A private citizen changed a banking law in 90 days!

Early this year, when 69-year-old Mr. J. P. Vaghani, a Mumbai businessman, wanted to file a cheque bouncing case, he learnt that, according to a new rule (as per a Supreme Court order in 2014), a case under Section 138 of the Negotiable Instruments Act must be initiated at the place where the branch of the bank on which the cheque was drawn is located. This meant that Mr. Vaghani could not file the case at Borivali, where he had deposited the cheque. He would have to file a case in Kurla, the location of the bank from where the cheque was dishonoured. This meant he would have to travel from Borivali to Kurla and back, totally over 50 kilometers, for every hearing!

Mr. Vaghani decided to do something about this and, if possible, get the Supreme Court verdict reversed.

On March 15, 2015, he wrote to the Law Minister of India, referring to last year’s judgement, which was “tantamount to harassment of the complainants and benefited the accused who issued the dishonoured cheques.”

“In such circumstances, if business takes place between Mumbai and Delhi and a Mumbai trader delivers material at Delhi and receives a cheque in Delhi which gets dishonoured, then as per recent judgment, the Mumbai trader has to run to Delhi to file a case at the drawee bank’s jurisdiction for recovery and again as per the court, dates arise at his own cost leaving all his business at Mumbai,” Mr. Vaghani’s letter stated.

On April 22, the Union Cabinet, at a meeting chaired by Prime Minister Narendra Modi, cleared the amendment to the Act clarifying the jurisdictional issues for trying dud cheque cases.

On June 10, the Union Cabinet decided to promulgate an Ordinance to the effect that “the offence of rejection/return of cheque under Section 138 of Negotiable Instruments Act will be enquired into and tried only by a Court within whose local jurisdiction the bank branch of the payee, where the payee presents the cheque for payment, is situated.”

The Ordinance was signed and promulgated by President Pranab Mukherjee on June 15 – proving a huge victory for Mr. Vaghani’s efforts.

Of course, the ordinance would have to be approved by both houses of parliament within six months of being promulgated.

A banking law was amended in 90 days just because a private citizen “decided to do something about this”!!

For complete details, please read this Economic Times report.

Are all customers equal? Or are some customers more equal than others?

A couple of days back, I visited the local branch of a bank to get a Demand Draft. When I reached the counter, the officer greeted me with a smile and put out his hand to collect my DD Application, coolly ignoring three customers who were already waiting there. I returned the smile and the greeting, but did not hand over my DD Application. Instead, I gestured to him to first attend to the other customers. After he had collected their DD Applications, I handed over mine to him and sat on a chair in the waiting area. Instead of processing the DD Applications in the sequence in which he had received them, he processed my DD Application first and handed it to the clerk sitting next to him with an audible instruction to print my DD immediately. I received my DD within 3 minutes of handing over the application! (The norm is 10 minutes.)

This was my first encounter with this particular officer since he had only recently been transferred to this branch. Then, why had he given me preferential treatment even though I had clearly shown that I didn’t want it? The answer is simple. On the basis of appearance and attire, he had decided that I am a ‘privileged’ customer, while the other three were ‘non-privileged’ customers!

In most banks and offices, I have seen that all customers are NOT treated equally. ‘Privileged’ customers are generally treated well, while ‘non-privileged’ customers generally have to put up with curt behaviour.

Customers are classified as ‘privileged’ or ‘non-privileged’ on the basis of economic status, political ‘connections’, skin colour, religion, caste, educational background, profession, etc..

Even when there are machine-operated systems, the bank/office personnel manage to give ‘privileged’ customers preferential treatment. For example, many banks have a token system for cash transactions or for updating Pass Books. Tokens are issued by a machine, and customers are attended to strictly as per their token numbers. However, the treatment given to each customer generally (not always) varies. Most of the time, care is taken to ensure that ‘privileged’ customers are issued only new notes or notes that are in good condition, while ‘non-privileged’ customers generally get the older notes. Pass Books of ‘privileged’ customers are updated immediately, while ‘non-privileged’ customers are often asked to wait or to collect their updated Pass Books the next day.

