Dhan ki baat #2 – Banker at the gates

Welcome to the second edition of Dhan Ki Baat. In the previous edition, I had written about ‘making money even when you are sleeping’.

It is a very tantalising idea and in times to come, we will explore it further.

In this second edition, I want to cover the other side and that is – ‘losing money even when you are sleeping‘.

Sounds scary. It actually is. Protecting your money from undue influence is equally important.

There are several entities out there to rob you of your money in a very sophisticated, legal way.

You deal with them on a day to day basis and in some cases trust them blindly.

The one at the forefront of this robbing act is your bank. Once you enter in bank’s official records, it is hard to come out and it is even harder to resist their advances.

It reminds of the famous Eagles song – Hotel California.

The famous line from the song –  “You can check-in any time of the year, but you can never leave.”

The song is one of my favourites but for different reasons.

Now, let me recount a brief story to you.  

My father recently opened a savings account with HDFC Bank. He had some issues with his current bank, ICICI, where he couldn’t receive a payment due to a discrepancy in the way his middle name was written.

So, HDFC Bank opened an account for him. He gave my email id for the records since he doesn’t have his own.

I started to receive a string of emails including the standard welcome, net banking setup, ATM card, etc. etc.

I just glanced at them and closed. Standard fare, needed no further action.

After a few days, I received an email about opening a new Fixed Deposit in my father’s name. I wondered what made him do that. But fine! I let it pass.

Soon after, I received another email, this time about a Recurring Deposit.

My antennas were up. I was now sure that some hard selling by the bank was at work.

I called up my father and asked what was he upto. He mentioned that the manager at the bank told him to open the two deposits and so he did.

Nothing wrong with that too. But he didn’t need a RD since he has no fixed cash inflow such as salary or pension. All he knew was that he could withdraw his money anytime.

A few days later, there was yet another email. The subject line: Dear ABC, Welcome to HDFC Bank Classic Banking Programme.

Wow, he has been enrolled in a “Classic Banking Programme”.

What so special about it? Not mentioned. No idea.

The email further stated:

We would also like to inform you that per quarter, a nominal Programme Management fee of Rs.100+ service taxes is applicable per customer ID, on the Classic Banking Programme for Savings and Current Account holders, effective Jan’16 post 1 year of completion into the programme.

(If you can understand the above sentence clearly, let me know too. )

It’s so confusing. I don’t understand if the charges are retrospective or take effect after 1 year of enrolment. Does the count for 1 year start from Jan 2016? Or, is it free for the first 12 months and then the charges are applicable.

Anyways, as per the email, he is enrolled. The message further stated that if he doesn’t want to participate in the programme, he should opt out by clicking the link as provided.

I checked with him again. He doesn’t remember enrolling in any such programme. So, this seemed fishy.

I wonder why would I be enrolled by default in something that requires me to pay. Any such service should need my explicit permission to sign up and not sign out.

Is RBI listening?  

Well, not knowing when the charges start, I erred on the side of caution and opted him out immediately.

I am sure he is not a lone case. Millions of unsuspecting customers are made to pay such charges without even their knowledge. A 100 bucks here or there probably don’t matter to people and it goes on unquestioned.

In the process, the bank makes a killing becoming the most valued company in the country. You now know how.

What is the relationship between your banker and your money?

I guess it is that of the victim and the victimiser.

They have only job – to use every trick in the book to part money from your account into their account.

They will sell your FDs, RDs, ULIPs, MFs – not because it serves your need, but because it serves theirs – the targets and the hefty commissions.

I have witnessed hundreds of investment portfolios which were created with bankers’ advice and they are are a testimony to the ‘greed running amok’.

My suggestion to you is beware of your banker. They will try to approach you with various fancy names but they are all the same.

S/he could be the Imperia Account Manager, Personal relationship manager, AVP – HNI Clients, blah, blah, blah.

• Take everything your banker says with not just a pinch of salt, but with a kilo of salt.
• Your first reaction to everything your banker tries to sell you should be a big NO.
• Don’t ever buy any investment product from your banker.

A couple of decades ago, a book was written with the title – Barbarian at the Gates. In today’s times, we can safely rephrase it to – Banker at your Gates.  

Will some volunteer to write the book too?

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What’s your banker doing for you? Send me an email or write into the comments.

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