Receiving money through NEFT can put you in trouble

Despite directions from RBI, banks refuse to share details of the entity sending money through NEFT

 

The National Electronic Fund Transfer (NEFT), used by almost everyone to transfer money quickly, can also put the receiver in a difficult position. The main reason is, there are no details available about the remitter or sender and if the amount is large, then the recipient may end up facing Income Tax (I-T) Department queries. Remember what happened with Aishwarya Rai, when in 2006 she received a parcel containing 23,000 euros (around Rs14 lakh at that time) sent by an unknown person from the Netherlands?

 

Well, with banks hesitating in sharing details of the person or entity who is transferring money via NEFT, it may be you next time. Although the Reserve Bank of India (RBI) has directed banks to furnish appropriate details in passbook or account statement for credits sent and received by the customer through NEFT, all the recipient gets is just a name and amount. “A very generic mention as 'NEFT' or 'NECS' does not help customers in identifying the source of credits, particularly where multiple credits are afforded to their accounts through these products. The Core Banking Solutions (CBS) of banks should be enabled to capture complete information from the relevant fields in the messages, data files which can be displayed to customers when they access their accounts online or provided to them additionally when they approach the branch counters, help desks, call centres,” the RBI had said.

 

However, all the recipient gets to know is just a name. There are no details like sender’s PAN number, address and the cause/remark for the money transfer.

 

Often money launderers are found using bank accounts of low-income individuals for transferring money. In addition, due to the forceful implementation of the Jan Dhan Yojana, we have about 10 crore new bank accounts, out of which 73% do not have a single penny. But consider that tomorrow, if somebody uses these accounts to launder money, then without detailed information about the remitter, how is a poor Kalawati supposed to answer queries from the authorities, including but not limited to I-T department. In the absence of detailed information about the remitter, how will she explain the unaccounted money remitted into her account through NEFT?

 

Receiving funds from unknown remitters becomes an even bigger issue for non-governmental organisations (NGO), who need to give a receipt as well as I-T exemption certificate. If there is just a name of the remitter, how and where is an NGO, like Moneylife Foundation, supposed to send the receipt?

 

Another issue with NEFT fund transfer is the delay. According to RBI policy, banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. It also directed banks to move towards hourly settlement starting from 9am to 7pm on all week days and between 9am to 1pm on Saturdays. Yet, it appears that banks are still using the last part of the work-day or first hour of the next day for NEFT transactions.

 

Coming back to the Aishwarya Rai episode, the actor was grilled by the Customs official for two-and-a-half hours at the international airport as soon as she landed in Mumbai from Jodhpur. The parcel was allegedly sent by one Avineshwar from the Netherlands marked to the actress. It arrived at the Foreign Post Office in Mumbai during September 2006. Besides the currency, it also contained a top-brand shirt, a pair of binoculars, a DVD player and other electronic items. Following a notice, Aishwarya's father Krishnaraj Rai, on 15th November met Custom officials to clarify her position. However, the officials insisted to know details from Aishwarya, due to which the actor had to come to Mumbai to clarify her position. She was shooting for the movie 'Jodha Akbar' in Jodhpur at that time. After the enquiry, she was give a temporary clean chit by the Customs.

 

Therefore, it is high time the central bank issues another order mandating banks to share all details of the remitter who is sending money through NEFT or any other payment method to the recipient and actually penalises banks if there are persistent complaints about flouting the RBI’s order.

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COMMENTS

pavithra k

1 year ago

NEFT

Dipak Shah

1 year ago

Since Government is also encouraging Digital Payment then what is this?

Sanjay phukan

1 year ago

I want a lot of real cash rupees

Gopinath

4 years ago

1. Banks should be made accountable for investigation in every fraud arising out of cheque bounce. Other wise they will keep on issuing cheque book to every unreliable person. Actually they should ban the cheque felicity to that account holder for life time and Tag it to his PAN no so that he cannot get it in any other banks if he bounces his cheque 3 times. If it is implemented 50% of our all court cases will get reduced.
The whole country will feel proud of the system.

