Customer Service and poor Customers.Better to Be philosophical

Less said the better about the Governance and Justice being meted out to the ultimate Customers from Service organisations particularly banks and Financial Institutions . Technology has become a cover to evade very customers with whose support the very entity survives and being in business. KYC has been done based on documents and KEEP YOUR CUSTOMERS AWAY has been practised and KILL YOUR CUSTOMERS eventually has been going on unquestioned from any corner. Technology being the most efficient and supportive way of easing the work has unfortunately become very handy to keep customers silenced and make them suffer desperately. Nothing can be done is the fait accompli. What a miserable and pitiable Change in the human attitude behind the wonderful technology is what the people / Customers wonder and suffer helplessly . God Save the people and the totally indifferent service providers.

Service depends on Contacts , Influence and good individual employees having some good brought up background, conscience, empathy and human consideration. These numbers dwindle day by day. Unfortunately these qualities are becoming liabilities and head aches. Better for Customers  to put up with what  are destined to get. Be philosophical and accept what comes in our stride.  Make Life Less Miserable by avoiding Service Providers to the extent possible. Create ones own peaceful  Destiny by being creative and innovative and  by all means  minimising dependence on service providers as far as possible.  

Dr T V G Krishnan

( A part of this comment appeared in Business Standard dated 15th SEPT 2021 against the article Good Governance despite differences). 

 

IT PORTAL, INCOME TAX COLLECTION AND TAX PAYERS.

 The Glitches in the IT PORTAL are only  due to the complications and problems in the taxation policy basically suspecting all tax payers for evasion of taxes. No doubt tax evasion is huge but harassing the tax payers as such will not fetch any result . The tax augmentation can only be  through to target the tax at source and be after the tax collectors.  The dividend tax , the capital gains tax , the exemptions , and two methods of taxes with exemption and without exemptions all create complications and blaming the INFOSYS for complicated tax policies is of no use. The need to augment revenue to the Government is genuine but the approach should be simple, supportive of the measures and as easy as possible to collect. It is time to have an Introspection and debate and discussions on the subject involving tax veterans ,Chartered acountants, bureaucrats having noble intentions and thoughts,  IT wizards,and representatives of tax payers . AS far as possible, tax at source is the best option and filing of returns for non salary earners above a cut off point can be a workable mechanism. Machines alone cannot do the magic to satisfy the Government's needs.

Tax collections can improve only through enhanced GDP,  EFFICIENT AND CORRUPTION FREE ADMINISTRATION, SIMPLIFIED TAXES,  SYSTEMS AND PROCEDURES,   ENLIGHTENED AND VERY RESPONSIBLE, TAX COMPLIANT CITIZENS AND HIGHLY COMMITTED BUREAUCRATS, CORPORATES AND ABOVE ALL ENCOURAGING  POLITICAL, SOCIAL  AND ECONOMIC ENVIRONMENT SUPPLEMENTED BY HASSLE FREE TECHNOLOGY AND  ADHERENCE TO HIGHEST STANRDS OF ETHICS.THE TASK IS ENORMOUS BUT DEFINITELY ACHIEVABLE . IF THERE IS A WILL, THERE IS A WAY.       

TVG KRISHNAN.

IPO boom , Capital market , general degeneration of values and less of regulatory controls.

The new crop of investors  in capital market seem to be comparatively well off compared to those investors of the 1990s thanks to ever widening gap between the rich and poor. Further, unlike in the past , people get used to the frauds and loots which are becoming a routine for reasons not so far fathomed out. Frauds in banks have become a business model and loot through insurance business is becoming a way of life. Unlike in the past , the meticulous approach to save, calculate , be prudent with expenditures etc. are fast disappearing thanks to invasion of technology and planned / unplanned erosion of values coupled with lack of accountability. People feel helpless but prefer to suffer silently seem to be the only way out to have peace and be free from hassles. JANE DO attitude is widely prevalent and the acceptance of loss of money as part of modern living and minimizing risk of loss is becoming a philosophy. The next bigger scam after the Harshad Mehta and NSE scam , in line perhaps would be general Insurance in general and Life Insurance in particular, closely followed by IPOs loot and vanishing of companies . Stock market boom is a proof of growing inequality and despite sane alerts from knowledgeable quarters , fresh investors get attracted is a reality indicated by ever increasing number  of D mat accounts. All said some right thinking wise people and perhaps some old generation and aged people have some worries about all these but how far they are heard is a big question mark. Silence is becoming better part of valor and discretion. 

Dr T V G Krishnan

15/08/21.

