Page 233 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes

Caselet Core Banking: RBI’s Half-baked Directions to Banks

lmost all the banks in our country have introduced “core banking solutions”
(CBS), under which, all the branches of each bank are centrally interconnected.
AThis provides the flexibility of operating a bank account opened in one branch of
a bank in any of the other branch of the same bank. But the full benefits of CBS are yet to
percolate down to the banking public, as banks, barring a few, are generally slow in
passing on the benefits to the banking public unless goaded by the banking regulator. As
a first step in this direction, RBI has just come out with guidelines for issuance of “Payable
at par/Multi-city” cheques to all eligible customers in a standard format, so that they are
honoured, if otherwise in order, when presented at all different centres though the clearing
houses as if they are local cheques. Since such cheques (payable at par) are cleared as local
cheques in clearing houses, RBI has directed that customers should not be levied any extra
charges for this service.
This is no doubt a good beginning, but the RBI should have thought of many other
possibilities of offering a wide variety of services using CBS and issued a comprehensive
circular covering all aspects at one stretch which would have served the cause of bank
customers admirably.
Depositing Cash/Cheques in Branches other than the Home Branch
A customer of a bank in Delhi wanted to make a remittance to his son studying in Mumbai.
He has many options to send this remittance, one of which is to simply credit the amount
to his son’s account with the bank in Delhi, whose Mumbai branch is having his son’s
account. So he went to the nearest branch of that bank in Delhi and asked the counter clerk
whether he could deposit cash for credit of his son’s account in Mumbai in the same bank,
as both the branches were under CBS. He was informed that he could do so only if he was
also the account holder of that bank in Delhi. Otherwise the beneficiary of the remittance
would have to pay a hefty charge for receiving such a remittance. As he did not have an
account with that bank in Delhi, he was asked to remit the amount through National
Electronic Funds Transfer mode (NEFT), which was a cheaper mode of remittance, but the
amount would be available to his son only on the next working day. If only the bank had
extended the CBS benefit to the father of the account holder of the bank in another city, life
would have been much simpler and the customer would have received the remittance
quickly and without any hassle and cost. This is a classic case of simple things made
complicated for want of understanding the customer’s needs.

Updating the Passbook in a Branch other than the Home Branch
A pensioner, receiving his pension though his account with a public sector bank in Mumbai
went on a long holiday to stay with his daughter in Chennai. He was very happy to see a
branch of his bank nearby and went to the branch in the first week of the month to get his
pass book written up just to make sure that his pension for the previous month has been
duly credited to his account. He no doubt got his pass book written up, but was surprised
to find a charge of `10 debited to his account for extending this service. He was informed
that this charge was as per the rules of the bank, though, no such charge was levied for
extending the same service in his home branch. The amount of charge may be small for the
bank, but not for a pensioner. Is this not a case of taking advantage of customer’s
predicament?

Contd...

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