Banking services - RBI's role

Bank is one institution on which every citizen bestows confidence and trust and deploys hard earned money. It is the credit to media and news coverage in recent times that expose serious frauds, corrupt and illegal acts committed by the banks.

Banks have ventured into other areas of businesses, apart from the banking business and have even branched out into insurance, mutual funds as offshoots of the original bank. These could easily be referred as group companies.

Banks indulge in unfair trade practices of even imposing some of the group company products on its account holders and don't hesitate to share KYC details with others even if it amounts to violation of data protection act.

Banks liberally fund the requirements of big names in corporate sector, whether they meet the credit ratings required, whether the bank's own credit rating is negative and for various considerations that are not part of banking norms.

Banks even fund a corporate with branch in Singapore or elsewhere but is basically India based and such offshore branch utilises/transfers the funds lent outside India, by an Indian bank; to its Indian counterpart for investment in different projects. In contrast, an average person in India is discouraged for requirements in India becasue the person does not boast of any big names of influence.

Banks are now focusing on rural accounts where banks did not dare venture before because of easy money coming into the bank, by way of savings accounts (attracts peanuts as interest that too if certain criteria are met) and current account (where the funds in the account never get any interest of any nature).

Even when RBI guidelines state that banks should allow zero balance accounts under savings accounts, Banks don't adhere to the dictum of RBI and always find ways to debit the savings account for not maintaining minimum balance. I know of a bank which deducts about Rs. 400/- per month just because the account holder earning Rs. 17,000/- a month is not maintaining a minimum balance of Rs. 10,000/- a month???!!!

Banks charge for debit cards issued on annula basis and debit cards are given to ease its work load in the branches. Sometimes the branch refuses to encash cheques for less than 1,000/- and directs the a/c holder to withdraw from the ATM.

Now, ATM useage is being brought under service charges, whether home bank or other bank.

There is a bank which charges fee and imposes service tax on cash deposited in one of its own bank branches for credit card payment. In the normal business practices, cash payment attracts certain discounts but in the case of this bank, cash payment attracts a fee and service tax.

Banks indulge in inventing fake documents to deprive account holder of certain benefits covenanted.

Banks indulge in forgery of cheques, alter the dates on the cheque to get it dishonored, claim dishonor charges and amounts, collect much higher amounts than the cheque amount, don't return such cheques despite payment of even higher amounts against that cheque, so that the bank can vest in itself the undue and illegal rights to claim that cheque amount at a later date with further charges and penal interests.

There is no end to the ingenuinity applied by banks to deceive, deny the account holder and drain his/her money but also defame in the family, social and financial segment.

Banks promptly list the account holder as defaulter on the platform of CIBIL to restrict such person from obtaining any facility from elsewhere even when the bank is the defaulter and not the account holder.

CIBIL is just a book-keeper who maintains a person's financial data as provided to them by the banks and without any vetting on the authenticity of such data that the bank provides.

There is no platform such as CIBIL to maintain list of banks that are wilful defaulters and are cheats.

RBI - the Inidan regulator in finance segment is fully aware of all the above and many more such illegalities that banks indulge in where the integrity and performance of such banks do not get questioned nor punished to match the gravity of illegality committed by such banks.

RBI has an easy escape root in the name of "Banking Ombudsman" which generally is a single person entity and is often than never found to lean in favor of the erring bank rather than the innocent victim who is traumatised.

RBI turns blind eye and deaf ears to the plight of innocent banking and financial victims and even would go out of the way to favor the erring banks.

Should such RBI also go the way RTO seems to be going, if media reports are any guide?

Even if a new body is created, the same persons would get drafted into the new body and no matrial difference could emerge.

So, my dear citizens, where lies the remedy to such a serious problem of banks indulging in criminal breach of trust? more