R S Murthy

4 years ago

Banks are fully aware of KYC rules and procedures. While opening the accounts are they not seeking address and identity proof?
Banks are not supposed to receive Rs.50000 or more in cash form for remittances without the PAN number. All single remittances of over 10 lakhs comes under scrutiny. In all remittance challans there is a place for the signature, name & address of remitter. Usually depositor himself deposits into his acount, he signs and writes his name.
When 3rd party deposits banks can easily verify the details and pass on them to the beneficiary. If banks are doing so it is nothing but negligence and derliction of duties. Even on our specific request if banks fail to provide we can always approach Ombudsman.
Still banks fail to provide or refuse to provide details, we can inform that the bank is remitter and make them a party in the proceedings initiated by Tax authorities. Then it is for the Banks to prove who is the real remitter.

REPLY

MDT

In Reply to R S Murthy 4 years ago

Thanks for your comment.
And thank god, finally you saw the light after the barrage of your comments. The article also say that banks should share complete details of remitter to the beneficiary. This exactly is not happening at present. In addition, when there are few remitters, then you may not face any issue, but when there are several remitters, then how would an individual or NGO is supposed to chase each one if banks fail to provide details?

R S Murthy

In Reply to MDT 4 years ago

I could have replied in one lot all the points. It becomes lengthy. That is why I choose to put it in stages. Opening of an account is a contract between the customer and banker. Customer is entitled for certain benefits and priveleges and banker is entitled for certain charges. What all I do with my account say deposit and drawl, I do not need any details from the bank. If banker debits my account with charges, credits with interest or outside remittance, banker is duty bound to provide all particulars. Banker will not get unquestionable right to play with my account. If he is not taking care to protect my interests, I can always hold him responsible. We remit LIC premiums, electricity charges, property tax, telehone bills on line.The details of the remitter and his policy number, telephone no is provided to the beneficiary. This enables the beneficiary to account for properly. Then why not in the case of NEFT? We have to counter the bankers with valid reasons. They have to comply. No exscape. Whether it is one remitter or many, banker is bound to provide full deetails when he has choosen to touch my account. When I touch his ATM is he not asking for charges. Then how can he get away after medling with my account.

lamp

4 years ago

This is a really issue, some organisation to evade income tax or TDS payment to employees , are resorting to transfer the salary from third-party account into the employee account , where employee is in a fix on how to file his income , do we have some mechanism to monitor this, expose this ?

Peruvemba Subramanian Ramachandran

4 years ago

This is all the more true for organisations, whose members use NEFT for paying subscriptions or members or subscribers to magazines,etc. the amount being a fixed sum, one is hard pressed to identify the amount to the correct subscriber/member. I had experienced for the last 2 years from a Nationalised Bank, in respect of our coop society membership subscriptions.

Suketu Shah

4 years ago

NEFT has the loopholes mentioned but let us not overlook the fact that this was created by Congress led Chidambaram and not BJP.This means Congress created these loopholes.Let us give BJP some time to plug those loopholes.The article has valid points but bottom line is this problem has been created by Congress when they launched NEFT a few yrs ago.

R S Murthy

4 years ago

All readers kindly go through the news item appeared in Times of India on 6th January 2015.CBI collected data from 20 states and 7 UTs and found that there are 22,45,655 NGOs operating. Of these2,23,478 (just less than 10%) had filed their annual returns. This does not includes details from MP, Odisha, TN, Karnataka and Chattisgarh. Shall we accept nonavailability of details of remitters be the reason for not furnishing the accounts. One can imagine what sort of remittances are flowing through NEFT or RTGS into these accounts.NGOs are not celestial bodies to remain free from any regulation.

REPLY

Gupta

In Reply to R S Murthy 4 years ago

Valid point. Charities/NGOs are a popular mode of money laundering. But that is precisely whey details of sender should be available on NEFT/RTGS so that these laundering NGOs cannot claim ignorance about sources of funds...

R Balakrishnan

4 years ago

A debate is not warranted at all. Simple disclosure of who has sent the money. Absolutely essential and if PMLA is to be followed in spirit and letter, banks must disclose this as a matter of routine. Banks unfortunately are the biggest agents for laundering.

Dipakkumar J Shah

4 years ago

Now in the name of PSB Merger , State Bank of India with their associates Bank like State Bank of Bikaner and Jaipur reduced their FDR Rates in two way and side. One way resuced the FDR Interest rates in line with SBI Rates , and second way reduced Senior Citizens additional rates which were given herebefore 0.50 % now reduced to 0.25%. At the time of Presentation of Budget it was assured to give 1 % additional rates of interest to seniors. But now reduced to 0.50 % and reduced further in line with SBI 0.25%. This is a one kind of Reducing the Competition between Bank to Bank which was here before!!
CCI is not observing any thing from such action !!!!!

