The Hindu Business Line : Are banks jettisoning the basics?

BANK is defined in Chamber's Dictionary as an office or institution for the keeping, lending and exchanging of money. Nowadays one wonders whether we have moved away from this definition and are concentrating on things, which are not strictly banking. Let us examine a few issues in this article.

We are used to the slogans such as `Customer is always right' and `Customer is the king'. In a typical medium-sized branch, the manager used to stand in the banking hall during banking hours and see the customers coming in. The moment a familiar person appears he would greet him and exchange pleasantries. He would know about the family of the customer and make enquiries. Such conversations lead to some new contacts and new business. But nowadays, modern banks do not want to see the customer's face except when the account is opened. Many metropolitan and urban banks try their best to keep a customer away from the banking premises by introducing Tele-banking, ATMs, and Internet Banking. It is true that it saves a lot of time for a customer. These devices are necessary for the benefit of customers, but not for the sole purpose of keeping him away from the branch. One cannot help the feeling that the distance between banker and customer is widening. Faceless machine is slowly replacing a friendly cashier.

There was competition amongst banks, a couple of years back to keep the branches in the metros open all the seven days a week. Though a few quietly reverted back to the old system, many are continuing the seven-day week. Is it real banking or just a show? In a residential area, the customer wants banks to be open on Saturdays and Sundays. He does not mind if they are closed on a weekday. Branch staff, however, suffer because of giving `off days' to different people on different days. With the advent of ATMs, where is the need for keeping the branches open for 7 days? A few foreign banks keep few branches open 24 hours a day. Are they aware of the risk factor involved in coming out of a bank at say 3 a.m.? Under the guise of making more profits, banks enter into unknown areas. In the past we have seen many public sector banks burning their fingers by setting up merchant banking subsidiaries, asset management companies, and mutual funds. Most of them failed, mainly, because they were not strictly banking activity. Many youngsters joined to gain experience and within a year moved over to private companies with high salaries. Banks with their own transfer/promotion policies, compulsory rural and semi-urban branch posting and so on could never build up their own cadre for the subsidiaries. To add to the problems, they all came under the purview of Central Vigilance Commission, making an officer hesitant to take commercial risks!

When insurance was privatised, many of the banks wanted to join the bandwagon. Many of the Chairmen wanted to announce the setting up of insurance company with foreign participation. Why this herd mentality? Thank God, the RBI has been very selective in giving clearance. Sometimes the temptation to be in the limelight scores over the economics of the scheme.

A few of the banks announce that they have advisory cells to advise the customers on investments and even tax matters. Is it right for the banker to advise on share market? Even the predictions of leading analysts fail many times. At the most a banker can talk about his deposit schemes. As far as taxation is concerned, this is an area for chartered accountants and tax experts. Does the officer in the bank know the intricacies of taxation? Why enter into an unknown field? Do you really think people will come to a banker for taxation advice?

Another publicity gimmick is the setting up of coffee bars/cafes in the bank. Wide publicity is given for this `innovative' idea! What is the benefit to the customer? Even if you enter the Manager's cabin of a semi-urban branch, he offers you a cup of coffee out of courtesy. What is the big deal in setting up a posh `Café'? How many will enter the bank to do business, just because high quality coffee is available?

Quite a ridiculous thing that one has come across is the photograph that appeared in a weekly, of a bank officer taking the dogs of the customer for a walk. I do not know how this is connected with banking. Will he do this regularly?

Banks are even willing to deliver your groceries! Is it not enough if they mail you the statement of account? Let us not imagine that all the customers are computer-savvy. There are a number of senior citizens with their life savings in the bank who would like to be treated kindly at the counter.

What the banks should do is to speed up the collection process, receive the customers with a smile and attend to their needs promptly. A customer expects a fair treatment and not a `Coffee Treat"!

(The author is a retired General Manager, Bank of India.)

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