What is the solution? In his book ‘A Better India: A Better World’, N. R. Narayana Murthy states:
“Technology is a great leveller. It does not distinguish between the rich and the poor. For, example, one of my younger colleagues who is a janitor at Infosys is happy to use an ATM because it does not discriminate against him – unlike the clerk at the manned bank counter.”

I have myself seen how ATMs do not discriminate against customers on any basis. The last time I visited the ATM near my house, one person came out after using the ATM and another who had been waiting went in to use the ATM. I waited for my turn. The first person was the young man who delivers milk to all the residents of our apartment complex. The second was a woman who works as a billing clerk at the local supermarket. The three of us received service in the sequence that we had reached the ATM. The ATM treated all three of us equally.

Introduction of technology will definitely help in reducing the inequalities in our society. Till some years back, a telephone at home was a luxury that could be enjoyed by very few people. Today, almost everybody has a mobile phone. There are many such examples.

However, will all this really change our ‘mindset’? Will it lead to a truly egalitarian society?

What do you think?

(This post was originally published on Nov 09, 2013.)

Axis Bank pays Dipika Pallikal compensation of Rs. 500,000 for deficiency in service!

My blog post on September 03, 2013, Is this how a bank should treat a customer? was about squash player Dipika Pallikal having sued Axis Bank Limited seeking Rs. 10 lakhs as compensation for the humiliation and loss of reputation she suffered during one of her overseas trips in 2011 after her debit card declined a transaction despite sufficient balance in her account.

My blog post on September 19, 2013 Axis Bank apologises was about Axis Bank’s apology for their remarks that “The very fact that the complainant is not able to take the slightest disturbance would prove that she lacks the requisite mental toughness of a world champion. She is only making excuses for her non-performance …” The Times of India reported this in detail on September 12, 2013, also stating that “Dipika still intends to pursue a case of ‘deficiency in service’ against the bank ‘on principle.’”

Since then, I had been regularly checking newspapers and internet for updates about the case in the Chennai (South) District Consumer Redressal Forum. For over a year, I did not get any updates. On Saturday last, my Google search led me to an NDTV report dated March 24, 2014 stating that “the consumer court ordered the bank to pay a compensation of Rs. 500,000 to Pallikal as well as Rs. 5,000 towards costs.”

After reading this report, I sent a message to Dipika Pallikal’s lawyer, Sanjay Pinto, to ask whether Axis Bank paid the compensation, or whether they have appealed against the verdict.

Mr. Pinto replied, “The bank paid the compensation ordered by the court. As the matter stands resolved, we do not wish to make any comment.”

I hope this entire episode encourages every consumer in India to fight for her/his rights.

I also hope that every service provider and product supplier realizes that a genuine attempt to resolve a customer’s grievance can save them considerable expense and bad publicity.

Are all customers equal? Or are some customers more equal than others?

A couple of days back, I visited the local branch of a bank to get a Demand Draft. When I reached the counter, the officer greeted me with a smile and put out his hand to collect my DD Application, coolly ignoring three customers who were already waiting there. I returned the smile and the greeting, but did not hand over my DD Application. Instead, I gestured to him to first attend to the other customers. After he had collected their DD Applications, I handed over mine to him and sat on a chair in the waiting area. Instead of processing the DD Applications in the sequence in which he had received them, he processed my DD Application first and handed it to the clerk sitting next to him with an audible instruction to print my DD immediately. I received my DD within 3 minutes of handing over the application! (The norm is 10 minutes.)

This was my first encounter with this particular officer since he had only recently been transferred to this branch. Then, why had he given me preferential treatment even though I had clearly shown that I didn’t want it? The answer is simple. On the basis of appearance and attire, he had decided that I am a ‘privileged’ customer, while the other three were ‘non-privileged’ customers!

In most banks and offices, I have seen that all customers are NOT treated equally. ‘Privileged’ customers are generally treated well, while ‘non-privileged’ customers generally have to put up with curt behaviour.

Customers are classified as ‘privileged’ or ‘non-privileged’ on the basis of economic status, political ‘connections’, skin colour, religion, caste, educational background, profession, etc..

