S Santhanam. As one who has read and reviewed Dr Quraishi’s book, I would say almost all the concerns have been adequately addressed.
Nagesh Kini
 
Block headed mindset
This is with regard to “Life Insurance: Mis-selling of Term Plan with Return of Premium” by Raj Pradhan. The question that we need to ask ourselves is: "Why are companies coming up with premium return plans at all?" The simplest answer seems to be the blockheaded mindset of the consumer who doesn’t want to pay for a service and wants to get everything free. As long as people don’t recognise the fact that they have to pay for the service that they want, no point in blaming companies. If greed is there, consumers will get cheated.
Chilukuri KRL Rao
 
Can You Time The Market?
This is with regard to “The Bull Rule: Your key to market-timing” by Debashis Basu and Jason Monteiro. This is one of the best articles one has ever read on Indian equities. Interestingly, every wealth management expert, especially HDFC Securities, denies outright that you can time the market. This is done with the intent of looting clients. Moneylife is the only magazine that keeps emphasising that you need to buy at the right time and sell at the right time.
Suiketu Shah
 
No Experience
This is with regard to “Beware of banks selling non-banking products.” These banks appoint relationship managers (RM) only to sell non-banking products to customers. These RMs have no experience of selling these products and land customers in a soup.
Doraiswami Sukumar

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Future Perfect?
Future Perfect?
 
The average saver is expecting sweeping changes over the next five years from the newly elected Modi-led government. There are numerous problems in this country which the resourceful can find their way around. But the middle-class, are powerless in the face of poor governance, capricious laws, apathetic regulators, and so on. 
 
The ministry of corporate affairs is another regulator that has made a mess of shareholders’ and deposit-holders’ interests. That apart, everybody faces harassment at some time or the other from the income-tax department, thanks to complex laws and draconian provisions. In our Cover Story, we have put together distilled thoughts of Moneylife writers in some of the key areas that matter. Please turn to page 28 for the article.
 
If the Modi government does take action to reform the public sector, currently beset by enormous sloth and corruption, stocks from this sector would be worth buying. There are a few mutual fund schemes, and a couple of exchange traded funds, that are dedicated to this sector; turn to our Fund Pointer section to explore these options. If you are looking to invest directly in PSU stocks, turn to our Value Picks section to discover undervalued stocks in this sector. 
 
Moneylife has long argued that investors have pulled out of the stock market because they have found it unsafe and manipulated, even as SEBI stood by and watched. Sucheta, in her Different Strokes section, questions whether investors will regain their confidence  and highlights the changes required to bring in better governance in the financial market.
 
As always, do write to us with suggestions and comments. From this issue, there is another fabulous reason to write in. We are introducing an excellent new prize for the winner of the best letter. It’s a fabulous personalised clock affixed on an imported piece of wood. Make your letter the winning one. The same prize is also available if you are the quickest with the correct answers to the quiz section. Take your chance!

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Are the Eurozone's problems over?
So the problems are over and Europe is on the road to recovery. Right? Well, maybe not. European sovereign debt is so large that they have to grow to keep their debt stable or impose even harsher austerity measures
 
Things looked bad. Yields of Spanish and Italian bonds were soaring. They were at levels that were over time unsustainable. Greece, Portugal and Ireland had all received bailouts. It looked like the Eurozone itself was close to extinction. Then in stepped Mario Draghi, the president of the European Central Bank (ECB). In July of 2012 he told the media “the ECB is ready to do whatever it takes to preserve the euro”. Then he added, “believe me, it will be enough.” Things began to look up.
 
After a few negative quarters, by the middle of 2013 the Eurozone economy began to grow slowly. As mild growth kicked in, the cost of borrowing, especially for the hard hit peripheral economies, began to drop rapidly. Both Ireland and Portugal have exited their European Union (EU)/ International Monetary Fund (IMF) bailout packages. Greece insists that its economy is strong enough to make a third bailout unnecessary.
 
Ireland’s recovery is rather amazing. In 2011, it was forced to pay as much as 11 percentage points more than the UK to borrow money. Now its borrowing costs have fallen below the UK for the first time in six years.
 
As interest rates fell, rating agencies took notice. Spain’s credit rating was raised from BBB to BBB+. The outlook for seven of the Eurozone countries including Portugal, Ireland, Germany and Italy moved from negative to stable. Even Cyprus has recovered sufficiently to have its outlook raised to positive.
 
Manufacturing Purchasing Managers Index (PMI) is an economic indicator of the economic health of the manufacturing sector. PMI of more than 50 represents expansion of the manufacturing sector. The PMIs for the Eurozone countries have been rising steadily through April. The composite Eurozone Manufacturing PMI hit 53.4 in April but backed off to 52.5 in May.
 
So the problems are over and Europe is on the road to recovery. Right? Well, maybe not. There are some major problems that have not been solved. The largest is France. France is stagnating. Finland, Netherlands, Italy and Portugal’s GDPs have all turned negative. Inflation barely registers.
 
Normally a slight contraction in GDP would not be a problem. But in Europe it is a big one. The problem is that European sovereign debt is so large that they have to grow to keep their debt stable or impose even harsher austerity measures. Italian debt grew from 127% of GDP in 2012 to 132% in 2013, despite the fact that their deficit was only 3% and their primary fiscal surplus before interest was 4.7%.  The same problem exists for the other peripheral countries. Ireland’s sovereign debt is 124% of GDP: Portugal at 129%, Spain’s is 94% and Greece at 175%.
 
In light of the slow or no growth and the rising debt levels, their bonds look decidedly frothy. Portuguese bonds carry a junk rating. Still their 10 year bonds offer a yield less than triple A rated Australian bonds. Greece owes huge amounts to the EU and the IMF, but can borrow for five years at 4.95%. Ireland’s 10 years notes demand only 2.89%, only 36 basis points higher than US Treasuries. Meanwhile triple A rated New Zealand has to pay 4.2%. Valuations of equities are also bubbly. They reached an all time high just last week.
 
The US hasn’t helped. Despite almost unanimous predictions, US interest rates fell this year. This has weakened the dollar and strengthened the Euro. European countries, especially Germany, are far more dependent on exports than the US. A strong Euro eating into their competitiveness definitely doesn’t help.
 
The banks are also having problems. Impaired loans rose 8.1 % to over €1 trillion since last year. Like most banks they were under recognizing bad loans. Fortunately their loan reserves have been rising, but this has put a further crimp in lending. Without new lending it is difficult to gain any growth or put a dent into unemployment rates, which are still above 20% in both Spain and Greece.
 
Part of the froth in the equity and bond markets is again the result of statements by ECB president Draghi. He has told the markets there will be some sort of simulative action taken at the next meeting of the ECB. But what? The hope of a European Quantitative easing (QE) is off the table, because buying more Greek bonds does not sit well with the Germans. There is some speculation about negative interest rates, but there is also a question as to whether these would even work.
 
While it is possible that the recent pull back in European growth is temporary, the bar for sustainable growth is quite high. Like most countries in the present market, there is remarkable faith in the monetary management of central bankers. So much so that Europe still has not made the crucial structural reforms necessary to fix its multiple problems. With equities and bonds at extreme heights, some sort of correction appears to be inevitable.  
 
(William Gamble is president of Emerging Market Strategies. An international lawyer and economist, he developed his theories beginning with his first-hand experience and business dealings in the Russia starting in 1993. Mr Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and speaks four languages.)

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COMMENTS

SuchindranathAiyerS

3 years ago

The "West" needed to meddle in Ukraine like it needed a hole in the head: I thought it was "Russian" roulette?

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