( This comment appeared in Money Life against the Article on IPO Boom ) 

Re

RBI , Banks, RTI and Inspection Reports.

 

RBI RTI and Inspection Reports.

The banks suffer from bad borrowers and the entire economy, the people, investors, depositors of banks,general customers and the Government bear the brunt as the banks' contribution to the accrual of the economy and benefits to the society get nullified because of the bad debts. From this angle, there is nothing wrong if banks in their own interest make it public the list of bad borrowers and perhaps the reasons for bad debts , the difficulties in recovering the bad debts including the legal hurdles and other pressures. The losses that banks incur directly and indirectly because of the bad debts can also be brought to public notice if needed. The release of inspection  report can perhaps be made selective in such a manner that the trust  based on which banks function should not  be disturbed. Definitely public should know as to how banks misuse the depositors funds and where they fail to deliver because of lack of professionalism and accountability  and mismanagement of public funds. It is time for RBI to revisit and take a review of the Inspection Reports and make it clear as to what is to be released under RTI Act and what is  not to be released to protect the so called fiduciary responsibilities. The function of Banking is  unique and it cannot be equated with other organisations and corporates.All said the misuse./ abuse of technology, failure in Governance standards to exploit fiduciary responsiblities etc need to be very closely monitored by RBI and public should get the feel that the banks function very safe and all the stake holders benefit with tangible results. The banks' balance sheets also should carry  in brief if possible the STRENGTHS and WEAKNESSES of Banks as indicated by RBI in its Inspection Reports. The Much needed TRUST in banks cannot be allowed to be eroded because of the avoidable transparency as per RTI act but at the same time the release of inspection findings to public in a selective manner should definitely pave way for enhancing the quality of borrowers and performance of banks. 

Dr TVG 

( This comment appeared slightly in a modified manner in the Business Standard Dated 20/7/21.    

RBI Governor says RBI will bring in Financial Inclusion Index.Is there any Mindset for bankers?

 

If Financial Inclusion has to be made a reality it should start from down trodden and vulnerable sections of the society. Class banking and keep the Customers away approach  presently pursued  by banks including PSU banks using / abusing technology to the most disadvantage of all categories of deposit customers in particular needs to be totally stopped. Customers should feel confident and trust the banks for any deals. The way customers are taken for a clean ride by the most sophisticated banks keep away even small customers from approaching banks for any deals. This reflects in the growth of NON Banking FIN companies dealing in Gold loans. Banks have forgotten Customer Service is a fact and there are no grievance Mechanisms whatsoever is a tragedy. In this background, Financial Inclusion can only generate problems for the Regulator as banks have never the feel of Customers and their survival depends on customers is merrily ignored or rather not understood. The expectations of the Governor that the banks would entertain the lowest category of the society though a very laudable objective are misplaced. High time RBI goes in for a survey among the people including those who need to be included under Financial Inclusion and decide ways and means to correct the banks first and then think of enrolling them for laudable objectives. Ground realities of late are gloomy. Financial Inclusion Index can come only if there is Financial Inclusion at ground level and bankers have a mindset to come to the rescue of the really deserving people from the lowest strata of society. Such bankers are yet to be made or invented.  

 

Dr T V G

 

July 16, 2021,

(This comment appeared in Business Standard dated 15th July 2021 ).

 

RBI to conduct customer satisfaction survey on impact of bank mergers

 This survey is welcome with the very limited objective of assessing how the Customers feel and satisfied with the changed bank and its services after the merger of banks.   But the better approach for RBI would be to have a full fledged customer service Survey  from all banks including the so called well run private sector banks. The survey should inter- alia  include collection of various types of service Charges , Credit card charges,, internet banking  and other services fees like Locker facility, issue of travel cards  provided by banks. The fact remains that the Customers cannot get in touch with the bank by any means unlike in the past where the Customers can lodge complaints to RBI and banks branches. Phone contacts are completely ruled out. In case by any chance he gets some official to discuss the problem, the ignorance of the staff gets exposed and the customer gets all the more frustrated / confused.Some techno savvy customers can perhaps with great difficulty register some complaints and they get standardised and recorded message /replies without having any reference to the complaints and attending to them.  The call centres set up by the banks are criminal waste of man power , energy and money.  Even if they answer after making  one to go through a series of hassles , the reply one gets only takes you back to square one. Of course it makes one to be patient and finally give up the complaint benefiting the bank. The sorry state of affair is that even the rudimentary knowledge of banking is unfortunately missing in the replies even if the replies come from a fairly higher level. If at all RBI can do something, better it should find ways and means to educate and enhances the banking literacy among bankers and financial literacy among Customers. Hope something concrete would be done by RBI by understanding the big disconnection seen between bankers and customers these days. While analysing the banks' profitability if any by the RBI, it should ensure that the miscellaneous charges and various other charges levied from customers of all kinds are as per RBI guidelines if any and banks do not exploit the customers ignorance of bank charges, technology and take advantage of regulation and supervision lapses and technology dominance .Fair trade practices seem to be absent  is what the Customers generally feel and there is no one to hear leave alone to address the Customers' grievances.

