Archive | June, 2016

Zero Balance Customers – treat with dignity

4 Jun

This a reflection of my 28 years of experience as a Banking customer across various banks – Central Bank of India, HDFC, ICICI, Standard Chartered Bank, State Bank of Mysore, Corporation Bank, Karnataka Bank, Punjab National Bank, Bank of India, Andhra Bank and Indian Bank and IDBI Bank.    The intent of this mail is to highlight an observation and not pass any remarks on any individual or institution.

Recently we have heard the terms, “Zero Balance Customers”,  “Jan Dhan Yojana Customers”,  “Financial Inclusion Customers”.  These are customers who have very low balance or Nil Balance in their account.   They are living on the edge of the poverty line and have irregular income from agriculture, business or any other occupation.  There are good times and bad times.  When business is flourishing, they deposit a fair sum but quickly disburse the amount to different parties to whom they owe money.   Zero Balance Customers are found in large cities and towns also, among the salaried class,  middle-class and small business owners.  Due to the cyclic nature of business, economic upheavals, job retrenchment, relocation and recession,  people tend to have zero balance in their bank accounts.  Students who have come out of engineering college struggle for nearly 2 years with barely any amount in their bank balance.   This is going to part of life for many more years and many more decades.   There is always going to be an imbalance and several millions will continue to have Zero Balance in their Bank Accounts.

The Government on its part is doing its bit to provide subsidy benefits through the Direct Debit Transfer (DBT) programs. It has made a massive effort to mobilise RBI, NPCI, Banks and all associated institutions to ensure that every Indian has a bank account and is able to transact using a Rupay card. Our Government has also facilitated Aadhaar enrollment reaching almost a billion people. In addition Atal Pension Scheme, Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana are laudable steps to create social security for these customers.   The overdraft (OD) facility is a bold step to encourage use of Banking Channels.  The Mudra Loan Scheme can be a boon for small businesses.  Irrespective of the political party, these schemes are a feather in the cap for our IAS officers,  Govt Secretaries, the Ministry of Finance and the Prime Minister’s Office.

It is observed that many a time, when a Zero Balance customer visits the bank branch, he/she is not treated with the required respect and dignity.  The tone of the voice and the body language of the staff indicates that they are not interested in providing quality service to such customers.  They are often blamed for not filling up the form properly, or for not updating their passbook regularly or not completing their KYC compliance as per procedure.  Such customers do not get proper explanation why certain fees are levied and what can be done to avoid such penalties. The extent of insult and humiliation can vary from bank to bank, from region to region but clearly there is a negative approach towards customers who have Zero Balance in their accounts.   This is a deplorable situation and will make the customer feel insulted and humiliated.  This could be one of the reasons why they resort to other institutions, money lenders, family circles and friends to seek financial help when required.

Some banks are charging Rs 5 per IMPS transaction irrespective of the amount. This is very high for such customers who want to transfer an amount less than Rs 500.    Banks are requested to have a differential rate of IMPS charge –  NIL upto Rs 500,   Rs 2 upto Rs 2000,  Rs 5 for amount upto Rs 5,000 and so on.   This will encourage Zero Balance customers and Jan Dhan Yojana customers to experiment with Mobile Banking, SMS Banking, USSD Banking and start making financial transactions.   The social impact of remitting money to family members is huge.  It can ensure more equitable balance in society even during difficult times.

To summarize, people with Zero Balance need to be provided  extra-ordinary service at Banks so that they can become economically self-sufficient in the days to come.  This slight change in Customer Service will ensure that the good work done by the Government really yields positive results.