SBI: Structural Rigidities That Refuse to Leave the System?

The State Bank of India (SBI) has always been an active ingredient in our generational bloodstream—like in that of almost all of India’s state and central government employees and their families who have either salary accounts or pension accounts or deposit accounts or investment accounts or all the beneficiary accounts required by the governments to enjoy the benefits of various schemes. No doubt, the pressure on the bank has always been immense across the nooks and corners of the country, impacting the performances of the various branches. But the bank has been marching well with the digital developments over the years and for many of us the branch visits have been reduced to the minimum. Besides, the SBI’s net-banking site which is indeed a very secure and user-friendly, and the YONO App have done their bits to ease the hassles of the accountholders. However, despite the tremendous advancement of banking a few rickety old rules or diktats that we’d refer to as ‘structural rigidities’ still haunt the system and dilute many users’ otherwise seamless experience. As a loyal accountholder with SBI since the days of my father I’ve had my share of some nasty experiences that I intend to dwell upon here.

Quite a few years back my wife and I had applied for a home loan. Thanks to our branch along with the loan-sanctioning RACPC office of that metro city the process had been very friendly and hurdles-free. The loan being sanctioned the EMIs began to be deducted from my salary/savings account every month. The lady bank executive concerned also took pains to explain to us that the initial EMIs would be much higher and then from a year or so later it’d be reduced and stabilized. Of course, the ‘systemic’ text messages/emails/even phone calls came to every month urging me to pay on time as if the bank were blissfully unaware of the automatic deductions!

One fateful morning, after about three years of paying the EMIs, I found that the deduction for that month didn’t happen. It was perplexing, for there was absolutely no intimation to that effect. Instead of phoning the branch immediately I decided to wait for the bank’s intimations which I was sure would come sooner than later. One text message did come a few days later; but that only managed to worsen my confusion.

The text message stated that about a hundred bucks was pending in my home loan outstanding which needed to be paid immediately, else it was going to adversely affect my credit score. So, I logged in to my net-banking page and tried to transfer the paltry amount to the home loan account. To my horror the payment was not accepted. I tried again and again for days with the same adamant result. I phoned up my branch and after a seeming eternity of endless ringing one employee told me that the branch had no information about that and asked me to contact the RACPC office. I couldn’t do that because I had no telephone number of the concerned officer there. As I was out of town during that period I asked a friend of mine to go there and inquire. The friend obliged me, but said that no officer or clerk there could give him the required update.

So, the text messages kept on coming month after month and I kept on failing to transfer that hundred bucks. I was at my wit’s end. I wondered why the largest bank of India would thus go on crying for that hundred bucks instead of simply deducting it from my linked savings account or allowing me to transfer! Finally, not knowing what was the best course to resort to, I decided to courier a cheque of that fateful hundred bucks addressed to the RACPC to my friend asking him to personally hand over that at the office. He obliged me again, but informed me that the bank clerk refused to accept that cheque too.

Feeling sorry for my predicament which was absolutely for no fault of mine, the friend decided to tap all his sources in the bank and finally, someone asked him to go to a particular officer hidden at a desk somewhere in the labyrinth of the RACPC complex. That officer gave the monumental verdict we waited so desperately for: the said home loan account had stopped functioning because the concerned builder failed to complete the construction for the next phase and therefore the funds to be paid to him had been withheld, and that we needed to close the said account if we thought there was no hope of the housing project progressing further.

I was astounded. Why was this simple information not conveyed to me? Why were my transfers/payments not accepted? Why was that meagre amount not deducted from my linked savings account? And indeed, the supposed non-payment of the ‘EMIs’ (read 100 rupees) over the months did reduce my credit score substantially! The credit score page still reflects those ‘lapses’ to the SBI home loan! It’s another matter that eventually I went to the RACPC office along with my wife and friend and closed the account permanently, and finally, the ‘debt’ of hundred bucks was cleared! It’s also altogether a different matter that we lost our hard-earned money to the builder who had no inclination to compensate! But the questions for SBI remain! If these are not the rickety ancient rules or structural rigidities that refuse to leave the digitalized system alone then what are they?

More recently, I accepted the SBI’s offer of a pre-approved personal loan to tide over a temporary crisis. Everything was done on my net-banking page—the amount, the tenure, the immediate disbursement, the EMIs and the automatic deductions every month. I was really happy with the convenience of the process and tried to forget the previous unsavoury experience! I think I had read all the terms and conditions associated with the loan properly and thus I was sure I couldn’t find the clause that ‘partial pre-payment of the personal loan not allowed’, unlike most private banks.

Therefore, one fateful morning when I found that I had some surplus funds, I decided to pre-pay a substantial part of the total outstanding so that I’d enjoy a reduced burden of repayment for the remaining period. I realized my mistake right after the transaction which was seamlessly accepted, unlike the peculiar previous instance of the hundred bucks refused again and again and again.

Absolutely nothing happened to the EMIs, although the outstanding amount got reduced considerably with the tenure remaining the same! The same amount continued to be deducted from my linked account as before. And as I feared the obvious scenario emerged eventually.

The day came when the EMI amount became bigger than the outstanding amount! Therefore, the monthly deductions stopped! This time the text message said that the remaining amount needed to be paid immediately for which a branch visit was mandatory.

This time I got plain angry! Why force a senior citizen to visit the branch after all the bank’s efforts to minimize it and the sit-at-home comfort offered through their YONO App, and that everything about the said loan account was done online? There was another matter that also contributed to my indignation. A modified fixed deposit account I opened long back got reduced to less than ten thousand and therefore I put my maturity instructions clearly online to close that account; but despite that the branch decided to extend the account for two more years.

My anger made me call up one higher SBI officer I knew for a long time and let him know of the issues. The higher officer must’ve issued some instructions to the branch manager; but instead of helping me out the manager put a freeze on that modified deposit account which made me realize the obvious! So, when I finally had to visit the branch to accomplish the pending hassles I noticed a palpable stiffness in the manager’s attitude while attending to me.

I think a revamp of the SBI’s digital banking system to rid it of the archaic rules would help the accountholders immensely. Thanks to the rigidities I incurred personal losses on at least two counts: first, the erosion in my credit score; and second, the apparent loss in my long good standing with the bank branch which would result obviously in debarring me from the bank’s periodic beneficial offers relevant for me. For absolutely no fault of mine!