Banks as
'Business entities'
Sir,
Apropos Mr J M
Behl's letter published on 27.3.2002 I wish to
offer pointwise clarifications as given below in
my personal capacity-
Fistly, I would
like to thank Mr Behl for appreciating PNB's
gesture in keeping Rs 500/- as minimum stipulated
balance in saving accounts. For rules regarding
dishonouring of cheques I would like to quote Mr
P N Varshney an authority on banking laws and
practice in India.''
''The banker is
under an obligation to make payment of his
customer's cheques so long as he posseses
sufficient funds to the credit of the latter.
Failure to do so without sufficient reasons make
him liable under section 31 (of the negotiable
Instruments Act, 1881) to compensate the drawer
(of the cheque) for any loss or damage caused by
such default.. The minimum balance required to be
maintained in a current account or savings
accounts is deemed as available for honouring the
cheques. That amount should not be regarded as
frozen by the Banker. If the minimum balance is
reduced below the prescribed amount, the banker
should honour the cheque and may charge an
incidental charge from the customer for this
default.'' Keeping this in view, we at PNB do not
dishnour customer's cheques even if the resultant
balance falls below the minimum stipulated limit.
The people in SBI must be having some basis for
dishonouring the cheques or laying of incidential
charges on pension accounts which they can better
explain.
Secondly, Mr Behl
seems to be under the impression that the public
sector banks are minting enormous
benefits/profits from their urban operations. But
I would like to inform Mr Behl that due to the
obligations of social banking , PSBs are burdened
with a significant number of financially unviable
branches in rural and semi urban areas which are
not allowed to be closed down in RBI. For
example, PNB has a Branch in Chowalgam area of
Kashmir valley having a deposit base of Rs 12
lacs. Mr Behl can well imagine the heavy profit
generated by such branches.
Also in present
era of privatisation, every responsible Indian
citizen should accept the fact that more sooner
than later, an acceptable relationship has to be
developed between the cost of providing service
to the customers of any organisation and price
charged for the same. At a time, when PSBs are
expected to compete with new generation private
and foreign banks in the fields of customer
service, profitability, technology adaptation and
employee productivity, they should also be
provided with a level playing field by allowing
them the choice of staff, choice of technology,
choice of location and the most important of all,
the choice of Customer at par with the private
and foreign banks. To remain economically viable
and fundamentally strong commercial banks in
India will have to be treated as 'Business
Entities' and not as distributing arms of social
welfare departments of State and Central Govts Mr
Behl cannot expect to get free of cost facilities
like 'anywhere banking' 'tele banking' or 'net
banking' etc. by maintaining a balance of Rs
200/- in saving fund account. To conclude, there
is a famous proverb in Arab counries ''You cannot
buy a camel for the price of a goat''.
Yours etc...
Rajesh Gupta
PNB Officer
10/5 Trikuta Nagar,
Jammu.
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