Anil Gidwani

4 years ago

Very timely article. We in India do not understand the need to question deposits into our accounts, which is also used to create legal rights (as for example an illegal occupant depositing in a society's account). Even deposits should be allowed to be restricted to deposits with the account-holder's signature only.

Another commenter said that the account-holder should have the right to return the deposit. How can that happen if the deposit is in cash with an unknown signatory?

An easy way to get someone in trouble: deposit black money into his/her account!

REPLY

R S Murthy

In Reply to Anil Gidwani 4 years ago

Mr.Anil, one has to be very careful particularly with his bank account, constantly keep a vigil. With regards to your question of depositing cash by an unknown person, If banker is specifically requested by the customer to reverse the entry, they have to comply. What they do with that amount is not my look out. Let them keep it with them or return to the remitter or deposit into Government Treassury. Why we should bother. Any credit into my account should come from the persons or sources, I am entitled to get. My account is not a dust bin where any one can dump any rubbish. If once I reject the credit, I am not answerable to anyauthority as I am not the owner.

Dipakkumar J Shah

In Reply to R S Murthy 4 years ago

While giving services to customers , who can view their accounts all over the world. It is restricted by not allowing direct view from net banking!!!!

R S Murthy

In Reply to Dipakkumar J Shah 4 years ago

My submission is one has to look into his own account and ensure all debits and credits are in order and explainable

R S Murthy

4 years ago

Mrs Sucheta Dalal, I know you are trying to provoke me. Kindly understand my bank account is my private property and not a parking place where any one can keep his idle funds. Moreover I am entitled to use money that belongs to me alone. I have no right to claim ownership for those funds for which I have no account. Moreover my account no is not publicised. It is informed to the people with whom I have dealings.
Now let us come to accounts like Money life where you publish the account number in media soliciting the contributions. When the details are required do not seek remittances through NEFT or RTGS. Receive only through cheque or DD. We are seeing the debates going on money laundering and still say the rules are draconian. Unless we support the law makers, how financial discipline be brought?

REPLY

Gupta

In Reply to R S Murthy 4 years ago

Just like people find it more convenient to buy things online, they also find it convenient to pay bills and donations online! Why take away the option from institutions doing good work. I'm certain that lot of people who currently pay online would not have enough motivation to write a cheque and send. That would kill such institutions. What is the harm in giving the sender's details to the receiver? If I send money to your account, point is taken that you should check and not use the funds. But it harms no one if you get my details along with the money. Hope you will agree...

Sushil More

4 years ago

Many times, the NEFT amount received does not inform the name of the sender. It merely states a number. How can anyone know the identity of the remitter and how to explain the same to Income Tax authorities.

Sucheta Dalal

4 years ago

Don't you think it is unfair and simplistic to extrapolate your situation to everybody else with out an attempt to understand the dimensions of the issue?

Moneylife Foundation legitimately receives donations through NEFT -- it is very convenient. As a tiny NGO we need the convenience. But we dont know who these generous donors are unless they write to us separately.
This is ridiculous and the law leaves us vulnerable to questions we cannot answer!!
Articles are written with an effort and because of genuine difficulties -- not merely because we have nothing to do one fine morning. Also, we have written it after many efforts at getting information and talking to the RBI about it drew a blank!
Maybe people need to join the efforts to fight wrong policies instead of knocking efforts without knowing the background.
I am sure my strong reply will immediately lead to the usual angry response from you -- but let me tell you in advance that such thoughtless comments made it very disheartening for activists to fight issues of public interest.

Personal Finance   Exclusive
Banks are ripping off Consumers in many ways. Will PM Modi & Arun Jaitley question them?

There is a growing sense of frustration among bank customers about the constant, stealthy increase in service charges. Strangely, RBI, the regulator is siding with the bank cartel. Will PM Modi and FM Jaitley pay any heed to helpless bank customers?

