Friday, August 19, 2016

Security Risks today

What is wrong with our Banks?

A few days ago our TV channels suddenly cut off from political turmoil in Kerala and flashed up a fraud in Bank ATM. The whole city was preplexed as the Police could not crack the case initially. After some days another news comes around that a robbery attempt was made ina Bank where the robber tried to get away with a computer hard disk instead of any money.
Then another fraud was unearthed in the same branch when a employee canvassed a customer for investing in mutual funds. The customer agreed for a huge amount and in the end the employee got away with the money.   It is a common recurrence now, as the fraudsters have realized there is a gaping hole in our security systems. As a result fraudsters get away with easy money as the common man see their life saving getting washed off in a jiffy.  

Now is there a serious study for analysing the reasons of increase in frauds. Or are we looking into quick fix solutions?

  Compromise of security in favour of numbers: Sometime ago the Government launched it's flagship programme of cheap bank account for the common man. There was also a freebie of accidental insurance that came along with the plan. Soon the pressure came in Finance ministry to mop up maximum numbers. The bank officials had no option but to throw up caution in wind to rake in maximum accounts. Now this model of running a business has precolated down venomously and engulfed every form of Banking. The huge asking numbers force the officials to compromise security unintentionally.    

Unscientific implementation of Technology: We Indians are so bad in innovating things. We still find it blissful to talk about inventing zeroes and nothing significant afterwards. The Banks in India were not at all into implementation of Core Banking Solutions and then one fine morning decided to adopt technology. The bank heads were very good in credit, forex, interest rates etc. But they weren't very good at technology. This resulted into huge wastage of money and in some cases Banks were nearly grounded into closure.  

Unprincipled outsourcing: We are really good in implementing western ideas of management, but in a rather brash way. One such killer idea was outsourcing. Outsourcing is a concept, which in its essence is good. But implementation without studying risks involved can turn the whole concept that can destroy your organization. If we take the case of ATMs as an example, the whole operation has been outsourced for the purpose of better utilization of resources. Now the idea of outsourcing is good. But then opening more units than you can manage, without any proper mechanism to monitor can in turn lead into an avalanche of problems.

Another perfect example is when the governor of RBI commented that IT solution couldn't actually cut the cost for Banks. Now this is true when you look into SLAs the Banks entered into with IT companies. Even a  small change is charged heavily and major IT operations are supported by frsh hands from college. In the race to cut costs the security became the convenient sacrificial lamb.  

A serious risk no one is bothering to look into is Bank merger. Now creating a monster Bank is a great idea. But as the size of monster increease, so does its weaknesses and potential risks. Have the Bank bosses set up necessary mechanism to counter the risk?  

Tuesday, August 2, 2016

Give us our Money

Just the last week I filed my first application for Right to Information.

Well, for the blissfully unaware, Right to Information is an act enacted by the GoI making it a right for the citizens to get information from public sector organizations.

I have been active for sometime on online forums, what you may call ’ online activism’. I have been ridiculed too by many for this ‘impotent activism’. But I find myself more aware of my environment. And unless you are aware of your surroundings you may never find a need to react.

Now, for a while, I have been thinking about taking the activism a step ahead. And that day the lightning struck.

I was out in the city market, for the festival day shopping. Palayam is one of the crowded places in the city and there  is ATM run by the State Bank right in the center of it. Even though I have been there many times, I have only been able to get cash out of this ATM  It was not different this day as well. And I had to stand a drizzle to walk half a kilometer for the next ATM. Now walking 500m in a drizzle is not a problem for me. But the amazing amount banks pay to the private vendors to maintain this ATM is a problem.
The Banks pay a hefty amount every year to these private agencies in the name of ‘outsourcing’.

Now this magical word has brought in ‘cost effectiveness’, ‘better resource management’ and ton load goodies from the corporate lexicon. But on ground we see none of these.What happens is the Public Sector Banks dole out the money, from common man’s pocket and provide him services that doesn’t function. 
The irony doesn’t end there. There are provisions in the agreement to invoke penalties for non functioning. The banks are due in the tune of crores from these vendors.But the penalty is never invoked. Next time when your loan is due, try not paying and you can see if the bankers spare you!

