Of missing cheques and consumer woes

Of missing cheques and consumer woes
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First Published: Mon, Apr 21 2008. 12 16 AM IST

Updated: Mon, Apr 21 2008. 12 16 AM IST
I bank with a technology-savvy, new private bank. In mid-February, I deposited two cheques in my savings account. Both the cheques were put into the drop box at an ATM location of the bank in a Mumbai suburb where I live. About three weeks later, in March, I noticed that money had not yet been credited to my account. The bank’s customer care cell insisted that the cheques were never deposited.
Even though I was holding a copy of the receipt that had the details of the cheques, such as their numbers, names of the issuing banks and date of deposit, how could I prove that I had actually deposited them? So, I blamed my driver. My cheques must have found their way into the drop box of a foreign bank’s ATM, located next to my bank’s ATM, thanks to my driver’s carelessness.
The foreign bank immediately conducted a thorough search for the two missing cheques, but it couldn’t find them either.
So, I shifted the blame back to my bank and asked the customer care executive to check the footage of the video recording that all ATMs are expected to keep. Since I was furnishing all information regarding the date and time of depositing the two cheques, it would not be a difficult job for the bank to detect whether I was lying. But, my bank was not ready to do all these. Instead, the customer care executive suggested an easy way out—I must instruct the bank from where these instruments originated to issue a stop-payment order and give me two fresh cheques. This will ensure that nobody can encash these cheques.
I had no choice but to agree to what he said as the money was mine. I wish here the story ended. But, it didn’t. Almost six weeks after the stop-payment order was issued, and 11 weeks after the original two cheques were deposited, I got back the cheques this month. My bank sent them with a note saying the money couldn’t be credited to my account because of the stop-payment order!
As I am writing this column, a senior executive of the bank called me to say that going by the bank’s record, the cheques were deposited on 4 April and not mid-February as I had claimed. He has promised to look into this absurd drama.
It is no surprise then that the number of customer complaints filed with the Reserve Bank of India’s 15 ombudsmen across India has been growing. The Indian central bank last week put out the annual report of the banking ombudsman scheme 2006-07 on its website. In 2007, offices of the banking ombudsman received 38,638 complaints, 22% more than those received in the previous year. There are two reasons behind the sudden surge in the number of complaints: the inclusion of credit card complaints under the ombudsman scheme and, second, allowing bank customers to submit complaints online through email. Mumbai, New Delhi and Kanpur topped the list with the maximum number of complaints received.
Guwahati, which covers the seven north-eastern states, received just 170 complaints, primarily, I suspect, because of low penetration of banking activities in the region.
The annual report has some interesting case studies. For instance, one bank was charging 60% for a personal loan and another 48%, inclusive of processing fees and other charges, after promising to offer such a loan at 18%. Another complaint was regarding selling insurance products and collecting premiums from a credit card holder without the person’s consent. In this case, the bank insisted that it had obtained the card holder’s consent, but couldn’t prove it.
Yet another case study refers to a bank wrongly classifying a credit card holder as a defaulter and passing on the information to a credit information bureau. Even though the bank realized the mistake and apologized to the credit card holder, it never conveyed that to the bureau. As a result, the card holder could not get a loan from another bank. In this case, the banking ombudsman directed the credit card issuer to pay Rs25,000 to the customer as compensation.
In 2007, the ombudsman offices handled 44,766 complaints. Some 49% of them, or 21,474 complaints, were settled, but 15,914 (36%) complaints could not be addressed for various reasons.
The maximum number of complaints dealt with in the past five years related to deposit accounts, poor servicing of loans and delay in collection of cheques. In 2007, credit card-related complaints topped the list. There is no surprise here as such complaints were first considered by the ombudsman scheme in 2007.
In 2007, there were 10,543 complaints against nationalized banks, which in fiscal 2006 had Rs17.4 trillion worth of business and 292.5 million customers holding deposit and credit accounts. The State Bank group, with Rs8.4 trillion worth of business and 127.9 million customers as on March 2006, had to face 11,117 complaints. The comparative figures for foreign banks were 3,803 complaints, Rs2.1 trillion business and 13 million customers. Private and cooperative banks collectively had Rs7.1 trillion business and 64 million customers, and there were 9,036 complaints against them.
Indeed, banks’ business has been growing at a faster pace than customers’ complaints, but, I cannot be happy with my bank if cheques disappear from the drop box and mysteriously reappear six weeks later after stop-payment orders, issued at the behest of the bank itself. I shudder to think of all the customers who don’t have the opportunity to write about it like I can in this column.
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First Published: Mon, Apr 21 2008. 12 16 AM IST