Mumbai: The change of guard at the Reserve Bank of India with Urjit Patel’s appointment, after the present governor Raghuram Rajan demits office, is unlikely to be beneficial to the bank depositors say organisations that take up complaints of depositors.
Debashish Basu of MoneyLife which is very active on the depositors’ front says “consumers are low priority area for the RBI which goes in more for intellectual gymnastics.”
Even the Deposit Insurance Guarantee Corporation (DIGC), a subsidiary of the RBI, is not of help to depositors, said Vishwas Utagi, who has formed an association for cooperative banks depositors of Maharashtra.
The DIGC collects a premium from the banks but though several banks, he alleges, do not pay this premium no action is taken. Two of the biggest cooperative banks in Maharashtra are in trouble presently and one of them is under the RBI administrator.
If the banks, says Mr Utagi, go into liquidation depositors are hardly likely to get the Rs 1 lakh mandated for them. This DIGC came into being after the Harshad Mehta scam.
The weak private banks that were in trouble were taken over by stronger banks but the cooperative banks are still languishing since then and depositors have been left in the lurch.
In Maharashtra around 150 banks are under liquidation and pan India the figure could be 450 said Mr Utagi. The banking system, says Mr Basu is not designed to make the life of the average man-on-the-street better. If Mr Patel wants to change this situation he will have to “revamp the grievances redressal system which at present is cumbersome and torturous.”
There is a master circular for banks which talks of cleanliness, water coolers and micro management in general. But the real problem is more complex. If a depositor has a complaint he has to first go to his branch, then to the head office if not satisfied and perhaps the bank at the board looks into it, if further action is to be taken.
Only if all this fails the complainant can then approach the ombudsman which is yet another cumbersome process as there is no time limit by when the problem has to be resolved.
“The whole system is designed to protect the bankers,” says Mr Basu. There are 15 ombudsman mostly in state capitals and they are non-existent in small towns.