As a counsellor at Moneylife Foundation, I encounter innumerable cases where bank customers have a harrowing time getting issues resolved. I completely empathise with them, given the problems that I have faced with a bank that I served for nearly three decades, despite my knowledge of core banking. Let me narrate what happened to me.
Last year, I was on a three-month holiday in a small city called Al Kharz in Saudi Arabia with my daughter, son-in-law and cute little grandson. One fine morning, I received a call from the Opera House branch of Bank of Baroda (BoB), Mumbai. The officer informed me that due to my resignation, I was not eligible for the extra 1% interest for staff. The internal auditors had, therefore, advised the bank to recover the excess interest paid on my fixed deposits (FDs). The amount was Rs1.62 lakh. I was very disturbed but not particularly shocked.
I had already taken up, with the top management of BoB, the issue of retaining my eligibility for higher interest, considering my 29 years of service and overall contribution to the Bank. I had pointed out that BoB offered some of these facilities even to officers who were compulsorily retired due to misdeeds. My request was fair and very small in monetary terms (to be paid a 1% extra interest rate as applies to staff). The response came in late and was negative, as expected.
The officer wanted to mark a lien (to recover excess interest paid) on my savings account, but the balance was insufficient. I offered the Bank an option to mark a lien on two fixed deposits (FDs) amounting to Rs2 lakh, due to mature on 26 October 2022, along with seven more FDs (a total of nine FDs). The Bank could easily have recovered interest from these two FDs on the due date. The officer agreed and marked the lien. I also requested him to send an official mail with details of recovery. I received the mail on 27 July 2022.
After returning to India before the Ganpati festival, I visited the branch to ensure that there was no problem with the instructions. Our family had planned a Kerala tour from 26 October 2022, a bank holiday. Therefore, I submitted all nine duly signed FDs with instructions to transfer the maturity proceeds to my savings account a day before the trip (25 October 2022). I had a written, personal request to take necessary action, since I was going out of Mumbai. The Bank accepted all the FDs and, while I was on holiday, I also received seven text messages closing the FDs which were free of lien; the principal was duly transferred to my savings account.
I was expecting messages for the two other FDs which were marked with a lien. Since I did not receive them, I assumed BoB had made the required lien recovery. While reviewing my savings in the Bank online, I observed that the details of the two FDs in question were misleading. They had been auto-renewed on 26 October 2022 for a further period of 10 years. Both FDs still carried a lien with an outstanding amount of zero in one FD and over Rs38,000 in another FD.
My passbook showed that the Bank had recovered Rs1,686 towards shortfall in another FD, and my savings account was 'debited' with Rs682 towards saving bank (SB) interest! Two complaints lodged online on the BoB portal were, subsequently, closed one-sidedly, except that for savings interest, the mail clarified "Excess interest paid in previous quarter (i.e., 22nd August to 22nd October) now adjusted."
I prepared an Excel sheet proving that the interest was credited at 2.75%pa (per annum) was correct and that the Bank should not have recovered any amount. I received an email statement with many columns that contained an amount of Rs682. When I sought an explanation from the branch, they had no answer.
Since I had been instrumental in branch automation and migration to the core banking solution, I was aware of certain back-end procedures; I was also aware of the consequences if the back-end updating is not done in the right manner with all the relevant and integrated data tables.
I suspected that this problem occurred due to a faulty updating that reduced the rate of interest on my FDs. In an email to BoB's senior management, I wrote that the data centre could have written a small program to set aside the extra interest as 'lien' whenever credited, and the total lien amount could have been recovered at the time of maturity, instead of updating the rate of interest from the back-end.
I kept following up with the Bank through personal visits and emails, trusting that the organisation I served for 29 years and providing me with bread and butter would help. But I received only empty assurances. So, I escalated the matter to the regional head and then to the zonal head, who kept mum even after the third reminder.
I was only informed that certain general ledger (GL) and profit & loss (PL) account heads were required to be relaxed to pass the necessary entries and that the branch had initiated the process. The GL and PL heads are locked to avoid any direct debit, credit, or mischief, and there is nothing wrong with such rules.
I waited for another 11 days and then wrote a sarcastic note - "In the past, the bank must have relaxed certain GL and PL heads for writing off 'small' amounts in non-performing assets (NPAs), which was a loss to the bank. In my case, the bank has yet to relax certain heads even when it was going to earn a 'huge' amount of Rs1.62 lakh as recovery."
There was another incident in April this year. My wife and I opened two senior citizens savings scheme (SCSS) accounts with the same BoB branch for RsX and RsY, respectively. That evening, I received a call informing me that though both the accounts were opened, the amounts were wrong i.e., RsY for my wife and RsX for me! Regretting the issue, the officer said that correcting these mistakes was difficult because they were government accounts and requested my cooperation. I readily agreed. I reminded the Bank in an email (on 16 May 2023) that, although I cooperated with the Bank when they asked me to, my long-standing issue had not been resolved. This finally worked and most of my problems were taken care of within two days.
I could understand and resolve this complex issue because I started my career in a manual environment, which ensured that my basic banking and accounting concepts are very clear. I doubt that a lay account-holder would have got a resolution.
I have yet another issue pending in connection with the debit of interest to my daughter's savings account. I wrote to BoB on 27 May 2023 seeking a written acknowledgement of having recovered excess interest paid earlier and that nothing further is due from me. I have sent one reminder already, and do not know how many more would be required to ensure this is done!
If this is what happens to a bank employee with knowledge of its tech department, what would happen to others? Shouldn't 'ease of doing banking' be a crucial part of ease of living and way ahead of ease of doing business?
(Retired banker Abhay Datar is a consumer activist and an expert counsellor at Moneylife Foundation. He was a member of the Managing Committee of Mumbai Grahak Panchayat (MGP) and also the treasurer at MGP for over two and a half years. After working at Bank of Baroda for 29 years, he retired as IT Manager. Mr Datar has resolved many cases related to banking and has also handled cases related to insurance and mediclaim.)