An attitudinal problem is on display in the move by several banks to charge fees and penalties for transactions that exceed a specified number. Various depositor associations are meeting to find out how they can oppose what essentially (and admittedly) are penalties – the precise term used by the State Bank of India – on depositors withdrawing or depositing their own money at a place and time of their choosing.
The charges will be levied on transactions beyond four or five free withdrawal/deposit transactions every month, and many banks seemed to have simultaneously warmed up to the idea and want to implement it beginning 1 April. What this presents is a picture of banks standing together in conflict with ordinary citizens, an image that hardly does credit either to the banking system, particularly the large PSU banks, or the government, so soon after all the hardships caused by demonetisation.
It is quite likely that the levies will be watered down or even withdrawn, at least by the public sector banks, with reports that the government has asked the leader of the pack, the State Bank of India, to reconsider the move. But the proposals themselves, the way they have been presented and the justification offered for these fees by the bank CEOs give some interesting insights into the alternate universe in which the sector leaders appear to live and operate.
The words, the terminology, the explanations and the language in general reflect the inner contempt with which ordinary depositors are held by the banking world.
One of the reasons proffered for levying charges to discourage customers from interfacing with banks and their teller machines is the simple one that banks are not charities and that they must seek a return for their shareholders and recover their costs, forgetting the elementary fact that the money being so described here is not the banks’ money at all.
There is also a presumption that bears no understanding to not only of the mass of rural India but also urban pockets where many depositors prefer to withdraw small amounts as and when they need it and often worry, quite correctly, that any larger sum in the pocket gets spent.
This is also the reason why micro recharges on mobiles are quite popular – a whole range of people who are critical to the economy fill in their accounts bit by bit rather than at one go. This should be plain to anyone who walks around the market and is willing to see how ordinary Indians live. Charging penalties to these customers and all those who keep small sums in their deposit accounts signals a banking sector that is disconnected from the reality of real India.
Post liberalisation, the share of voice of banks in the media has increased and can be seen at work every time there is an almost concerted demand for lowering of interest rates, supported often by industry. Simultaneously, the voice of depositors has weakened. This tilting of the balance signals a deeper malaise which if not checked in time will lead to the trampling of the rights of individuals who cannot stand up to the might of the banking system. Let us not forget that the banking sector exists because of the loyalty of the depositor and not that of the borrower.