Earn the salary and not take it

Mr Ananthakrishna is a dedicated banker and he deserves to be Congratulated for his election as a part time Non Executive Director of the bank.More than him the bank is the beneficiary in getting such persons on the Board.He had risen to the Chairman of Karnataka Bank from ranks and he earned the elevation out of his hard work,commitment and loyalty to the bank.He was with the bank when it was facing merger,if not liqiudation completely.He had toiled for the bank and given his best ignoring all persoanl comforts and luxuries for its growth and he ensured that the bank is one of the top performers among Private sector Banks.He is a banker worth emulating by the present Generation of bankers and banking officials.The present banking system which is becoming a borrower of funds than the deposit mobilser and then lender needs to learn a lot of banking from Mr Anantha Krishna who rightly said one has to earn the salary and not to take the salary.The depositing public need to be with banks.

from: Dr.T.V.Gopalakrishnan

(this comment published in Hindu Business Line is in response to a write up I earn the salary and not get it appeared in the Hindu Business line dated 31/08/12).

RBI's arrogance Is it warranted?

Chakrabarty frowns at SBI chief’s views on CRR phase-out

The regulator's toughness is welcome but the arroagnce is not tolerable. The Chief of SBI has every right to make his professional opinion in the interest of commercial banking,the regulator has to be tolerant to appreciate his stand and can have its own regualtory enforcement in a dignified and professional way.The comment from the Regualtor that SBI Chiuef can be elsewhere if he is not for CRR is not only in bad taste but also is something of a very high order not expected from a regulator which has earned its reputation and international recognition for its toughness and efficient regulatory and supervisory mechanism. This sort of comment will be a blot on the Reserve Bank which should carry its regualted institutions well with it in an admirable manner.

from: Dr.T.V.Gopalakrishnan

 ( This appeared in The Hindu-Business Line dated 28/08/12)

 

Appointment of Professionals as Directors in PSBs

	August 27 , 2012, 11:29 IST
The review of appointment Directors in PSBs is a right approach and it needs to be ensured that Directors are real professionals and are able to contribute to banks and economy's growth. Agrculture Small Scale Industries,Financial inclusion, menace of growing NPAs, human Resources are areas the banks need professional guidance and committed approach. The FM will do full justice if he is able to find persons of eminence in Banking, who are committed and fully involved in the efficient functioning of banks which has become very essential and the need of the hour to give a boost to the economy. (This comment in response to a news item FM to review appointment of Directors in PSB banks appeared in Business Standard dated 27/08/12)

NPA norms, CRR and SBI Chief

Apropos the report “SBI chief wants NPA rules tweaked” (August 24), banks have umpteen ways of camouflaging non-performing assets (NPAs) and what is finally disclosed is only a percentage of actual NPAs; the Reserve Bank of India (RBI) has absolutely no way of arriving at the correct position of NPAs. The norms for arriving at NPAs have been fixed and are based on international standards. It is for banks to discipline borrowers and educate them to adhere to regulatory requirements. NPAs have to be kept as low as possible and the loss on account of NPAs can’t be expected to be subsidised by any other stakeholder of the bank.

As far as the cash reserve ratio (CRR) is concerned, RBI has monetary responsibilities and it has to ensure that the macro-economic fundamentals are not only strong but also stable. The chief of India’s largest commercial bank should appreciate the role of RBI and its responsibility to ensure economic growth and price stability for which financial stability and banking stability is a must

This letter appeared in Business Standard dated 27/08/12..

Loss of Revenue because of Non functionig of the units

''If coal is not mined the loss is much more than what has been assessed by the CAG. The non- availability of coal  has been the major handicap for power industries and this has affected the economy very badly. After allocating the mines, if they have not functioned, the  situation is still worse and this should have  caught the attention of the Govt to set things right.This only indicates the Government's supervision in vital areas is missing and thererby causing severe damage to production and revenue gains. This calls for an other assessment of loss to the exchequer and the economy.''
 This is in response to FM's remark that if the units to whom coal mines have been allocated have not functioned where is the loss?

(This appeared in Times of India dated 24/08/12)

Investments in Housing and Gold on the increase

The investments in Gold and Real estate particularly housing have gone up because of1)high level of inflation and negative rate of return by way of interest2)Prevalence of heavy amount of black money due to wrong and ineffective taxation policies and3)lack of investment avenues due to policy paralysis from the Goverment side.The savings rate deregulation has not brought any changes in the interest rates offered by most of the banks and there are no alternative investment avenues other than Gold for the people to take care of ever increasing inflation.Those who can afford to saveie middle Income groups and rich people have better avenues of spending and investments and the opportunities are plenty in the economy as there are no checks or ceiling on the acquisition of properties.The Income tax return does not have column to indicate the very basic information on the assets held by the assessees.There is no way of tracking of investments in Gold or properties and people merrily avoid banks

from: Dr.T.V.Gopalakrishnan

Posted on: Aug 24, 2012 at 08:02 IST in response to the write up on RBI worries on rising housing and Gold prices appeared in The Hindu Business Line dated 24/08/12.