 

This weekend, Prime Minister Narendra Modi and Finance Minister Arun Jaitley along with Reserve Bank of India (RBI) Governor Dr Raghuram Rajan, will meet bankers in Pune at a two-day banker’s retreat. PM Modi is scheduled to interact with bankers on 3rd January. The Retreat would try to achieve a broad consensus on what has gone wrong and what should be done both by banks as well as by the government, among other issues. As usual, in such kinds of meetings, the customer or customer services side of the equation does not feature. It is important for PM Modi and FM Jaitley as well senior officials from Finance Ministry to understand and ask bankers present in the retreat, about the treatment meted out to customers and unfair charges levied by them for banking services. Banks are ripping off customers in a variety of ways: charges on automatic teller machine (ATM) transactions, higher debit charges, SMS alerts (that was a security feature initially), minimum balance requirements, ATM and debit card charges, cheque leaf charges, account closure charges, money transfer charges and so on.

 

However, so far the government has maintained a stoic silence. The regulator, Reserve Bank of India (RBI) has ignored all appeals and memoranda by consumer organisations, unions and non-governmental organisation (NGOs).

 

Finally, two lawyers have taken the lead in filing litigation — one in Madurai (Madras High Court bench in Madurai  and another at Delhi. The High Courts have taken prima facie cognisance of the issue and issued notices to the RBI and the Indian Banks' Association (IBA). Meanwhile, activist Nutan Thakur and ML Sharma have moved the Allahabad High Court on sale of insurance products by Punjab National Bank. This is also an issue that Moneylife has taken up in the past.

 

The RBI has decided to back banks’ move to charge for ATM transactions beyond a threshold limit despite protests by consumer organisations and depositors. The RBI has ignored all our memorandums  including the one sent jointly with trade unions and other consumer groups. Will Prime Minister Narendra Modi or Finance Minister Arun Jaitley ask bankers about this?

 

Even on the single point that was accepted out of Moneylife’s memorandum to the RBI, which was regarding the reporting system for non-working ATMs — the RBI has breezily entrusted it to the IBA, which will have minimal interest in setting up a system that will expose their own warts.

 

An official, writing on behalf of the Governor, said that RBI would ask IBA to “incorporate ways and means through which customers are enabled to report about ATMs which are not in working condition to the banks.”

 

Is RBI so naïve as to believe that banks do not know which of its ATMs are not functioning or have not bothered to load adequate cash? When the regulator supports a bank cartel by readily accepting their claims about transaction costs without exploring ways to reduce them, what option do depositors have?

 

First, the stricter limit on ATM transactions applies to six metros, when in fact, the higher number of transactions should lead to lower costs. Secondly, in-bank transactions, which are much more expensive are not being charged—unless RBI plans to permit those too in the near future.

 

Interestingly, ATM charges were a subject of hot debate at an Open House session by Moneylife Foundation on 22 November 2014, with its new trustees—TS Krishnamurthy (former chief election commissioner of India), Dr KC Chakrabarty (former deputy governor, RBI) and Siddharth Das, COO of Payment Systems at Flipkart.

 

Dr Chakrabarty, well known for his brutal outspokenness, had said, “I don’t agree with the institutional view of the RBI… on allowing banks to charge for withdrawals from their own banks.” He demolished the claim that customers must pay for services saying, “If banks want to move to a system of transaction fees to be paid by customers, then they must also be prepared to work at very low interest spread. They cannot pay 4% on savings accounts but charge 12% or more on advances and also charge customers for transactions.”

 

Contrary to RBI’s belief that service quality drives the customer’s choice of banks, most often people are tied to a bank because of salary accounts, scarce lockers, electronic payments for utility bills, credit cards or loans. It is not easy to cut these strings frequently.

 

As it is, the decision to charge for services that were free till now, like mobile text alerts and higher charges and increase in debit cards fees, has become a source of irritation and discouraged people from maintaining multiple bank accounts. Angry and suspicious customers want to know why nationalised banks continue to expand their ATM networks so rapidly if transactions are unviable.

 

Moneylife Foundation had pointed out that there is no system in our country to report non-functioning and 'out of order’ ATMs that we as customers see almost every time we want to use it. This makes it necessary for people to hop around and use other bank's ATM that are working. Another crucial issue is the restriction on money withdrawal. If someone needs, let’s say Rs25,000 but the ATM has withdrawal limit of Rs10,000. In this case, the person would end up making all three permitted transactions in one go.

 

The decision to permit banks to levy charges on ATM transactions is not, in itself, a move that should shatter consumer confidence. But, by choosing to issue a diktat on what should have been a decision by individual a reciprocal service obligation on banks, RBI has ended up signalling that it does not particularly care about the consumer.

