The Wrath of the Finance Minister
On 27 February 2020 at Guwahati, the chairman of State Bank of India (SBI) reportedly publicly faced the wrath of the finance minister (FM) since as many as 250,000 saving bank accounts belonging to tea garden workers in Assam had become dormant due to lack of acceptable know-your-customer (KYC) requirements. The result was that transfer of funds under the direct benefit scheme to these accounts could not take place.
 
Naturally, the FM was upset, considering that virtually the sole benefit of establishing accounts under PMJDY (Prime Minister Jan Dhan Yojana) from the government’s perspective (it was through and through a government initiative) was to enable such funds transfer. It was sold and accepted by all and sundry on this basis and the political benefits of such cash transfers are huge. The incident was not in good taste and was criticised heavily by many, especially the PSU banking fraternity. 
 
The department of financial services (DFS), the banking industry and, of course, the politicians involved have been congratulating themselves on the humongous numbers of deposit accounts opened under PMJDY since 2014.
 
But initial assessment of utilisation of these accounts suggests that, after the accounts were opened, regular operations were limited. Many of the accounts were opened with zero balance just to boost the figures of the number of accounts opened. Later, to mask the fact that there were no operations in these accounts, bankers deposited paltry sums into them. 
 
The KYC requirements for such accounts are minimal and it is difficult to see how KYC requirements could not have been done when they were initially opened. In all probability, the accounts became dormant because the account-holders did not find it either convenient or cost-effective due to which it had little utility for the so-called beneficiaries and naturally there was little usage and no incentive for ensuring that basic account maintenance requirements like KYC is done on a regular basis. 
 
Classifying accounts in which there are no operations for long periods as 'dormant', i.e., no further operations being permitted without specific actions (like verifying the genuineness of the account holder through fresh KYC) is a well-accepted standard operational banking requirement to ensure that a customer’s account is not misused, and for prevention of fraud.
 
The prime purpose and utility of deposit accounts (such as those opened under PMJDY) is that it supports in de-risking consumption levels and smoothens expenditure by insuring the depositors against income shocks and emergencies – something which can make a difference between life and death for people living beyond the pale. 
 
This aspect seems to have got missed totally in the entire publicity narrative. From the politician’s point of view, PMJDY has been promoted as an easy and cost-effective means of transferring direct cash benefits with an eye on electoral gains and has largely remained that – as amply reflected by the incident at Guwahati. 
 
If there were regular transactions in these accounts, it would have ensured that they did not get classified as dormant and would be operational when the government wanted to make funds transfer. It is highly doubtful if any of the banks involved (or the Reserve Bank of India—RBI) are sincere to the real purport of these accounts or took any concrete steps proactively to ensure regular operations in these accounts. 
 
The normal situation today is that for most daily workers making a transaction at the branch (deposit or withdrawal) is likely to mean a longish travel and losing one day’s earnings. Payment banks are a much-touted alternative, but to transact on an account with such a bank a person needs, at the minimum, a smart phone, an Internet Connection, and some level of literacy.
 
 
How many Indians, especially in the bottom 20%, would qualify even in one of these three essential requirements! Even more, customers should have an intrinsic trust that they would not get cheated while transacting. 
 
Banks seem neither to have any incentives to improve utilisation of JDY accounts nor the business acumen as to think through how reducing transaction costs through use of technology could convert these myriad small accounts into a hugely profitable business opportunity in terms of giving them a huge pool of stable low-cost deposits. 
 
Moreover, well-functioning deposit accounts can help a much larger set of our population since many more people can use deposit services than loans.
 
There is empirical evidence from across the world that the poor really value the small financial savings they are able to make if convenient depository services are made available and many a time are willing to borrow at a higher rate of interest rather than break the deposit. 
 
A major reason for the regular occurrence of Ponzi schemes seems to be the absence of such depository services which forces people to look for means of keeping their savings in schemes which give a positive real rate of return – something which our banking system has consistently failed to do. 
 
Safe, convenient and liquid deposit services also help increase the savings rate of the country, thereby reducing dependence on foreign financial investments as amply seen in the circumstances of many countries – Japan, Taiwan, and Germany. And, of course, this has been one of the much-touted benefits post-nationalisation with the opening of a large number of bank branches in the country. 
 
Large non-performing assets (NPAs) are not the only indicator of our deeply dysfunctional banking system on account of 50+ years of mis-governance–it is apparent in each and every aspect of their operations – failure in providing basic deposit services is just one of them. 
 
