Systemic inadequacies or incompetence on the part of the bank can lead to financial loss and hardships for customers. Here’s how to deal with four common problems.
I. Blocking Of Credit Card
If you have never swiped your card for, say, over Rs 5,000 in a month and suddenly spike your spending to Rs 15,000, your card issuer may block your card. Says an executive with Citibank: “We monitor our customers’ spending patterns and if we spot anything out of the usual, we block further transactions as a precaution against fraud.”
But imagine the complications this ‘complimentary’ riskmanagement strategy can lead to if you are out of the country with little or no cash at your disposal. If you are not carrying a mobile phone registered for SMS alerts, the first you’d know about your blocked card would be when a card transaction is declined.
The solution, according to banks, is to inform them if you think you are likely to swipe more often than normal. This way you can also request a one-time enhanced limit.
II. Ignorance About Account Types
Contrary to public perception, bank branches may be ignorant about their own products or services. Take the Resident Foreign Currency (RFC domestic) account. Some leading public sector banks do not offer this facility, claiming that it does not exist or is only available at their head branches.
Says Mita Choudhry, a 24-year-old, who recently returned to India to work for a telecom service provider in Delhi: “I knew that I could retain my foreign earnings in an RFC account without converting it, but some banks tried hard to convince me to open a rupeedenominated account. If I had done so I would have lost a huge amount, given the exchange rate in January when I returned.”
One way out is to conduct your own research and, if in doubt, go to the head branches. Better still, opt for a private sector branch where you are unlikely to encounter this problem. The branches in non-key areas are, by and large, best for basic banking facilities.
III. Blaming It On Technology
What is your first reaction when you try to swipe your debit card only to be told that there isn’t enough balance? Assuming that you have kept track of your finances and know you have sufficient funds, you will probably panic, fearing identity theft. You might then ask your bank to freeze your account, affecting a stop payment on any outstanding transaction.
This would mean a fee for every transaction blocked, in addition to any applicable late payment penalties. It does not help if, after facing the inconvenience, you are told that a ‘technical error’ was to blame for the chaos. This has been known to happen. Says a Syndicate Bank branch official: “Sometimes, due to technical glitches, your debit card may not work. Instead of immediately blocking your card, visit the nearest ATM and check your balance for better accuracy.”
IV. Cheque Forgery And Liability
Banks are supposed to check the genuineness of signatures before encashing a cheque, preferably using modern devices like ultraviolet rays. However, in case of a forged signature, banks often try to make the victim share the liability, citing negligence in safeguarding the cheque book. At other times, they try to make the most of customer ignorance by offering to pay only a certain percentage of the disputed amount.
However, according to a banking ombudsman, “Banks are liable to cover the entire amount. The only question is whether the case merits payment of the interest amount too.” If the forged cheque results in penalties like late payment or nonmaintenance of the stipulated minimum balance in the account, the bank has to compensate this amount to the customer as well.
Also, according to the Supreme Court rulings in such cases, banks cannot escape this liability by citing the account holder’s failure to report stolen cheques at his branch.
