Banks' IT and Customer service.

IT has not  reduced banks' cost but it  has definitely  removed the Customer Service from banks is an undisputed fact. .Now the Customers are at the mercy of banks and the Technology. The fact remains that human touch and the values of human behaviour, relationships and the understanding of customers are all missing and all are suffering.  Customers who used to have the pleasure of going to banks ,interacting with other customers  and bank officials are avoiding visits to banks if possible and this culture of having some cordial interactions with banks ' officais has been virtually absent. The Staff attached to banks also seldom show any interest to interact with the customers , or give a smile or even to recognise his presence in the bank premises.So goes the Customer Service in Banks. Service depends on the intelligence fed into the machines but as of today one cannot have the feeling that  the intelligence  is available.

Dr T V Gopalakrishnan .  

Employment Survey and Better inclusive Growth.

The employment survey is very essential as many are self employed in lots of ancillary services earning in lakhs in major cities and having apparently no knowledge of the taxation system , or anything about the financial literacy and excluding themselves from the formal banking system. Now in major cities like Bangalore, Mumbai, Chennai, Calcutta , Delhi etc, maid servants are understood to be earning around Rs 15000 to 20000 per month on an average covering about six or seven houses, milk vendors are earning in thousands by way of Commission and service charges, Car washers in major gated Communities are earning in thousands by charging on an average 400 to 500 Rs per month per car washing many cars, and  fruits and vegetable vendors are doing roaring business having their establishments in front of housing complexes with flats and independent houses numbering more than 1000s.. One is very happy to see that people are really industrious and enterprising but they do not seem to be included in Banking and other employment details. They do provide lot of services but seem to be outside the purview of employment details and statistics gathered for the purposes of GDP, employment, provision of subsidies, and augmentation of revenues to the Government..While many get employed and most of them make good money but many suffer for want of proper accommodation, medical facilities, educational support for their children. They are also harassed and exploited  with corrupt practices and extracting money informally with or without the knowledge of authorities. They need better attention, guidance and inclusion in the formal system of banking and financial inclusion. The informal economy needs to be brought under formal economy for the over all development of the economy and better welfare for people at large. Dr T V Gopalakrishnan.

Human Intervention is a must to fix Frauds and NPAs in banks.

The problem in banks lies not in adhering to KYC norms but in Not Understanding the Customer ie UYC. The transactions when done in a concentrated manner confined to some  few accounts which are of recent origin should naturally arise some suspicion in the minds of officials. This does not happen in our scheme of things as mostly these are done using Technology without having any scope for human intervention. Here in lies the problem. There should be some human intervention to track transactions of suspicious nature and this can be done  only through outsourcing some experts having exposure to inspections and scrutiny of accounts in bank branches.. The  problem is that RBI seems to have stopped inspection of major branches particularly branches having huge Forex Business. The scrutiny of accounts on a surprise basis needs to be carried out in major branches by experts in Forex and loan accounts. Both Frauds and NPA problems can be fixed to a great extent by this approach

Dr T V Gopalakrishnan

Make STT an Important administrative tool to Contain Volatility in the market

Develop STT as an important tool to contain volatility in the market, undue speculation, and to augment revenue without any administrative hassles. There can be different rates of STT for purchases and sales and for amounts exceeding certain cut off limits fixed for sales and purchases. Retailers doing transactions for less than a cut off limit can be given even an exemption to encourage retail participation in the market. Over a period, the approach should be to remove the capital gains tax by suitably modifying the STT for revenue loss if any. STT can also be different for Individuals, Institutions, MFs and FIIs. Dr T V Gopalakrishnan (This comment appeared in Business Line dated 23/10/15)

IPOs and Gullible Investors

 Almost all IPOs have trapped fresh investors. Declaration of dividend just before the IPOs is a clear indication that after the IPOs , no dividends would be declared for years to come. If SEBI were to analyse the performance of Companies which have gone for IPOs and raised capital during the last five years or so can easily observe that the Companies have duped the investors and they have not seen the IPO price after listing. IPOs pricing is greedy and aggressive and SEBI does not seem to have any say in the matter.

Dr T V Gopalakrishnan

(This comment is published in BS dated 23/10/15).

Business and Human resources Risks in Banks not easily measurable.

The quantitative measurements some of the risks in banks  is ok to some extent where the Regulation and supervision are meticulously adhered to and banks are allowed to run on professioal lines without any interference from the Government. and the accounts are not allowed to be manipulated in any way. The over all business risks  are not based on any mathematical models and the element of human risk at least in Indian Context has not been brought under any assessment.The business risks thanks to interference of the Government on day to day running of banks, deployment of credit to preferred segments and chosen projects and financial support to the Government  through statutory Liquidity requirements etc gets distorted to a great extent  and are not measurable by best of mathematical formula. Similarly the human risks in running the business are not subjected to any assessment and both the business Risks and human Risks qualitatively affect the business models and are not easily measurable in the absence of any serious thought as in the case of other risks. Since banks deal in money and with human resources and both are very sensitive to handle. the risks measurement approach  presently in vogue cannot be  a foolproof  method to prevent financial weaknesses and failures.  

Dr T V Gopalakrishnan 

Poverty Elimination and Institutions

The article offers lots of food for thought to the poor  and to those who head institutions which are specifically opened with lots of Pomp and Show to eliminate poverty in the Country Some such institutions are Cooperative Banks Regional Rural Banks, NGOs, Local area Banks , with an Apex Institution called National Agriculture and Rural Development Institution set up in 1982 to give a lead. It is high time the Government in power evaluate these Institutions and how far they have done justice to the objectives with which they are all set up.Except perhaps NGOs, other Institutions cannot justify their existence in helping the rural development and elimination of poverty through agricultural advancement.The farmers are committing Suicide and these Institutions merrily survive enjoying the budgetary support and all other Concessions that come to them from different sources in the name of of agriculture and rural development.The role of NABARD definitely calls for a very quick revisit in the matter.The resources wasted on these institutions if given as subsidies and incentives to the rural people and farmers , they would have themselves flourished and the present situation of poverty and poor agricultural production could have been avoided. The role Local Boards of RBI played , also needs to be urgently reviewed as they can definitely contribute to the development of rural and agriculture development with their involvement in guiding, assisting, supporting, and providing the expert advice to the State Governments and the Institutions and coordinating  their activities and bringing to the notice of the Central Government the updates on various issues related to the rural and agricultural development. The Production and supply Constraints faced by the entire Community can be easily addressed if the Local Boards of RBI is activated and given  importance in effectively involving themselves in the development of the all the four regions with a competitive spirit. Any office set up should prove itself worthy of continuing with its performance in terms of qualitative improvement in achieving the objectives with which they are ser up.

Dr T V Gopalakrishnan

(This comment is in response to the write up on Breaking the Bonds of Rural poverty that appeared on the world Food day in the Hindu dated 16/10/2015).