Looked at from the perspective of the main promoter of the Bank and as a politician, SBI failed in ensuring continued operations in these accounts. From the perspective of majority promoter and investor, SBI failed to realise and convert the opportunity of having such a large number of accounts into a viable business proposition.
 
Considering the entire gamut of circumstances, the wrath of the FM does not seem to be misplaced.
 
(The author worked with various banks - public, private, and foreign both in India and abroad - for nearly 30 years and is currently on a self-imposed sabbatical to try and understand as to what ails Indian banking and what, if anything, can be done to improve its functioning.)
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    COMMENTS

    vikas.322

    4 weeks ago

    Sushil,
    Revisit the 5th paragraph, it says," to ensure a customer's account is not misused for prevention of fraud".
    Prevention of fraud is not a misuse.
    2. It seems your argument is that once the accounts have been opened it is for the Bank to ensure that the account holder earns enough to be able to save something to ensure that the accounts are used regularly.
    3. Banking as a healthy habit is everyone's responsibility. In the instant case the accounts belonged to Tea Estate Workers and the complaint of dormant accounts was made by the Assam Government. Had the same Government mandated payment of wages through these accounts such a situation would not have arisen.
    4. Further the KYC issue involved 'proof of residence'. Most of these workers stay on the tea estates in shanties provided by the estate itself. As there are no ownership papers the estates could have easily certified their resident status which they did not do for fear of creating some kind of a right in favour of the resident. Again Assam Government or its revenue officers could have found a way out but did not.
    5. RBI was well aware of this and could have waived the proof of residence requirement but did not as these requirements emanate from the Prevention of Money Laundering Act.
    6. Central Government of which the FM is a leading luminary could have exempted the tea estate workers from this requirement but chose not to.
    And the fall guy was a poor banker who was trying to fulfill his Regulatory and Statutory obligations.

    REPLY

    sushilprasadassociates

    In Reply to vikas.322 4 weeks ago

    1. Banks need to realise the utility of enabling small value deposit accounts as an attractive business proposition which use of technology for reducing transaction costs enables since it would give them large stable low cost deposits. Moreover, there is a very strong latent need for such products. Please also see the article Savings - Banking Industry's Step Child.
    2. It is a business opportunity which is being missed by banks.
    3. If depositors see and experience the utility of having bank accounts which are easy to use in their local language and will less bureaucratic hassles, it would be in their own interest that they would seek to fulfill KYC requirements on their own. Bank's have to create the ease of operations.
    4. Dilution of KYC requirements by waiving "proof of residence" or other criterion is not being questioned or desirable.

    bpugazhendhi

    1 month ago

    Post office savings banks are the most convenient for this target. They are ubiquitous and approachable as well as simple. Govt should leverage on this already existing network and modernise it further.

    REPLY

    sushilprasadassociates

    In Reply to bpugazhendhi 1 month ago

    The Post Office Payment Bank has still to get its act together.

    m.prabhu.shankar

    1 month ago

    Govt should focus on the work that it should do instead of doing the work of citizens. Govt can never do the work of citizens and hence it should refrain from doing it otherwise it will end in a failure. Opening bank accounts, Building toilets etc.. are the work of Citizens. They will take care of it when its required for them. Govt should just focus on three important things as of now. Employment generation on a mass scale, Free Education till under graduate for every citizen, Free Health care for every citizen. Rest of all, Citizens will take care.

    REPLY

    sushilprasadassociates

    In Reply to m.prabhu.shankar 1 month ago

    An efficiently functioning financial sector which includes helping all have functional savings deposit facilities would be very helpful in insuring some aspects of financial security for the masses.

    homaielavia

    1 month ago

    KYC on an annual basis is sheer nuisance. Yes KYC when opening an account is valuable. Thereafter, when there are regular normal transactions in the account, providing KYC , with documentation proof, seems waste of time and energy. Unusual activity in any account can easily be flagged and KYC demanded in such cases.

    REPLY

    sushilprasadassociates

    In Reply to homaielavia 1 month ago

    There is a lot of confusion in understanding role of KYC among bankers. To cover up their ignorance they ask for KYC all the time. Some time back I got letters from my bank requesting for updation of KYC for two of my accounts. I was mystified since KYC is for the customer and not for accounts, and moreover I had recently updated my KYC. I did some digging and found that the letters related to two of my FDs which had already matured and been paid off! So I politely replied as to whether KYC has to be done for closed accounts too and requested them to send me the relevant RBI instructions. I followed up with a couple of reminders. As expected they never replied.