Dr TVG

At last never before perfect Coordination between the Central Government and RBI is a reality.

 It is really heartening to observe that The Reserve Bank of India while keeping its well recognised professionalism and statutory commitment intact, has come out with its very accommodative and supportive bold   monetary policy   to secure not only monetary stability in India but also to meet the challenges of an increasing complex economy which got badly hurt due to the unprecedented and unheard of covid 19 pandemic.  The monetary policy gives the much needed fillip   to maintain price stability and ensure economic growth overcoming the uncertainties and hurdles from all fronts particularly the financial markets, institutions and instruments. The readiness and assurance from the Governor to act as per the requirements of the dynamics of the economy would definitely set the foundation strong to make the economy perform and deliver as per the expectations of the Government to reach the$ 5 trillion at the earliest.  

With this very liberalised and bold approach both from the Government and the RBI the economy can enter the fast track soon and leave aside all the negatives so far faced to kick start the economy and make it perform to its full potential. Very imaginative and innovative fiscal policies of the Central Government and the very accommodative and supportive monetary policy of the Central Bank, the path is clear now for the economy to move fast and the never before Perfect Coordination between the Central Government and RBI now visible can help the economy only to move in one direction i.e. to move up and forward without looking back and with record breaking results all around.

The RBI’s conservative estimate of GDP growth at 10.5% as against the Economic Survey’s projection of 11% and its policy stance to continue to be accommodative to achieve this growth keeping the inflation at 5.2% well within the band fixed by the Monetary Policy Committee give both encouragement and relief for all the vital sectors to perform under the favourable environment   of financial and monetary stability. The key take away of the policy is to keep the policy rate unchanged at 4%, Reverse Repo rate at 3.35%, MSF and bank rate at 4.25%.which will help to put into optimum use the resources at the command of the borrowers, market operators and the Government without any uncertainties on the availability of liquidity, reasonably cheap credit both from India and abroad, and other needed support for production, transportation and distribution. The restoration of CRR in two phases to 4%,, support to NBFCs by way of LTRO facility on tap scheme and measures to streamline digital payments system, strengthening of the banking Ombudsman, better regulation of Cooperative banks and NBFC segments are some of the measures well intended to reinforce the much needed credibility in the effective functioning of institutions in the financial markets. Once the Financial System gets well stabilised in terms of healthy, sound and dynamic financial institutions, with stable, dependable, deep, wide and sound markets and dynamic and comparatively risk free products, the end users of the system i.e. the producers of all kinds of goods and services and the consumers can become active without any hesitation of any kind and the result is nothing but the growth of the economy. Governance of the financial system is the key to the development and the Reserve Bank seems to be very much alive to the requirement as is evidenced by many of its policy initiatives highlighted in the policy announcement. The notable highlight of the policy is the opening of the Government Securities Market to retailers and that too by allowing them to have accounts with the Reserve bank direct. This can help not only to widen and deepen the securities market but also strengthen the entire financial markets in varied ways helping the market players to be innovative and find ways and means to contain undue volatility, minimise mismatches in their balance sheets. This may also bring some solace to the Government to its fiscal balancing exercise.   

The development of infrastructure is the key to kick start the economy and the Government’s liberalised approach despite financial constraints and regulatory disciplines on the fiscal deficit front is an exceptionally bold step in the present precarious conditions the economy has been dragged in. This should pave way to enhance the long overdue demand driven expansion of the economy all round in terms of manufactured products, generation of employment, movement of goods and services. Various budgetary provisions seem to have bolstered the confidence level at all levels of investors, producers, service providers, and all those who matter in the matter. Once the confidence in the capability of our full potential to take the economy forward is regained fully, there cannot be any sort of stumbling block is what is made known through this years’ budget although there are some gaps left in some areas like satisfying the lower middle class, pensioners, vulnerable senior citizens, many in the unorganised sector and tourism as well.