 

Will PM Modi, who often talks about bringing 'achhe din' for common citizens rein in the financial regulator and the bank cartel from punishing own customers by levying variety of charges while enjoying one of the highest spreads on interest anywhere in the world?

 

You may also want to read…

 

Wake Up to Your Bank Charges

 

Make ‘basic’ banking services free!

 

ATM Charges: When RBI acts as ‘toothless’ tiger

 

Jan Dhan: Desi Problem, Videshi Terms

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COMMENTS

vswami

4 years ago

To share a customer-centric article (courtesy- BL):

How to complain in a way that will be heard

Quite useful clues, and being direction-specific, it is for an aggrieved customer to take a conscious note of and follow the best suited. One offered suggestion is "that in the most complicated cases, if customers are ignored on customer service channels, the best way to get the firm to act is to escalate matters to senior executives”. Going by personal experience, however, that may not really work (or ‘work wonders’) in all cases. Consider case of an aggrieved bank customer having a serious complaint of an irregularity or illegality in certain ongoing practice for long, without even a whisper from impacted customers as a class, most of them remaining low-aroused or not to be easily aroused. In such a situation, the common tendency of every ‘senior executive’- for that matter, even the chief executive, mostly gifted with an insensitive and recalcitrant disposition towards customers ,is to prefer the gimmicks of passing the buck and keep dodging as long as possible. Left with no way to bring about a realization by them that the proverbial ‘buck’ must stop somewhere, customer finds no option except to, if so decides, resort to a formal course, but long drawn process, of legal action.
Anyone with like experience who can suggest any alternate but better (-least bothersome) course of action to suggest?

vswami

4 years ago

To Update (supplement !):

Latest on ‘profession’ ( RBI)

> Rajan cuts through the RBI fog; tells officials to be professional


>>To anyone frightfully concerned, more so who truly cares to, -valued time and inspiring mind permitting-, give more thoughts, with a profoundly altruistic objective, –

Read HERE:

>>> Living In A World of Professions - SpeakingTree

For more, a handy compilation of related HERE>

>>>> http://vswaminathan-swamilook.blogspot.i...

vswami

4 years ago

An Update-
BL reports:
"Banks can now pay higher rates for deposits without premature withdrawal option"

< Viewpoints shared through comment posted @BL ; also on Facebook

Advocate Navneet Sarin

4 years ago

GOOD EXERCISE BANKS SHOULD BE MADE PRO CUSTOMERS.

vswami

4 years ago

The since published article of a learned lawyer @ ICL Bogs, HERE, - Relevance of the concept of truth-in-lending (Truth in lending: Regulatory Measures in India)may be found to cover certain related aspects; echoing like sentiments/ similar concerns as herein.

Advocate Navneet Sarin

4 years ago

Recently I have noticed, Banks are charging 5%PM means 60% annual interest to Credit Card Holders on outstanding balance. Apart from that they charge Rs.400/- as late payment charges. Which means if you forget to pay an outstanding balance of 200/ after one month that will become 610/- what a nice day light robbery committed by Banks. It appears RBI has closed their eyes or have failed to protect the Bank Customers. Now Govt is giving Credit cards to every Indian, even in villages where all these customers do not have any access to internet or e banking. So all government schemes to uplift the rural poor's will result in whole of their money siphoned off in the name of various banking charges. God bless & save 9.5 crores New Customers of Banking Industry.

vswami

4 years ago

To Add-on:
While the poser to the PM and FM has yet to receive any direct or positive answer, the media since reports , -Banks, unions wage talk on Jan 5.

And goes on to say, "...... if the talks fail to resolve the problem, it would go ahead with the strike on January 7 and also the four-day continuous national strike from January 21..."

If were to go by simple common sense, how does one reconcile this development, of course not unfamiliar or odd, hence, as always before most likely to be taken not any seriously but in the stride, with the message to banks given by concerned VVIPS , telling to- "Be socially responsible and commercially viable"

In a lighter vein, - what sense it makes to call the threat as NATIONAL (not, nation-wide; if hesitant to name it -anti national) strike, despite echoing not even an iota of either social responsibility or commercial viability the instant threat portends.

Loudly wondering,- is this not a matter of crucial importance to be suitably taken on and effectively tackled in the ongoing talk, and in the follow-on process expected to ensue, of revamping the labor laws freshly mooted?.