    Meenal Mamdani

    1 month ago

    In Africa, phone banking is widespread and safe. The people are as poor as the Indians, so how do they manage it?

    REPLY

    sushilprasadassociates

    In Reply to Meenal Mamdani 1 month ago

    Their payment and settlement systems regulations are more accomodative. It has some severe pitfalls. Payment banks were licenced in India to provide such services while taking care of the problems involved. They have their own set of problems. Of the 11 payment banks licensed by RBI, 3 did not set shop, and one closed down. Other than PayTM one does not get to see much visibility of the others.

    rajoluramam

    1 month ago

    What about KYC of fradusters?
    No need. Only the poor small time depositors require KYC or else the account is blocked. As the " jan dhan account holders might be having small balances or may be zero balance, neither the bank nor the customer is interested in KYC. Why only in Assam. There may be lakhs of jan dhan account holders who have not submitted KYC documents in the country.

    REPLY

    sushilprasadassociates

    In Reply to rajoluramam 1 month ago

    If the account holder perceives value of maintaining the account, it is in his / her incentive to periodically ensure that KYC is updated.

    sushilprasadassociates

    In Reply to rajoluramam 1 month ago

    Even if JDY accounts have small balances, it is in Bank's long term interest to see how regular operations take place so that the account does not become dormant. KYC needs to be done of every account holder without fail to ensure that fraud is kept in check. Thanks.

    Lakshmi Vilas Bank and Dhanlaxmi Bank: Self-Inflicted Existential Crisis? -Part 1
    Corporate governance issues continue to rock Indian banks in the State as well as private sectors. In case of the State-owned public sector banks (PSBs), the government does not wish to keep them at an arm’s length; rather it often goes to the extent of micro-managing PSBs’ affairs, leaving the blame on the banks for poor performance. In the private sector, either all powerful top management teams or selected directors of their boards call the shots, with little concern for governance standards, sometimes compelling truly ‘independent’ directors to quit. The consequences in both cases are identical: the banks’ growth gets stunted, often leading to serious setbacks. They could also cause an existential crises as happened recently with Punjab and Maharashtra Cooperative (PMC) Bank and Yes Bank. 
     
    Such a crisis is now faced by two private banks in the south, the Tamil Nadu-based Lakshmi Vilas Bank Ltd (LVB) and the Kerala-based Dhanlaxmi Bank Ltd (DLB). The last week of September saw the strange spectacle of their managing directors-cum-chief executive officers (MD & CEO) being unseated by shareholders in their annual general meetings (AGM). In LVB, six other directors were also ousted (Read: Coup at Lakshmi Vilas Bank: 7 Directors Ousted, in an Open Snub of RBI and Dhanlaxmi Bank's RBI-appointed MD Sunil Gurbaxani Voted Out during AGM)
     
    A Similar Organizational Culture
     
    LVB and DLB, were set up in the 1920s in Karur (Tamil Nadu) and Trissur (Kerala), respectively, by local businessmen. Both had small business units and individuals as their targeted client base.  For long, their operations were restricted to these two states, like many other banks established in these states. 
     
    By the turn of the century, both banks decided to change their business model with the objective of growing big fast. Their script and goals were identical. Top management was changed in the hope that they would help transform the banks into pan-India, tech-savvy, diversified financial institutions. Herein were sown the seeds of the current imbroglio. Although there are similarities between the two banks, the dramatis personae in each were different. A little elaboration on each bank will put issues in perspective.
     
    The DLB Saga—Controversial Leadership Changes
     
    The success of any changeover is predicated on effective and continued leadership. This was missing in DLB which saw frequent leadership changes.
     
    The Bank had seven CEOs between 2003 and 2020; five of them did not last their full term. The first three, G Muthuswamy, TR Madhavan and Amitabh Chaturvedi, resigned because of the differences with the board. 
     
    Amitabh Chaturvedi, however, did push through the transformation exercise. He went after big corporates for business; introduced lateral recruitment on contractual basis to bring in staff with much higher compensation packages than those of regular employees. This had twin disadvantages. The bank’s fortunes were linked to the performance of the borrowers and the new entrants on contract caused a cultural conflict as they had no attachment to the Bank nor were they really looking for career advancements. This resulted in a lack of institutional commitment and only added to cost.  
     
