Basic financial literacy vital for redressal

On 23 April, I received a desperate sounding email from someone, we will call Ram, about issues with a large private bank. According to Ram, he had written to everybody and I was his ‘last hope’! What followed was a rambling email making a series of allegations, alluding to every recent banking fraud interspersed with vague references to his own problem. At the bottom of multiple trailing emails, was what is ostensibly his first complaint to the bank. The paragraphs alternated bettween red and sky blue fonts sometimes marked in bold. But the content remained garbled with no material facts listed. Honestly, after 30 odd years of helping people resolve grievances, I no longer have the patience to trawl through an email dump. In my days as a cub reporter, it used to be a physical dump of hand written photocopies of letters that one waded through because the person dumping it often claimed it was a scam bigger than Harshad Mehta’s — not any more.

I wrote to Ram asking him to email the bare facts of his case preferably in bulleted points in a chronological sequence. Within minutes I received an irritated response instructing me to find his original complaint at the bottom. When I mentioned that this will not help resolve the issue, it led to a rash of emails accusing me of being unhelpful etc. I simply deleted the emails because I didn’t even want that sitting in my mailbox. The point is, every one of the 20 odd people copied in his email (mainly bank, RBI and government officers) had probably done exactly what I did and hence, the issue remains unresolved.

In over eight years of running Moneylife Foundation, a not-for-profit organisation, where we try and impart financial literacy and help with solving grievances, our biggest learning is this: most people simply do not know how to file complaints and send it to the right forum for resolution. Every activist, who has an experience in helping people, has exactly the same experience. Shailesh Gandhi, Right to Information (RTI) evangalist says this about filing RTI; banker Abhay Datar and engineer Ajit Shenoy, who help people with banking, insurance and consumer complaints, have the same experience as does Sulaiman Bhimani, who is doing excellent work helping file complaints under the Real Estate Regulation Act.

Each one of us faces issues with products and services or attempts to defraud. How does one deal with this? First, stay out of trouble. Don’t fall for strange calls and emails. Checkout offers that are too good to be true or threats to shut your account by writing/calling the official helplines of the bank. Secondly, put everything down in an email immediately; this means, you do not fall for empty assurances from your relationship managers either. Send a follow up email, to document the promises you have been made verbally and copy the email to the bank nodal officer. When it comes to banks, the Reserve Bank of India (RBI) has laid down a very clear procedure. A bank depositor has to take up the issue at the branch level or the nodal officer. One can approach the Banking Ombudsman (which provides a fast and inexpensive grievance redress process) only if the bank fails to respond or refuses to resolve the issue. Unfortunately, most people do not read the Banking Ombudsman (BO) regulations and their complaints are rejected as non-maintainable. Not knowing the rules and procedures or bothering to find out is the second biggest reason why complaints are not redressed.

A few weeks ago, a well known author posted a tweet-thread about the travails faced by her 80-year old mother, a retired State Bank of India (SBI) employee, to get her life certificate. A callous officer had forgotten to forward the life certificate, after having made her travel across Mumbai on multiple occassions to complete formalities. Consequently, her pension was stopped for few months until the issue was resolved. I was startled to see a tweet from the CEO of a well-known mutual fund, whose family comprises of many retired State Bankers say his mother had a similar experience. If this can happen to senior citizens who are bankers themselves, we can only imagine how other pensioners are treated.

I raised this issue with Mr D G Kale, former Chief General Manager of the RBI, who has the longest stint at the Customer Services department and has probably helped draft most of the rules that apply to us today. His immediate response to the two cases was to point to an RBI circular which said that pensioners can submit their life certificate to their nearest bank branch and this rule was specifically incorporated to prevent harassment of pensioners. What happens when banks refuse to accept the certificate? Simple, he says, follow the process and take it up with the Banking Ombudsman. In my view, this will work best if there are severe consequences for the bank official caught harassing customers.

Until that happens, we, as consumers need to focus on filing complaints, quickly, correctly, to the right redress authority and spend a little time on very basic financial literacy.