REPLY

Advocate Navneet Sarin

In Reply to vswami 4 years ago

The demands of unions is very much genuine. There was a time some 30+ years backs when Bank employees were paid handsomely due to the nature of their Jobs and the risk attached to it. With the passage of time due to high handedness of Finance ministry and unnecessary interference of Governments in pressurizing Banks to distribute loans to un viable sectors in the name of social responsibility the profits of Banks were siphoned off in bi9g way. Due to which the poor employees were made responsible for NPA and low salary increases. On other side Government and other public sector employees were given generous pay rises. The result today a peon in Public Sector/Govt dept is getting far more than a clerk in Bank. And A clerk in Public sector/Govt unit gets far more than a Bank Manager and that too without any risk or responsibility or even work as most of the Public sector is over staffed but banks are understaffed.

vswami

In Reply to Advocate Navneet Sarin 4 years ago

While having no knowledge of the actual/ factual position in regard to 'pay' package /or overall payroll cost in real terms, hence no comment to offer on the reasonableness or otherwise thereof, certainly that is a matter which employees . including high end ones, would be justified in pursuing/persisting in their genuine grouses/ grievances,cohesively and with all the might, to the end of a satisfactory solution.Certainly, however,there could be no denying, that ought not come in the way of or jeopardize customer expectations / satisfaction, resulting in a compromise on the quality/efficiency in service to customers,who really could be expected to have any real or effective, even persuasive, 'say' or influence, in such a matter essentially of internal management / in- house administration.
In any event, those are extraneous to the subject matter of primary discussion herein, mostly founded on principle based rules urged for.

vswami

In Reply to vswami 4 years ago

Sorry ! in the fifth line from bottom, to be corrected and read, - ...who really could NOT be expected..

sunlight

4 years ago

I express my thanks to moneylife foundation for its movings regarding the ATM charges

jaideep shirali

4 years ago

The essential difference in the way banks perceive customers has changed. The MNC bank arrogance has permeated most banks today, private or public. The private banks think that they should be seen as gifts from heaven by their customers, hence they are arrogant. PSU banks do not care, because their survival is assured, irrespective of customer service. What is worse, PSU banks sign away crores of NPAs without anybody punished and recover this loss to some extent through their customers. Banks said they wanted ATMs, they obviously did their calculations, so why are they protesting now? All banks forget that they exist because of their customers, they are not doing a favour to customers by serving them. So why should customers be at their mercy ? We need to have more consumer representatives in decision making bodies such as RBI.

vnrao

4 years ago

govt is in controll of corporates do not expect any welfare measures

vswami

4 years ago

OFFHAND
“..will meet bankers in Pune at a two-day banker’s retreat. PM Modi is scheduled to interact with banker...”
'retreat' - with or even without looking up a dictionary, the word, it may be realized, has an ominous foreboding, - is repulsive to / flying in the face of the very objective of the intended meet.
As regards customers' grievances, topping them all but found no specific mention is, the bank's ongoing practice for long but not cared to be looked into and remedied thus far. That is, concerning the unscrupulous charge by way of reckoning afresh, and reducing interest otherwise already accrued due, on withdrawals of own monies in deposit, if done before the stipulated period; and adding insult to the injury, further reduce additionally '1%' of the deposit, The most objectionable part of it is that banks do so, even with no clear cut term / condition stipulated by bank or made known to the depositor at the time of placing the deposit. To be precise, in one such instance, the term/condition as stipulated / disclosed on the face of the account opening form of the bank is so clumsy, and the language distorted to such an extent that it makes no sense, and can have no lawful binding.

For sampling, -
Q
"Subject to such terms and conditions as the bank may stipulate ...make premature payment of the proceeds ... be at liberty though not bound and its absolute discretion , to repay the deposit before maturity , ..." UQ
For the view taken by the RBI Ombudsman himself , that too in a case of foreclosure of home loan, refer, - Bank pulled up for 'deficient documentation' | Business Line
Should that be so, is there not adequate justification / all the more reason why the same logic ought to be applied and followed, when withdrawal is out of , unlike in respect of borrowing by customer, his own monies lying in deposit? Are not the banks, in still, to the contrary, pursuing its own dubious way of thinking / in-house / in-box philosophy, taking advantage of the largely prevailing unawareness/ callous attitude on the part of customers, liable to consequences flowing from the patently wrong practice, in breach of faith and trust ignorantly placed by customers?
Now that the ball is RBI's court, it is for the regulator to take a conscious note of the widely obtaining discontent of the customers and bring succor to the frustrated banking public , with no longer wait.