    The period saw a series of industrial relations (IR) issues triggered by the fact that the officers’ association perceived a risk inherent in the new practices introduced by Mr Chaturvedi. For instance, recognising income before the interest was actually realised, unilaterally debiting customers’ savings bank accounts for service charges, collecting processing fee before a loan was actually released, were all against the standard banking practices. The association questioned such window dressing. When the bank did not take corrective measures, the association wrote to the Reserve Bank of India (RBI), which undertook an investigation of ‘fudging’ the income account to show inflated profits. That further strained the relationship.
     
    Mr Chaturvedi’s time, no doubt, saw business grow rapidly. Between 2008 and 2011, the total business scaled up to Rs24,000 crore from Rs6,500 crore.
     
    Simultaneously, expenses started outstripping income. The capital adequacy ratio fell to 10.81% in 2011 from 14.44% in 2009. This expansion was clearly not sustainable.  Yet, his term was extended by another three years in 2011. However, he could not carry the board with him on his much-touted strategy of going after big business and was forced to quit early. 
     
    His two successors PG Jayakumar, an internal man, and G Sreeram, a former executive of Canara Bank, held the fort without any course correction. In July 2018, T Latha, a former executive of Punjab National Bank (PNB) was appointed CEO for three years. But in October 2019, she resigned on account of certain issues at PNB. In February 2020, Sunil Gurbaxani was appointed the CEO, who had to lose his new job during the AGM Dhanalaxmi Bank.
     
    A Divided Board
     
    DLB board has been a divided house for a long time. Directors would interfere in day-to-day matters causing conflict with the top management. The premature departures of Mr Muthuswamy and Mr Madhavan followed such conflict. Mr Chaturvedi was able to get along with the board for some time with a clear strategy. But eventually he also quit prematurely. His successor, G Sreeram had no independent mind of his own and played second fiddle to the controversial chief general manager P Manikandan.
      
    Mr Manikandan, who was a mid-level officer in Canara Bank, had joined DLB early this century; he rose quickly in the hierarchy to become chief general manager, bypassing several old-timers in the Bank. Enormous powers were concentrated in him as corroborated by later developments.  
     
    Between 2015 and 2019, several professionals on the board quit the Bank.  In 2015, K Vijayaraghavan, an independent director, was shunted out. In April 2016, K Jayakumar, a highly respected director (who was a former chief secretary of Kerala), resigned. His letter of resignation made a searing indictment of the top management and the board. 
     
    He referred to the questionable role of the CGM-CEO duo and the inability of the board to assert its power. He lamented that ‘the initiatives approved by the board’ and several suggestions and admonitions of the RBI had repeatedly failed to yield the desired results. That was a red flag. (Read: Dhanlaxmi Bank: Director K. Jayakumar exposes top brass while resigning
     
    In June 2020, the non-executive chairman, Sajeev Krishnan, a former CGM of SBI, resigned before the end of his term; along with him two independent directors, KN Murali and G Venkatanarayanan also put in their papers. That was a red flag again. 
     
    The Contributing Factors
     
    Three internal factors have led to the current mess in DLB. 
     
    1. Inadequate checks and balances over critical wings of power; 
    2. Failure to take the stakeholders at different levels along with the proposed change; and 
    3. Failure of oversight by the board. 
     
    To pursue its ambitious expansion plan, the Bank brought in outside executives at different levels with no role clarity or required checks & balances in place. Successive CEOs and boards failed to exercise judgement in evaluating the performance of lateral entrants allowing some to become more powerful than the appointing authority.
     
    The failure to take along existing employees and officers resulted in lack of trust between the management and employees on the one side, and the top management and the board on the other. Recurring IR conflicts led to greater distrust when dialogue was replaced by diktat, leading the unions going to the RBI to complain about what they considered was against the Bank’s interest. 
     
    The gravest issue related to a fixed deposit scam in the Mumbai branches in 2013 involving a director, who was later arrested by the economic offences wing (EOW) of the Mumbai police. DLB had an exposure of Rs141 crore with Rs800 crore exposure at the industry level. Instead of resolving the conflict through trust-based dialogue, vindictive action followed, culminating in the summary dismissal of PV Mohanan, general secretary of Dhanlaxmi Bank Officers’ Organisation, in 2015. Transparency and dialogue, which play a key role when transformation is attempted, were missing. 
     
    The problems got compounded because of the board failed to exercise effective oversight over  top management. There were no means to know the functioning of different departments, particularly credit, recovery and human resources (HR). If the board had asserted this power there could have been timely interventions to arrest further downslide. Unfortunately, the MDs and chairmen—some of whom were veterans in the financial sector- took things for granted, giving unbridled power to management officials led by the CGM. 
     