Coalgate Scam

These scandals are indications that theGovtFinances are mismanaged and there is no accountability.The authorities can get away with irresponsible way of handling public money and they are not very serious to improve the fiscal deficit and reduce the burden on common man is what is indicated with the revelation of this scandal under CAG report.When the masses suffer under high inflation and poverty this sort of looting of money cannot stand justice and prudence and for this,the CAG deserves appreciation for disclosing the casualness with which public finances are managed by people who are elected to take care of public welfare.There should be accountability and the loss should be recovered without much loss of time.The Fiscal deficit could have been considerably brought down if not eliminated completely had the losses from 2G and Coal allotment had been avoided.This sort of loss comes to light only through CAG audit and more of such audits should be done to prevent the loss of revenue.

from: Dr.T.V.Gopalakrishnan

 

This is in response to an editorial on the The true Cost of Coalgate in Business line dated 20/08/12.

Posted on: Aug 20, 2012 at 08:32 IST

A more customer-friendly approach to banking needed

Customer service in banks, especially at the branch level where the customer makes his first contact, leaves much to be desired.

Knowledge of banking and the importance of customer service are apparently missing and indifference and ignorance of employees rule the roost. The absence of training and transfer and build up of knowledge have become major casualty and this perhaps can also be a reason for ineffective transmission of various policiesof the Reserve Bank. Ignorance and lack of commitment of officials at the counters puts off customers in no time. This is felt more in new generation high-tech banks.

Several high level committees have been appointed to look into the grievances of customers and improve customer service in banks. But how far they have been able to improve the quality of service and inculcate in the bank officials, particularly at operational levels, the habit of customer service as a way of life and that they are duty bound to improve banks’ business, attract and retain customers with a zero tolerance level for complaints, remains to be seen.

Classification of customers

In practice, customer service depends on the formal or informal classification of customers by banks. Generally, customers are classified as celebrity customers, well- connected customers, high net worth customers, non-resident Indian customers and ordinary customers.

Celebrity customers get all services at their doorsteps just by a phone call and at any point of time. So is the case with well connected customers.. For high net worth customers banks have specialised branches. NRI customers normally are also well taken care of. It is the ordinary customers who are at the mercy of the staff.

Customer satisfaction and customer delight were the slogans progressively propagated by banks over a period, but completely given up these days. No such slogans are heard from any banks these days.

Customer disappointment and customer desperation are the experiences of many a customer and that they silently suffer and put up with such poor service is a fact revealed from contacts and informal surveys with friends, relatives and persons of average means like servants, taxi drivers, small vendors, shop keepers, co-travellers and pensioners.

Ordinary customers who seldom care to take up their problems with the higher ups or do not have the wherewithal to resort to the grievance mechanism of the banks are perhaps the most ignored lot by the authorities while assessing the quality of customer Service.

The grievance mechanism of banks is so designed that it takes time, energy and patience to register the complaint and the customer will think several times before opting for it.

As a result, there are less complaints in official records. Ordinary customers like pensioners, elderly people, and those who are illiterate and have no backing have learned to put up with poor service. It is not practical to resort to grievance mechanism for these customers. If indifference is the issue in public sector banks, ignorance is the problem in new generation banks.

The fact that financial and banking inclusion have not taken off the way the authorities wanted them to is on account of lack of involvement from bank officials and their lackadaisical approach to provide the very minimum customer service. For ordinary customers who just want to save some money either in SB or FD or recurring deposit account, is there any customer service in banks free of hassles?

KYC norm

The concept of Know Your Customer has unfortunately become very handy to keep away the customers instead of understanding the customers, helping them to improve their banking habits, provide them the dignity that they deserve.

The objective of KYC is to eliminate undesirable customers from the point of view of their possible indulgence in illegal and anti-social activities but unfortunately all prospective customers are suspected and kept away by citing some deficiencies in some documents which they provide to banks. The applicability of KYC should arise only after closely seeing the operations in the accounts but in reality, it has been observed as a rule rather than an exception to deny the prospective customers access to any banking service.

Of late, the banks also find comfort in purchasing bulk deposits and borrowing funds from institutions, including the Reserve Bank, to make lending and investment.

The strength of banks depends on mobilised deposits is an established truth. This requires human touch and humane approach. Potential for mobilisation is very huge in this country and people by tradition and habit are savings minded.

Banks have to change their business models and introduce savings products suitable to different categories of customers to attract, retain them and their savings.

Customers, whether small or big, are the main source of business and bank officials at all levels must realise this. Rules, regulations and supervision are only to have some system and order in the business and service to customers is the backbone of banking and its business.

This article appeared in The Hindu-Business Line dated 20th August 2012.