Let us make life simpler by questioning unnecessary and redundant processes

 

Let us make life simpler by questioning unnecessary and redundant processes- Series 1

One day, two strange encounters with two Banks across two continents:

While banking has become quite easy in the internet era, with net banking substantially improving the ease of doing business, I had two frustrating yet interesting encounters with two banks on the same day across two continents. The first one is a bank in Mauritius where I had an account quite some time back and closed for over three to four years back, I had received an unsolicited credit card offer about a year back which I never bothered to activate despite repeated follow up from their so-called marketing (or pestering) team. I was surprised to receive a letter dated early February in my mail box(in mid-March) informing that I had overdue in my so called not yet activated credit card and if it is not cleared by the end of the month(presumably February) the matter will be reported to the country’s Credit Information Bureau, which obviously will impact my ability to avail additional credit(they presumed that I used the not activated credit card to avail credit facilities of low four figure amount, which they had shown as default. A few frantic calls and mail finally bring a response that it was an administrative error (how convenient). I am wondering how a bank can attribute defaults to a non-activated credit card.

Another interesting encounter with a bank where I have recently opened an account. From the day I opened the account, the Relationship Manager pestered me to place some fixed deposit in view of the attractive interest rate being offered by the bank. However, the real fun started when I tried to open a FD through internet banking. I could not proceed with creating the FD as the bank was refusing to take the nominee (same as in my savings account) when I was providing the correct address, as the bank’s internet banking did not have a provision for international address in their system. While the business side was apologetic about the faux pass, the IT team was quite indifferent to their oversight. The solution they offered was to provide a local address to affect the transaction. My question is as to why the Regulator does not standardize the KYC rules for the depositors including for the nominees. Why is the Adhaar not taken as an identification tool?

 

Let us make life simpler by questioning unnecessary and redundant processes- Series 2

I had an interesting experience recently. Had not received the superannuation payments from LIC of India. On enquiring why there has been no payment, I got a mail that I have to submit an Existence Certificate which has to be certified by a gazette officer or a bank manager. Firstly, the institution did not initiate the action at its own end. Secondly, it is a superannuation account where the deposit is already there, and you are only making an annuity payment. In case of a demise, the nominee would have approached the institution anyway. Thirdly, in the current tech enabled world, a video call with your identification documents could have resolved the existence confirmation instead of resorting to archaic processes. I know one insurance company has already initiated the same. Can the insurance regulator and the government initiate a process change?

 

Let us make life simpler by questioning unnecessary and redundant processes-Series 3

A major Indian private sector Bank insists on a branch visit to customer to open a DMat account even when the same customer may have joint D mat accounts with his name as a primary customer, the second person(wife) also has DMat account with the same bank. Both the souses have also accounts the securities trading arm of the bank also. Ideally one should be allowed to open the DMat account electronically in such a case when all the KYCs are available with the bank. While it is impractical for an NRI customer, it is equally redundant exercise for a resident customer. Do not understand the logic of the bank or have I missed something major because of which the bank is insisting on a branch visit?

 

Let us make life simpler by questioning unnecessary and redundant processes- Series 4

I received the following message from one of my banks, a reputed Indian private sector bank, a few months back.
“We refer to the Tax Identification Number (TIN) you had submitted to the Bank for FATCA/CRS Declaration for your Country of Residence. Regulatory authorities have informed that the TIN submitted in your account is incorrect. Under the applicable law, penal consequences can be levied on the Bank for cases were inaccurate, incomplete or false disclosure of statement of financial transactions or reportable accounts by you. The Bank shall be entitled to take any necessary action and recover from you such an amount levied due to such inaccuracy, incompleteness or false disclosure. “. For any compliant customer, it is quite a strongly worded warning by the bank. On an immediate reply citing my TIN to the sender with a copy to my Relationship Manager, I received no response from the sender but thankfully the Relationship Manager mentioned that ReKYC was last updated in 2022, and it is required every 10 years. The explanation still did not address the issue and on telephonic enquiry with the RM, I was asked to ignore the message as it was a system generated message. How can a system generate such wrong letters unless it is programmed incorrectly? My question is that why should banks be harassing compliant customers this way and get away with frivolous excuses. It is time the regulator looks into these areas of customer harassment. Apart from a regulatory fine, compensation to customers will ensure better behavior by banks.

 

Let us make life simpler by questioning unnecessary and redundant processes- Series 5

Recently I initiated the process of creating an FCNR deposit with a reputed Indian private sector bank, where I already have a similar deposit and have been a customer for over 20 years. Funds were transferred to the bank. However, instead of allowing the FCNR deposit creation through internet banking, the bank required physical forms to be signed, scanned, and sent. Following this, they insisted on receiving the physical copies as well, which was arranged for collection by the bank's courier.
This raises a question: why not enable the entire process through internet banking, complemented by a security check via video call if necessary?
But the challenges did not end there. After submitting the application, I was informed by my Relationship Manager that a compliance call would follow. When the call came from the compliance desk, on my registered phone number, it was also attended by a supervisor. The first security question they asked was about my registered phone number—a question I found redundant since they had called me on that very number.
In addition to standard security questions, they asked for details about the quantum of the FCNR deposit, its duration, and the applicable interest rate. I found these questions unnecessary and irrelevant, especially since this information was already available with the bank and does not appear to be appropriate security questions.

It is high time the regulator strived to streamline banking processes to enhance efficiency and accessibility while maintaining robust security standards.

Time to bring in agricultural income to the tax net

While the recent budget has brought some relief to the income tax payers at the lower income end, it is high time we bring in a radical change in the income tax system by introducing tax on agricultural income. While our vision is to become a “Viksit Bharat” by 2047, we are unfortunately in the wrong company with respect to agricultural income taxation. While countries like US, China, UK, Germany, Canada, Australia, France, Brazil and South Africa tax agricultural income(farmers continue to receive incentives on inputs, some with exemption to small farmers and in some countries exempting agricultural properties from inheritance tax), we are unfortunately in the wrong company of Pakistan, Bangladesh, Nigeria, Kenya, Zambia and Uganda in this matter.

At least to start with tax payers with significant other income and farming not being their core activity, should stop getting exemption for their farm income. It is also perhaps more politically feasible. This will plug a major loophole in the system and brings in more tax equity.