    All these developments could not have escaped the radar of the RBI. In 2014, the national body of bank officers, All India Bank Officers’ Confederation (AIBOC), had, in a letter to RBI pointed out the continuing conflicts within the board and its subservience to the CEO and the CGM who was not a member of the board. RBI had its own nominees on the board; it could have verified the reports independently. When it reacted, it was slow and without further follow-up. Beyond putting the Bank under prompt corrective action protocol (PAC) in 2019, no other step was taken till September this year.
     
    Performance
     
    The disorder within the top management cost DLB heavily.  It could not sustain the high growth attained during Mr Chaturvedi’s initial tenure; it moved into stagnation and decline. The figures for a 10-year span speak eloquently:
     
    Dhanlaxmi Bank Ltd-Performance between 2011 and 2020
    (Amount in Rs Crore)
     
    There are two redeeming features in an otherwise depressing performance. Although DLB incurred net loss in between, it registered net profit during 2019 and 2020; and there was infusion of capital raising its capital to risk (Weighted) assets ratio (CRAR) to 14.41% during 2011 and 2020 from 10.81%. The RBI’s PCA could have possibly helped it to show better performance in these two parameters. That however, left the fundamental governance issues unaddressed. 
     
    (This is first part of a two-part series)
     
    (TR Bhat is former president of All India Bank Officers' Confederation (AIBOC) and former officer of Corporation Bank)
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    COMMENTS

    Ramesh Popat

    4 weeks ago

    action by regulator when patient is on ventilator
    and not earlier!

    cvkakatkar

    1 month ago

    Good Narration -
    Please mention the names of the RBI Nominee Directors, who must have been sleeping in the boardrooms during their tenure.
    If they have reported the happenings and RBI has not acted - God Save us.

    rajoluramam

    1 month ago

    Any decision to save these 2 banks should be taken as early as possible. More the delay, more the damage.
    This is not today's prpblem. These 2 banks are in the news for the last
    2 to 3 years. These 2 banks are the oldest banks in the country and served the masses nearly for a
    Century. A quick decision is required by the GOI MF.

    Savings – Banking Industry’s Step Child
    As a society, we are so obsessed with the utility of giving cheap loans as the primary means by which banks can be of help in economic growth and social transformation.  And then we simply fail to see the much lower hanging fruit of enabling safe, convenient, and cost-effective deposit accounts that offer interest rates which are positive in real terms. 
     
    An immediate objection to this point of view, raised by well-meaning and learned policy makers (and, of course the enlightened intellectuals), is that since the poor have no income how can they have savings? They fail to see that since the poor have highly erratic and uncertain income flows, it is essential for them to have savings and, over time, they have devised myriad means to have small pockets of savings which enable them to survive from one catastrophe to the next. 
     
    The immense utility of safe and convenient deposit services is well brought out by Stuart Rutherford in his book, The Poor and Their Money. He describes the quasi-banking services provided by Jyothi, a middle-aged semi-educated woman in the slums of Vijaywada, who makes her living as a peripatetic deposit collector. Her clients are slum-dwellers, mostly women. 
     
    Jyothi has, over the years, built a good reputation as a safe pair of hands which can be trusted to take care of the savings of her clients. The service that Jyothi provided was to enable doorstep deposit collection of amounts as small as Rs5 (and multiples thereof). In this way, she helps her customers save Rs1,100 over a 220 days period, out of which she returns Rs1,000 after keeping her fee of Rs100. 
     
    The fact that Jyothi’s business was running well gives us no reason to believe that her customers were dissatisfied by her services or cost. This would seem strange to most of our bankers, policy-makers, economists, and officials from Reserve Bank of India (RBI) and Union government since Jyothi was effectively charging a negative rate of interest of about 30% per annum for her services of enabling financial savings! I am sure all of them would have a fit and curse Jyothi no end for such perfidy. 
     
    Actually, the service being provided by Jyothi is neither new nor unique. Way back in 1928, Syndicate Bank introduced a deposit scheme, known as Pygmy Deposits, wherein deposits (as low as 25 paise) were collected periodically from the doorsteps of savers—daily wage-earners, petty shop-keepers, vegetable vendors, hawkers, small traders. 
     
    That is, those who could save these small amounts per day or week or month, but did not have the time to go to a bank and deposit this amount regularly.
     
    This scheme proved to be both financially profitable for the bank and, at the same time, attractive to the depositors. It helped the bank develop a large low-cost deposit base in spite of substantially higher transaction costs and with minor changes, it ran well till it was nationalised. 
     