Thursday, August 28, 2014

Jan Dhan Yojana

Our beloved PM sr has realized that many of us Indians are unbanked. no one in the country knew about the deadly fact. being unbanked is much worse than being underpoverty line.

so he announces in the majestic red fort during the Independence day that he is launching a programme to 'bank' India. An overdraft and insurance is the prize money. He then shoots off a mail to every bank employee in the country to 'shoulder' the responsibility and rise to the occassion. PM sir's letter is read in every office and the bank employee signs the letter stating he has read the contents

But the banker is given no choice but to ' rise to the occasion'. PM sir had also sent every banker a white cap. Wearing the white cap every employee from the top to bottom explore the streets looking for any 'un-banked' man. No one seems to be interested, so banked people are banked again by pretending they are unbanked. Photographs are sent to PM sir. I visit my DGM sir in his air conditioned room, he signals me to be silent. A television is broadcasting LIVE the PM sir's flagship programme. Apparently every office has to broadcast the programme live

PM sir has brilliantly used the state machinery to drive the programme. He knew very well the protest comes only when there is an option for the chooser. Better ignore the parallels with a man who lived around Germany some 70 years ago. Meanwhile I hope someone called Finance Minister is still alive

Monday, August 18, 2014


Today had a chance to talk to few branch managers. The conversation veered to some LIFE INSURANCE policies. After the meltdown the insurance people abandoned the ULIP products all together and came with SAFER products.

The plus point is the benefits only kicks in after 60 yrs of age. By the time you will be too bored to chase the scoundrels. Don't misunderstand me, insurance sellers don't lie. But they won't tell the whole truth. The naked truth is there is high chances of you turning penniless

The insurance selling would've been better if left t sellers. But the bosses have come up with a great idea of using the branch infrastructure to sell their wares. The idiot buyers think it's product of the bank bu it's not.

With central government increasing FDI in insurance sector, pressure will go worse to sell. I have known many big time officials who does absolutely nothing but sell insurance. They go untouched and live a happy life, when the others toil.

The same people who says insurance is a tricky product are themselves the top sellers. But then it's another matter to discuss'
Even then it's not the sellers who gets away wth the commission, there are like men of immense wealth who earns in billins as funds flow into his stocks

Thursday, July 24, 2014

Going up

After a period of prolonged tussle with various employee unions and some unpopular decisions, the departure of the Chairman was a huge reliefe to an organisation with lakhs of employees spread all over the country

The new chairman came in with a whiff of fresh ideas and some populist measures. Now she has come up with a training program spread from July to  fag end of October. The idea of training every employee all through the country is not simple.

I attended the mandatory program last week. The seesions were not very boring, but everything to the point with group activities and videos.

90% of the session was on dealing with customers. How to talk politely to them etc.
There was also couple of sessions on reduction of waste , teamwork etc.

I strongly believe in reduction of waste. But to think that customer dissatisfaction is root of every malady in the organisation sounds strange to me.
But assurance from the Chairman that employee would be taken care of, sounded soothing

One other aspect I couldn't quite digest was the need to endorse government and impending prosperity. This was repeated atleast thrice

Sunday, July 20, 2014

Dance with the devil

Today was reading a news release where Canara Bank expressed it's willingness to sanction more loans to metro projects' i seems a in-principle approval was made in just three weeks. The interest rate is 10.8 floating with a repayment of 20 years and moratorium of 7 years

Sounds so interesting that the bank has chipped in towards infrastructure development of the nation. But looking at it, credit is running to a total of 7000 crore pls and the project has been shooting the deadlines. 7 years moratorium with a floating rate can ensure that total liability may reach astronomical figures, coupled with the fact that Metro projects in India hasn't been a resounding success yet  in terms of profit generation.

May be at this movement the bank officials might be clebrating the success of their achievement. U what if 10 years down the line they end up with a still born in the hands

Friday, July 4, 2014

Thailand Training

No matter how much you abhor it, once you're in the industry, you start liking it to the point where you can't live without it. Bank sucks you in and slowly changes the very core.
The last few years have taught me to be ruthless, shrewd and selfish

I believe everyone around me are. May be they don't realize it anymore

June July months is the period you start flying out for 'training sessions'. You needn't be a big shot for that. I will tell you how

If you ask someone working in a bank if he sell insurance. You  can expect a lecture on how he dropped the business years ago. And how it's for cheating gullible customers
But come December and with  a strange fervour everyone runs around to get 'business'. If you think it's for the national good or to earn profits for the bank, you're sorely mistaken
The strategy this year was to seduce the customer into some pension plan by investing a small amount. The poor guy in the fear of turning penniless at old age puts his money in

After two months the agents stand with a puffed chest, when th results are announced. In another two months he flies to Thailand or Singapore for a 'training session'. I don't understand why it's deemed as training'. May be o outsmart the IT
After the tour the agents announce that they have divorced insurance selling..... to wait for next December

Note to customers: All these training trips is financed from your premium. Most of the star plans a few years ago have bit dust. Keep this in mind when your agent return from his 'training'