All said the fact remains that this year’s budget announcement closely followed by the Reserve Bank’s very supportive monetary policy announcement has given a morale boost to all stake holders of the economy to perform well.  It is very apt to quote here the observations of the Governor of the Reserve bank when he concluded his monetary policy announcement that “I would like to say that, going forward, the Indian economy is poised to move in only one direction and that is upwards. It is our strong conviction, backed by forecasts, that in 2021-22, we would undo the damage that COVID-19 has inflicted on the economy. After the chaos and despair of the year gone by, through which we have sailed together and shall continue to sail ahead, the overall situation can be best described in the words of Mahatma Gandhi, “We are daily witnessing the phenomenon of the impossible of yesterday becoming the possible of today …”

The perfect understanding and the coordination (which was missing for decades) expected of the Central government and the Central bank in initiating economic and monetary policies in the best interests of the Economy and the people seem to have at last reached now and this augurs well for the all round welfare of all .Good Going indeed to realise the dream Atmanirbhar Bharath.

TVG Krishnan

5/2/2021                        

The economy got a vaccination at last. Well Done FM

The economy got a vaccination to get a boost at last through the budget 2021-22. The positive side of covid pandemic has brought in some sensitive changes in the thinking of policy makers and the economy got the much needed animal spirit to perform. As is always the case, the implementation of various proposals  is the key and hope the bureacrats, administrators , enforcement authorities, bankers, and right thinking public would cooperate with the Government and take the economy forward . Well done FM. 

TVG Krishnan

Why not delink all Capital gains tax from Income Tax?

                           

It is heartening to observe that  despite the slowdown of  the economy  for  more than 9 months on account of  Covid pandemic and its  related adversaries affecting all economic activities the capital market has attracted fresh investments  and by and large all IPOs have been a grand success with several times oversubscription. The capital market is booming and the average per day turnover in the markets has been reportedly in the range of about Rs Rs 80000 crores. With the improved performance of real estate business and some of the commodity markets,  the revenue earning potential of the Government through Capital gains, Security Transaction tax and other levies  has substantially gone up  and by nature  these revenues are non inflationary in character helping the economy and people a lot. It would be ideal in this background to think of streamlining the mode of Capital Gains Tax and make it totally independent of Income tax.  As it is, there is lot of hue and cry to abolish the Income tax as the collections of taxes and the costs and hassles involved in collecting the taxes do not favour continuance of this tax. Delinking of capital gains tax from Income tax not only bring lot of relief to the tax administration but also would help income tax payers particularly salaried class and pensioners who generally keep away from capital market and speculative investments. All capital gains tax, dividend tax, and Security Transaction tax can be preferably collected at source instantly  using the technology optimally and doing away with filing of returns if desired.  Just like general customers paying GST not filing Returns, the capital market investors in particular can be free of filing of returns as the taxes get collected instantly and there is no need to have a further follow up wasting national resources. Simplicity in both tax collections and tax compliance get accomplished simultaneously.

 Similarly, If bank transaction tax is introduced, even the very income tax can be abolished and the Government can make the transaction tax system more dynamic in such a way that the possible loss on account of income tax abolition can be made good by having different rates of transaction tax for bank account holders based on their deposits and other parameters of Credit card operations and like that. Any credit transaction including salary and other credit of any kind can have a higher transaction tax in lieu of income tax .This can  be different  compared to  the rate applicable to debit transactions.

 The objective of meeting  revenue targets and compliance of tax payments of different tax levies can be met by reforming the modes of tax collections without filing of returns and   ensuring ease of doing business and living as well .Both the Government and Tax payers stand to benefit by detaching capital gains tax from Income tax and introducing bank transaction tax .Use of technology and the readiness to change the modes of tax collection matter a lot to augment tax resources, tax simplification, tax compliance and minimise tax evasion.

Dr T V Gopalakrishnan     

A very good move from the Reserve Bank to strengthen the Supervision of banks.

 Both the bankers and Supervisors have to understand that banks deal with public money based on Trust and the loot of the money through advances and frauds cannot be TOLERATED.. The deposits and tax payers moneywith which banks particularly Public Sector Banks function, have some sentiments and no one can be allowed to hurt the sentiments by taking away the funds without contributing to the economy and general good of the public.Hope the College of Supervisors being strenghtened by the Reserve Bank will live upto expectations and save the banking system from bad borrowers  and fraudsters..The loss to the economy and the general public accruing perennially  because of the financial unsoundness of banks is some thing incalculable which needs to be arrested and the banks should be turned into well performing assets by eliminating the non performing loans in their books.   

 TVGKrishnan