Banks in India regularly send their customers e-mail messages about phishing and vishing scams--how not to reveal your Web identity and personal data and fall prey to fraudulent e-mail. But at the same time, they regularly peep into the bank accounts of its customers in the name of customer relationship. And the moment they see some money lying in your account, they will start hard-selling their mutual funds or insurance products? How ethical is that?
Most banks today work on core banking solutions. This gives them access to the bank accounts of their customers at the click of a button. Of late, my bank has started making its customers "preferred customers" This way, they get a legitimate reason to call you to check why a certain amount has been credited to your account. And if the money continues to lie in your account for a few days, your "personal banker" will hassle you to invest it in some mutual fund being run by my bank.
I have had friends tell me how their personal banker (yes, the term does sound fancy; it's like having a personal trainer or a personal hair dresser) advises them on what insurance policy or mutual fund to buy. Obviously, these personal bankers are not financial planners and would not care to understand your financial goals, needs and your risk profile etc. They are just trying to meet their sales targets.
I wonder what the regulator--the Reserve Bank of India--is doing about this. Moreover, aren't there privacy issues too? Why should I discuss financial matters with a bank official, who may get transferred to some other branch tomorrow? And why should bank employees hassle customers if some money is lying in their account? Frankly what they do with their money is nobody's business; so long as there is nothing illegal about the transactions.
It's high time there are regulations for banks too. They should not be using core banking solutions as a marketing tools for their mutual funds and insurance products.
These banking solutions should help them become more efficient. Unfortunately, I do not see that happening. Outstation and foreign currency cheques take ages to get credited (it's only getting worse with time). And wire transfers take very long too.
It's not as if the money takes long to get credited or debited. I'm sure technology has simplified these tasks for the banks. In fact, the bank is sitting on your money, and earning interest on your hard-earned money. Isn't this a wrongful use of technology? It only seems to be benefiting the bank, and not the customer. I hope the regulator is listening.