In a country like ours, where a large part of our population is outside the ambit of banking with no access to basic banking facilities, it is unwise and undesirable to restrict the usage of banking facilities and impose upon them banking technology which is yet to penetrate into the minds and hearts of the people
A discussion paper on “Dis-incentivising Issuance and Usage of Cheques” (available for comments up to 28 February 2013), put up by the Reserve Bank of India (RBI) on its website, is a classic example of putting the cart before the horse. Because there are problems galore in the electronic payment system, and even before stabilising this, the RBI wants to dispense with the cheque system. If the same objective of reducing usage of cheques can be achieved by incentivising the usage of electronic payments, why not try this positive method, which has more acceptability and receptivity, instead of going in a negative way for achieving the same results?
The present discussion paper appears to be a purely in-house exercise of the RBI, done without any appreciation of the ground realities and the psyche of the people affected by it. It is complete negative thinking and devoid of any consideration for the financially, technically, virtually and literally less-literate people of our country who happen to be in large numbers. Hence if the proposal contained in the discussion paper, is implemented, it will only result in going back to the days of cash transactions, as people will prefer settlement through cash instead of suffering under the half-baked and mal-implemented technology in our banking system and the poor service extended by banks in the name of automation. It is to avert this situation, the following suggestions are made and hopefully the RBI will reconsider its proposal and take a positive view in the interest of a large majority of banking public affected by this proposal.
Before dis-incentivising the usage of cheques, let us take the following important steps to create an environment of bringing down usage of cheques slowly through the change in the attitude of users of cheques.
1. Perfect the present electronic payment systems
The most important thing is to make all electronic payment systems fool-proof and acceptable to all payers and receivers who should be satisfied with the 100% safety of the system and acceptability in settlements of all dues without any question at a future date. Unfortunately, banks are not giving enough importance to these aspects, resulting in the consumer not developing enough confidence in the system to rely upon in case of need. Therefore, the imperative need is to perfect the present electronic payment systems, which require a lot of improvement both in their form and content. The account numbers in all the banks are to be standardised, the multiple systems’ code used in all these payment transactions are to be harmonised into a single code for all payments, including international remittances. NEFT requires to be merged with RTGS to make the former too a real time payment system and to ensure its simplicity and robustness.
In the good old days of manual banking you used to receive a handwritten credit advice for every credit or debit affected in your account. With the advent of electronic banking, such credit and debit advices are lost in the jungle of computers. You now get an entry in your pass book with a reference number of the transaction, which does not make any sense to the account holder. Earlier, reading the advice was a problem due to the illegible hand writing, today you do not even get any information about the purpose of debit or credit entry. Recently, when a senior citizen went to his bank and got his pass book written up, he found a credit entry for which there was no explanation. When he asked for the name of the remitter, the clerk did not provide any information saying that it was not available on his computer. Only when he raised his voice, the branch manager came out and helped him with all the details, culled out from the same computer. This is the level of service you get from the computerised bank branches today. The RBI should first ensure that full details of remittance are furnished—without asking—to the remitter and the beneficiary for all electronic receipts and payments made through banking channels, as these details are vital for all businesses and individuals for tax purposes.
The technology used by different banks for different channels of payment are so wide and varied that it is virtually impossible for a layman to be abreast with so many changes taking place so fast. Today electronic payment is provided through multiple channels like internet banking, core banking, ECS, mobile banking, ATMs, and through the counters of branches but each bank follows a different method of operations. Hence, there is a need to standardise these systems in all banks, so that banking public can use them with ease. There is a further need to ensure that all the applications, advices, etc are standardised in all the banks to make it simpler for the common man to follow them without much confusion.
2. Make all electronic payment channels free of all charges
There are several electronic payment channels today and for every channel there are different charges levied by different banks according to their own fancy, without any regard to the cost of operations. Under core banking you can bank with any branch of a bank as all branches are interconnected through computers. But many banks do levy a charge if you deposit a cheque or cash at any branch other than the home branch. In order to encourage more and more people to go for electronic payment channels, as a first step, the RBI should direct that all remittances made using all types of electronic payments either online or through the counters of the branches of banks, must be free of all charges, in order to change the psychology of people by making available these services without any costto the users.
3. Incentivise all types of electronic payment systems
If you see the chart No.2 displayed below culled out from the RBI discussion paper, it is obvious that in terms of volume, the use of paper payment system (blue shaded) has remained almost stagnant for the last five years, though the additional volume has been coming from the electronic payment system. This is because the chronic semi-literate banking public continue to follow the old system of payment through cheques and therefore the immediate task of banks is to convert these core users to the new system by offering them all types of incentives and goodies outlined here, instead of forcing them into electronic systems much against their free will.
