Rajagopal Ramachandran (not his real name), a retired central government employee, receives a monthly pension of Rs 10,000. He holds his pension account with a leading private sector bank but is unhappy with the service it offers.
"The pension which should reach my account by the end of the month is often delayed up to a week," says an agitated Ramachandran.
Retired state government employee Vinod Bhattacharya (name changed) suffers a similar plight. "My bank is harassing me," says 65-year-old Bhattacharya.
His afternoon siestas are often interrupted by unsolicited phone calls some tele-marketing executive of his bank, hard-selling financial products.
Ramachandran and Bhattacharya are few among the growing list of irate customers. The Reserve Bank of India is taking serious note of these complaints.
It proposes to call the private banks involved in government businesses to take stock and explain the requirements of this business.
ICICI Bank, HDFC Bank, UTI Bank and IDBI Bank are involved in the government business of collecting taxes and disbursing pensions for the government employees.
The Reserve Bank of India authorised the four private sector banks to enter government business -- a year back. Government business involves collection of taxes -- income tax, sales tax, professional tax, central tax, excise tax and service tax -- and disbursement of pensions.
The total government business cake is over Rs 10 lakh crore (Rs 1 million) and public sector banks have the lion's share of this, said a private bank official.
Till recently, it was a monopoly of state-run banks.
Sources revealed that while the banks are very active in collecting taxes and receiving subscriptions to the RBI's Relief Bonds, they are not so prompt in handling the pensioners.
Delays in disbursements of pension have angered the senior citizens who depend on this money for livelihood. Collection of taxes and selling government debt instruments are well taken care of as banks earn commission on these businesses.
The banks earn a "turnover commission" of Rs 1.18 paise per Rs 1,000 on both payment and collection business.
Banks leverage on the customer information they have and cross-sell other services to customers.
"We would like to get more pension accounts as this a permanent source of funds as not all pensioners withdraw the entire amount," said an institutional business head from a private sector bank.
Most of the banks refute allegations of delay in disbursement of pension. "We are servicing our pension accounts efficiently," said a senior private sector bank official.
There could be stray instances of delay in tier II and III towns, he added. However, they do admit the "harassment" part as the over-enthusiastic tele-marketing executives are difficult to be reined in.
When it comes to selling financial products, they don't discriminated between old and young customers.
