The Securities and Exchange Board of India (Sebi) is now giving personal hearings to all entities indicted by its IPO Scam order. Several of these, especially Depository Participants (DPs), are hoping to plead with the regulator for leniency. Meanwhile, their investors are beginning to panic, since the time allocated for transferring their DP accounts away from these indicted entities is running out. Several angry investors are writing to ask why they are being penalised along with the DPs. Although investors are happy at Sebi’s clean up action, they are irritated at the hurdles in transferring accounts. They are upset at having to pay fresh account opening charges for every new demat account—this is clearly unfair. Secondly, DPs are vary about acquiring customers from indicted DPs and hence ask more questions. Thirdly, the transfer process is often tricky. For instance, R. Narayan, holds a joint DP account with his 78-year-old mother for several years. He is now being asked to produce a PAN card for his mother. If he decides to obtain a PAN for her, the process will take a lot more than the 15 days provided by Sebi. Another says his daughter is away on a holiday and not scheduled to come back for another month. Sunil Singh of Rourkela is worried that DP account may be frozen if he is unable to transfer it in the next few days. The regulator is aware of these hardships, but has yet to come up with an appropriate solution or even provide more time for the transfer of DP accounts. Ironically, only Karvy’s clients are calm due to the temporary stay granted by the Andhra Pradesh High Court.
A year ago, Indian Airlines seemed determined to match its private sector competition in terms of service quality, but it seems to have given up the race after half its name was sliced off. Regular passengers notice that several flights are either dropped or merged. We reliably learn that anywhere from 9 to 13 (the higher figure comes from crew members) aircraft are grounded for want of spare parts. The airline has also suffered a series of unfortunate bird hits that have put them out of commission. Can anyone but a public sector airline have so many planes on the ground? The flight crew is also demoralised because they derive a big chunk of their income through in-flight allowances but are being made to sit at home. Why is the inappropriately named Indian sliding back to its old public sector ways? Sources say that the new policy owes to strict adherence to ‘‘rules’’ and centralisation of decision-making in the hands of the chairman. This, they say, has slowed down decision-making and is affecting service quality.
Several bank depositors have been complaining about a new racket—the disappearance of cheques dropped into the ‘drop boxes’ installed by banks at their ATM centres, bank branches and other places. In the last week alone, several unconnected individuals have complained about discovering vanished cheques. Each of them complained about a different bank. While one was told that his credit card payment was not received, another IT professional discovered that his cheque had not been credited for 22 days only when one of his payments was bounced by his bank. The first two cases pertain to a foreign bank and an Indian private bank while a third disappearance is reported from a large nationalised bank. In each case, the banks refuse to accept any responsibility since there is no proof that a cheque was actually dropped in the drop box. So banks simply advise customers to stop payment on the cheques and issue new ones. Victims of vanished cheques are naturally furious. They believe that outsourced collection agents are responsible for the mischief. But don’t banks need to maintain at least a register of cheques collected from such drop-boxes? If not, their faith in their outsourcing firms is only at the cost of hapless customers. Interestingly, banks themselves make it difficult for customers to obtain proof. Scores of bank ATMs never have deposit-envelopes and the security guard usually advises customers to use the drop box. Some banks have even refused an old-fashioned branch deposit.
The number of complaints about banking services is obviously racing ahead of the regulator’s capacity to deal with them. But the brunt of this is felt by the Banking Ombudsman’s office. A reader who tried to complain to the Ombudsman said: ‘‘I was told that I must appreciate their plight as they have a staff of only three/four persons to thousands of complaints and it make take years before problems are attended to’’. Clearly, the RBI needs to put in place systemic changes and stiff penalties to make banks more accountable to their customers.