Do not rock the boat of livelihood of small traders and businessmen
A little known fact of life is that many small businessmen, petty traders, micro and mini industrialists do their business successfully by using cheque leaves as security for taking delivery of goods and or selling their products on credit, thereby earning their livelihood with integrity and honesty all over the country. Moreover, cheque leaves come handy for running their business during weekends or prolonged bank holidays, as they can take delivery of goods by tendering cheques, which keeps the supply side of essential goods running for the benefit of common people who depend on petty traders for their daily needs. And any restriction on usage of cheques will, therefore, be not only detrimental to their interest, but a great blow to their livelihood as well. It is therefore, not in the interest of a large majority of our people to create artificial barriers in the smooth running of their business and trade, by making it difficult to use the facility of cheques, which have gained credibility after the amendment to the Negotiable Instruments Act, making bouncing of cheques a criminal offence.
In a country like ours, where a large part of our population is outside the ambit of banking with no access to basic banking facilities due to illiteracy, lack of banking facility, sparse penetration of broadband technology in the countryside and very limited financial literacy, it is unwise and undesirable to restrict the usage of banking facilities presently enjoyed by the people and impose upon them banking technology which is yet to penetrate into the minds and hearts of our people. Let all our banks concentrate and dedicate themselves to the cause of financial inclusion and spread banking through education, motivation and persuasion following a path of least resistance to make access to banking facility to our billion plus people a reality at least by the end of this decade.
Let not irrational exuberance of a few technically knowledgeable people play havoc with the large majority of our countrymen and women, who need empathy as well as sympathy in carrying on with their day-to-day life with understanding and peace of mind. Let us, therefore, give the discussion paper a decent burial at least for the time being and think of what positive steps can be taken to prepare our people for a slow but sure technological change, though it may take a little longer time to achieve the objective which has given birth to this idea of new age banking.
(The author is a banking professional and he writes for Moneylife under the pen-name ‘Gupur’.)
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In 2009, ProPublica identified more than thirty prisoners once held by the CIA who weren't accounted for. Since then, a few have resurfaced and many remain missing
In one of President Barack Obama first acts in the White House, he ordered the closure of the CIA’s so-called “black-site” prisons, where terror suspects had been held and, sometimes, tortured. The CIA says it is “out of the detention business,” as John Brennan, Obama’s pick to head the agency, recently put it.
But the CIA’s prisons left some unfinished business. In 2009, ProPublica’s Dafna Linzer listed more than thirty people who had been held in CIA prisons and were still missing.
Some of those prisoners have since resurfaced, but at least twenty are still unaccounted for.
Last week the Open Society Foundations’ Justice Initiative released a report pulling together the most current information available on the fates of the prisoners. A few emerged from foreign prisons after the turmoil of the Arab Spring. One has died. (The report relied exclusively on media accounts and information previously gathered by human rights groups. The Open Society Foundations also donate to ProPublica.)
The report counts 136 prisoners who were either held in a CIA black site or subject to so-called extraordinary rendition, in which detainees were secretly shipped to other countries for interrogation.
Many of the prisoners were tortured, either under the CIA’s “enhanced interrogation techniques” program or by other countries after their transfer. The report also lists 54 countries that assisted in some way with detention and rendition. The U.S. has not disclosed the countries it worked with, and few have acknowledged their participation.
The CIA declined our request to comment.
Here are the fates of a few of the prisoners we listed as missing back in 2009:
The whereabouts (and in some cases identities) of many more remain unknown or uncertain.
In 2007, then-CIA director Michael Hayden said that “fewer than 100 people had been detained at CIA’s facilities.” But only 16 have been officially identified by the U.S. government. President George W. Bush acknowledged the CIA’s detention program in September 2006 and announced the transfer of 14 “high-value” detainees to Guantanamo Bay prison. Two other high-value detainees were subsequently acknowledged.
Much else about the CIA program is still unknown. President Barack Obama closed the black-site prisons on entering office, but preserved the ability to render and to hold people for the “short-term.”
Obama banned torture, but announced that no one would be prosecuted for previously sanctioned harsh interrogations. A Justice Department investigation into deaths of detainees in CIA custody ended without charges.
The Senate Intelligence Committee recently completed a 6,000-page report on the CIA’s detention program. At Brenan’s confirmation hearings, Senator Jay Rockefeller (D-W.V.), said the report shows the interrogation program was run by people “ignorant of the topic, executed by personnel without relevant experience, managed incompetently by senior officials who did not pay attention to detail, and corrupted by personnel with pecuniary conflicts of interest.” Rockefeller is one of the few to have read the report, which remains classified.