    These examples give an indication as to how highly the bottom economic 10% of our population values deposit services – provided it is safe, convenient, without bureaucratic hassles and conducted in the local language.
     
    Saving is the income, which is not consumed, and one of its main purposes is to support consumption at times when there is insufficient income – due to loss of job, illness and old age. In the absence of reliable deposit services, it is difficult to keep savings in financial form. Under such circumstances, savings take the form of building up stores of consumables and durables such as land, extra inventory, food-stuffs, liquid assets such as live-stock (chickens, goats, cows, and pigs), jewellery. 
     
    Or by having reserves they can borrow from (friends, relatives, and local grocer), alternatively by not insisting on immediate payment for produce sold or labour charges. Small caches of cash are also kept as savings – but this suffers from the danger of being lost, stolen, borrowed, or spent on impulsive purchases. And even if all this is somehow avoided, idle cash simply loses value over time due to inflation. 
     
    Another major drawback of non-financial forms of savings is that it is difficult, if not impossible, to easily transfer it from savers to those who can use it for productive investment. Savers and investors not only differ in temperament, skill and risk-taking ability, but also in having access to profitable investment opportunities. Due to this, very often, savers and investors are different peoples. Or, depending on circumstances, the same person could be a saver at certain times and an investor at other times. 
     
    Savings in the form of non-productive assets are less liquid, prone to fluctuations in value, risky to keep, and may not generate value over time. If the same assets are monetised, i.e., exchanged for cash which is kept as deposits with banks and the bank thereafter lends it to investors who are short of funds for making productive investments, society as a whole benefits. Savers benefit by transferring their savings into assets which are more liquid and safer, and gives a positive rate of return. 
     
    Investors benefit, by having ready access to funds which augments their savings, on which they can generate a return which is more than the cost of borrowing it. Society benefits by transfer of societal savings to productive investment and by the transformation in maturity of numerous short-term small deposits into larger longer-term investments, both of which are primary drivers of economic growth. Banks benefit by enabling this process and make an earning out of this process. 
     
    By offering deposit services, banks enable small bits of savings get transformed into much larger investments without adversely affecting the interests of the savers. Banks do this by offering safety, liquidity, and convenience to depositors and using these funds for making larger, illiquid investments (maturity transformation is one of the prime ways in which financial intermediaries create value).
     
    In fact, there is ample empirical evidence from around the globe that providing safety, liquidity and convenience are more important drivers for attracting bank deposits as compared to the rate of interest offered, especially in underdeveloped economies. 
     
    One of the difficulties of handling large number of small value deposit accounts is that it tends to create high transaction costs without commensurate benefits for the banks. Banks, in turn, being urban-oriented institutions never got to thinking of how they could redesign their business processes so as to reduce costs and create value. 
     
    Thankfully, today technology is there to help reduce transaction costs to ridiculously low levels, provided a little thought and effort at business process re-engineering is done. The kind of break-through thinking which exploded the market when shampoos started getting sold in Rs5 sachets or when fixed costs of owning a cell phone were slashed, can transform Indian banking and economy if more thought is given to deposit services – banking industry’s step child.
     
    (The author worked with various banks - public, private, and foreign both in India and abroad - for nearly 30 years and is currently on a self-imposed sabbatical to try and understand as to what ails Indian banking and what, if anything, can be done to improve its functioning.)
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    COMMENTS

    Ramesh Popat

    4 weeks ago

    savers must seize the right opportunity in time.
    i opened a bank's flexi rd a/c where i fixed base amt of rs.1000/- when interest
    rate was 10% for 10 yes. the scheme allowed to deposit ten times of the base amount.
    i now deposit 10000 every month (yes and get cool 10%) till the maturity
    in 2024. !

    m.prabhu.shankar

    1 month ago

    Excellent Excellent

    REPLY

    sushilprasadassociates

    In Reply to m.prabhu.shankar 1 month ago

    Thanks!

    Newme

    1 month ago

    Good view point. My Bank relationship manager gets irritated if I stick to plain savings and do not invest in any of the schemes he recommends.

    REPLY

    sushilprasadassociates

    In Reply to Newme 1 month ago

    Please be extremely careful of any schemes being sold. There is a lot of miss-selling going on. Yes Bank's depositors were sold their bonds with the selling point that it was the same risk and higher pricing. See where it has landed them. There are perverse incentives for doing such selling - RMs gets incentives and commissions (perfectly legally) apart from bonuses and promotions depending upon the amount of cross-selling they do. Stay safe.

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