The banker and author of three best-selling books says banks and relationship managers often indulge in cross-selling to earn more revenues and, therefore, the customer has to be more careful while dealing with them

"A customer can protect himself from falling into the hands of mercenary bankers by being alert, vigilant and at the same time doing due diligence," said Ravi Subramanian, banker and author, at an interactive session organised by Moneylife Foundation in Mumbai on Tuesday.

Speaking on 'How to see through the hard-sell of banks', Mr Subramanian said, "Bankers become 'bhayankar' when they fail to deliver what they have promised and try to hard-sell products on which they earn more money to the gullible customer."

Mr Subramanian has written three best-selling books, 'If God Was a Banker', 'I Bought the Monk's Ferrari' and 'Devil in Pinstripes', all from an insider's perspective from his nearly two-decades career with foreign banks.

Asking the audience whether they had a clue about the long queues at banks, or why customers calling were made to hold on for a long time, he explained this as a deliberate ploy to cross-sell by bank employees with the result that the end-customer suffers.

Mr Subramanian took up numerous examples of hard-selling by banks, like selling gold. He said it was not wise to buy gold from banks, as not only is gold cheaper (by 4.5%) from a branded jeweller or the neighbourhood goldsmith (14%), but banks do not buy the gold back if ever the customer required the money.

Mr Subramanian is an alumnus of IIM-Bangalore, who has worked with Citibank and Hong Kong and Shanghai Banking Corporation (HSBC).

He also talked about new fund offers (NFOs) that are often pushed by agents as "very good". "Banks and relationship managers often push NFOs, not because the new offer is very good, but because they can earn more money by churning. In any case, banks make more money, sometimes as high as 5% to 6%, from the asset management companies (AMCs)," Mr Subramanian said.

The workshop was well-attended, with several Moneylife Foundation members among the participants. The session turned out to be very interesting with Mr Subramanian addressing questions raised by the audience right through his presentation.