Jingo

4 years ago

I do not agree with a single sided representation of facts MD fiction by MoneyLife. I know Sucheta's response would be get out of my face if you don't like what I say.. But that would not deter me from making my point of view here.

We Indians love cash. While the world is moving to electronic transactions. We remain steeped in using cash and hoarding cash for all kinds of usage. The bigger issue is that the high taxes and corruption in the tax administration and business people means that only the salaried class among individual tax payers bear the brunt. Businesses, especially in the unregulated sector or SMEs, want to deal with cash only as it helps them declare lower income.
This results in people having to take out cash for making all kinds of payments - whether they need to buy daily provisions or mobile phones or white goods or pay for government services or even society maintenance fees, etc. - all requires cash payments predominantly.
Banks provide such services for cash withdrawal at their branches as well as through inter connected ATMs. Ther ae costs of maintaining the infrastructure - costs of providing security not ony within the premises but also when currency chests are being moved from one place to the other, costs in manpower to help in reconciliation of the lakhs of daily transactions that happens, costs f maintaining the supervision, audit trails, etc to monitor and prevent frauds.
Why do we Indians think that it's our birthright to get every servixe or facility for free - most of us wouldn't mind spending 1000 rupees on a shirt but we don't want to pay for cooking gas at market prices. We don't mind spending 1000 rupees to watch the latest Salman khan starter with friends or family but we have a problem paying 20 rupees to bank for providing us with an ATM facility close to where we work or live.

I also disagree with a comment made in the article about banks continuing to open new ATMs - as a matter of fact and as per a RHi report released recently the growth in number of ATMs deployed has comedown significantly over the last couple of years. Incidents in ATMs such as the one in Bangalore has resulted in increased demand or providing adequate safety for customers. Can that be compromised by banks who are mandated to provide such services for free?
Yes - there are a lot of things wrong in the banking sector - an over zealous regulator being amongst the top most issues, lot of fat in terms of the net interest margin allowed to the bank, they unwillingness to lend money to smaller businesses, public sector banks being run by the finance ministry mandarins like their fiefdom, and so on.
But not to allow banks to levy reasonable charge to customers for services being provided should not acceptable.

Now I know what I am mentioning here would sound almost like blasphemy to people - but I think we need to control our double standards - we want world class facilities but we don't want to pay for them or we don't want to vote for those politicians who promise growth and development above anything.
Commerce leads to progress. We should encourage people to educate themselves, earn a respectable living.. We should strive to remove the massive corruption in our public and private lives. We should strive for better treatment of people - whether minorities or in lower "caste" or "class". That's what is important. Raising such frivolous issues is a waste of everyone's time.

REPLY

R S Murthy

In Reply to Jingo 4 years ago

Sir, Term Depositors are not charged. Currwnt account holders stand on different pedestral and charged accordingly. The issue is Savings Account holders only. Poor interest payment on the balances maintained followed by charges for every service is only causing concern. Cash will remain the medium of settlement till majority of the public become literate and move above poverty level.Middle class being the major chunk of SB account holders, naturally feel bad with every hit.

Advocate Navneet Sarin

In Reply to Jingo 4 years ago

Dear Mr. Jingo, It appears you belongs to an elite class living in Metro and have never visited Banks for cash withdrawal or deposit. The plastic money is not popular and once you are out of metro or even in metro cities go to any regular market you will need cash. I have come accross hundreds of shops even in Mumbai or Delhi who do not have card payment facility. If you are a local bus traveller you need cash, if you feel hungry and go to and eatable shop you need cash, to survive every where you need cash. You say people prefer cash to hide the income. Even if so Banks who themselves are biggest players in Money Laundering can't become moral crusaders against cash economy by hurting the small customers. That's a different matter and we leave it. There are so many reason behind Cash Economy and we cant discuss them here. The reality is by putting ATM machines bank save more than any one else. You see the number of employees reduced in Banks during last 10 years. So they earn more by installing ATM Machines by reducing the staff at counters. The only reason behind levying charges on Customers using ATM is to mince more money. Banks are many bank robberies in India, but why banks have not stopped opening more branches. Banks have never bothered about the security of their Branches forget the ATM's as everything is insured. So please understand there is only one truth and that is to hide their wrong doings, to show profits and improve their bottom line Banks are playing all these games. No one cares for RBI instructions just for example RBI says cheques must be cleared on same days in metro Cities. But tell me the name of Bank who does not hold the amount/Cheque at least for 3 days. Why because that give them interest free credit for 3 days. I agree to the article that Bank must be forced to be costumer friendly and more efficient and should not loot customers for their inefficiencies and profit.