Even when there are machine-operated systems, the bank/office personnel manage to give ‘privileged’ customers preferential treatment. For example, many banks have a token system for cash transactions or for updating Pass Books. Tokens are issued by a machine, and customers are attended to strictly as per their token numbers. However, the treatment given to each customer generally (not always) varies. Most of the time, care is taken to ensure that ‘privileged’ customers are issued only new notes or notes that are in good condition, while ‘non-privileged’ customers generally get the older notes. Pass Books of ‘privileged’ customers are updated immediately, while ‘non-privileged’ customers are often asked to wait or to collect their updated Pass Books the next day.

What is the solution? In his book ‘A Better India: A Better World’, N. R. Narayana Murthy states:
“Technology is a great leveller. It does not distinguish between the rich and the poor. For, example, one of my younger colleagues who is a janitor at Infosys is happy to use an ATM because it does not discriminate against him – unlike the clerk at the manned bank counter.”

I have myself seen how ATMs do not discriminate against customers on any basis. The last time I visited the ATM near my house, one person came out after using the ATM and another who had been waiting went in to use the ATM. I waited for my turn. The first person was the young man who delivers milk to all the residents of our apartment complex. The second was a woman who works as a billing clerk at the local supermarket. The three of us received service in the sequence that we had reached the ATM. The ATM treated all three of us equally.

Introduction of technology will definitely help in reducing the inequalities in our society. Till some years back, a telephone at home was a luxury that could be enjoyed by very few people. Today, almost everybody has a mobile phone. There are many such examples.

However, will all this really change our ‘mindset’? Will it lead to a truly egalitarian society?

What do you think?

Axis Bank apologises

After publishing my post ‘Is this how a bank should treat a customer?’ on September 03, 2013, I felt that just publishing a post on the matter was not enough. I thought I must write a letter to Axis Bank Limited, expressing my views on the subject. No, I did not think that my letter would instantaneously resolve the issue, but I hoped that, if Axis Bank Limited did not act on the basis of the media reports, my letter, along with similar communications sent to them by others would motivate them to do the right thing. The worst thing that could happen was Axis Bank Limited would trash my letter or they would send me a letter asking me to mind my own business.

Hence, the next day, I sent a letter to Axis Bank Limited, for the attention of Ms. Shikha Sharma, MD & CEO. Click below to read the text of the letter.

Letter to Axis Bank

On September 05, 2013, Axis Bank’s President (Retail) Rajiv Anand tweeted:
“On behalf of @AxisBank,I spoke to @DipikaPallikal’s mother to apologize for our remarks.We have the highest regard for Dipika’s achievements”

The Times of India reported this in detail on September 12, 2013, also stating that “Dipika still intends to pursue a case of ‘deficiency in service’ against the bank ‘on principle.’”

Yesterday, I was pleasantly surprised to receive a letter from Rajiv Anand. Click below to read the letter.

Letter from Axis Bank

I am under no illusion that my letter had any role to play in making Axis Bank Limited apologise. My letter probably reached them after they had apologised. That does not mean I will not send similar letters or emails under similar circumstances in future.

We must appreciate the fact that Axis Bank Limited apologised for the negative remark made by them against a customer. Large business organisations rarely apologise to an individual customer. On most occasions, they stubbornly refuse to acknowledge their mistakes.

I appreciate the fact that a senior executive of Axis Bank Limited sent a letter in reply to a letter from a person who is not even a customer! I have seen how many organisations ignore their customers just because they think they can get away with it.

Individuals and organisations can and will make mistakes. After all, all individuals are human, and all organisations consist of these humans. What matters is how an individuals and organisations respond when their mistakes are brought to their notice. In this particular case, Axis Bank Limited has responded well!

I do not know exactly how the events unfolded in this dispute, but from whatever I’ve read in media reports, there would probably have been no court case if Axis Bank Limited had shown the same positive attitude when the matter was first brought to their notice. To quote Ms. Susan Pallikal: “The official was most inconsiderate and unhelpful and kept trying to pass the buck instead of offering any solution.”