MDT

In Reply to Jingo 4 years ago

Thanks for your comment.
However, we wish you would have done more reading before labeling the article as 'single sided representation'. Anyway, it is never too late to read, learn new information. We suggest you read few articles written by a veteran banker.
http://www.moneylife.in/article/free-use... and
http://www.moneylife.in/article/will-fre...
Thanks again,
MDT

MOHAN SIROYA

4 years ago

Thanks to Moneylife Digital team to compile this representation, which I feel should be mailed to PM and FM for their knowledge and request to take up this issue.
The usurper and arbitrary list of bank charges given in the article are not exhaustive but a few as an example. Now we are afraid to even approach a bank for any service. Recently ICICI Bank sent a dictate that SB account holders will receive Bank statements only son E. No hard copies of Quarterly statements as were sent hitherto. This is against the specific RBI regulation. Imagine what will happen to those who do not have their own PC , printer or Email ID.
In this scenario ,how the PM's dream to cover entire Indian people to have at least one Bank Account in a family will get fulfilled ?

REPLY

Advocate Navneet Sarin

In Reply to MOHAN SIROYA 4 years ago

These Banks Feel they are above laws and they accept RBI's Instructions where they suits them otherwise no one cares. Numerous customers have been defrauded at Banks but no one ready to listen. I know a NRI whose 4 FD gone missing fm SBI NRI Br Mumbai, The poor Customer died without having a reply fm SBI.

MG Warrier

4 years ago

ALL the issues raised here are very relevant and deserve attention from the elite group of bankers and policy makers who will be in attendance at the proposed interaction which has also been termed ‘brainstorm session’ by a section of the media. Having said that I view it from a slightly different angle.
Both, Prime Minister Modi and RBI Governor Rajan are good listeners and have a practical approach to issues. The coming together of these two and the Finance Minister for interaction with the bankers and the ‘Think Tank’ of the financial sector, by itself sends out healthy signals. The signals include India’s determination to move forward with reforms with all stakeholders on one page. This is definitely a welcome change from the earlier practice of (a) mutual blame game (b) top functionaries in government and organisations speaking out their mind when they are at a reasonable distance from powerful people who may have a different view or factor in controversial views only while speaking to ‘silent’ audiences. This is a welcome beginning.
M G Warrier, Thiruvananthapuram

REPLY

Advocate Navneet Sarin

In Reply to MG Warrier 4 years ago

Sir, There was a thought that Public Sector Banks are only corrupt bankers but that incorrect Recently I came across few matters where I found top private sector banks dealing through agents have mastered the game in big way.

MG Warrier

In Reply to Advocate Navneet Sarin 4 years ago

Thanks. In the Indian context, public sector-private sector differentiation itself is a misleading concept. Both survive on 'public funds'. Corruption, like cancer, has no class-sector-faith dimensions. Essentially, it is promoted by greed. I have covered some aspects of corruption in my book "Banking, Reforms & Corruption: Development Issues in 21st Century. A Google search will take you to some reviews of the book.

Advocate Navneet Sarin

4 years ago

The Service Charges are increased by RBI to protect the inefficiency and corruption in Banking Industry. The Indian Banking Industry has become most critical state, Banks have flouted all the rules. Banks in in nexus with Builders and have totally failed in fulfilling their duties. The Banks have given lakhs of Crores to Home Buyers where the projects approved by Banks were not having any approvals or permission to sell flats but Banks approved the projects. Question is how & for what?

Is Dishonesty Inherent in Banking?

Researchers feel that the banking industry may encourage employees to think that cheating is okay

 

When a banker you trust dupes you, he is called a ‘bankster’. Moneylife is not new to such bankers. We have come across several cases where consumers have been duped by bankers selling them third-party products. Bankers have become aggressive salesmen, selling insurance, and mutual...

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