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Awareness Fridays: Guidelines for Credit Card Operations of Indian Banks

Vinaya HS — Fri, 21 Nov 2008 05:57:39 +0000

Reader Shankar asks,

Is there any Master Circular issued by the Reserve Bank of India on Credit Cards issued by Indian Banks?

There certainly is:

There’s some pretty useful information in these documents. Again, take some time off this weekend and assimilate its contents. You’ll be glad that you did.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

Tip Tuesdays: How to Close an HSBC Power Vantage Savings Account?

Vinaya HS — Tue, 18 Nov 2008 00:39:58 +0000

I also had an HSBC Power Vantage Savings Account with an MAQB (minimum average quarterly balance) of Rs 100,000. It’s more pain than pleasure to ensure such ridiculously high MAQBs. The account had to go.

That said, here’s how you can close and cancel your HSBC Power Vantage Savings Account:

Reduce your account balance to zero.
Download this account closure letter template.
Fill in your account and personal details.
Print and sign two copies of this letter.
Take a photocopy/scan of your debit card (for backup and safety).
Take a photocopy/scan of the first and last unused check leaves in your checkbook (for backup and safety).
Keep the HSBC Internet banking security device (called the OTA) in your pocket/purse.
Visit the nearest HSBC branch.
Handover your debit card, check book, security device, and the two copies of the closure letter.
Get an acknowledgment stamped on one of the letters (this copy is for your reference).

The service desk will verify your signature and then destroy the debit card, check book, and security device. It generally takes about four working days to close an account — you’ll be intimated of the closure through post.

Any balance leftover in the account after closure will be returned via. demand draft. Uncredited interest amount, if any, will be accounted for in this reimbursement.

Tip Tuesdays is my new initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment or use this form to submit your tip. And, as always, do spread the word if you find this useful.

Awareness Fridays: Guidelines for Customer Service in Indian Banks

Vinaya HS — Fri, 14 Nov 2008 03:15:31 +0000

The Reserve Bank of India time and again issues various instructions/guidelines in the area of customer service to bring about improvements in the quality of customer service in banks and their branches. But whether banks actually implement these guidelines is a different matter altogether. As bank customers, however, it’s prudent on our part to know and understand what these guidelines are in order that we can stand up for our rights. In order to have all current instructions on this subject at one place, the Reserve Bank of India has compiled many of the important instructions in the form of a Master Circular.

Download the Master Circular on Customer Service Guidelines for Indian Banks.

This circular is 92-pages long, but is packed with information that you, as the customer of a bank, should know.

Take some time off this weekend and assimilate its contents. You’ll be glad that you did.

Tip Tuesdays: How to Close a Citibank Suvidha Savings Account?

Vinaya HS — Tue, 11 Nov 2008 02:25:21 +0000

I had a Citibank Suvidha Savings Account that was opened as a salary-credit account at my previous job. Being a salary-credit account, it was a zero-balance savings account. When I changed my job and when salary-credits into this account stopped, Citibank converted it into a regular savings account with an MAQB (minimum average quarterly balance) of Rs 10,000. I generally detest MAQBs and given Citibank’s recent “financial adventures,” I decided that it was time to close my Suvidha account. (Why should Citibank demand an MAQB from you, when it can’t maintain an MAQB on its own balance sheet?)

That said, here’s how you can close and cancel your Citibank Suvidha Account:

Reduce your account balance to zero.
Download this account closure letter template.
Fill in your account and personal details.
Print and sign two copies of this letter.
Take a photocopy/scan of your debit card (for backup and safety).
Take a photocopy/scan of the first and last unused check leaves in your checkbook (for backup and safety).
Visit the nearest Citibank branch.
Handover your debit card, check book, and the two copies of the closure letter.
Get an acknowledgment stamped on one of the letters (this copy is for your reference).

The service desk will verify your signature and might hand back the debit card and check book and ask you to destroy them yourself. It generally takes about four working days to close an account — you’ll be intimated of the closure through post.

Any balance leftover in the account after closure will be returned via. demand draft. I forgot to ask what happens to the uncredited interest amount, if any.

Here’s a pictorial view of the end of my Citibank Suvidha Account:

Awareness Fridays: A Case Study that Illustrates how the Deposit Insurance System Works in India

Vinaya HS — Thu, 06 Nov 2008 18:31:14 +0000

Three weeks back, I wrote about the deposit insurance system in India. While that guide served as a ready reckoner, there’s nothing better to drive the point home than a real case study. One such case study — and a live one at that — involves Saraswat Bank’s takeover of South Indian Cooperative Bank (SICB). You can read-up on how the deposit insurance system is being invoked and utilized in this article published in the Economic Times.

Tip Tuesdays: If You’ve Got Overdraft Protection on a Savings Account, Call the Bank and Cancel It Right Now

Vinaya HS — Tue, 04 Nov 2008 06:09:27 +0000

Overdrafts are worse than personal loans. They make you spend money that’s not yours. They make the bank rich and you poor. Why would you ever want this to happen? If you’ve got overdraft protection on a personal savings account, call the bank right now and cancel this facility. If you don’t know whether your savings account has a line of credit (a fancier term for overdraft) attached to it, call the bank and find out.

I once had an overdraft facility on my Citibank Suvidha account. I called to close it. I was informed that once this line of credit is closed, I will not be given the option to start a new one again. I have never been happier than that one fleeting moment.

CRM Horrors: The Owners are in the Store, but You Can’t Go In and Shop because the Salesperson has Gone Out

Vinaya HS — Mon, 03 Nov 2008 10:20:46 +0000

That’s what a security guard at the Reebok store on 100 ft. Ring Road, Banashankari 3rd Stage said when I visited the store at 11:00 AM last Saturday.

I desperately needed a cap and I had committed to buy one then and there. Instead I was not allowed to step inside the store because — to quote the security guard — “the owners are already in the store, but you have to wait outside for five minutes because the salesperson has gone outside.”

WTF mate? Who am I? A committed-to-a-purchase customer or a criminal who wants to walk away with the store in broad daylight? You might have read, heard, and seen these fancy reports written by fancy experts projecting India to be “the thing” in retail. Ground reality is different. This experience at the Reebok store is not an isolated incident. Most retail outlets treat customers worse than criminals, with salespeople and security guards watching — with eyes that would rival a hawk’s — your every move.

And my response to the security guard was, “If that’s the way the owners want to run their business, no one’s going to step foot inside this store.” I actually wanted to say this to the owners, but hey, remember, I can’t go inside and talk to them because “though the owners are already in the store, I have to wait outside for five minutes because the salesperson has gone outside.”

What’s your “retail” experience been this far?

Site Statistics — October 2008

Vinaya HS — Sat, 01 Nov 2008 18:35:54 +0000

Pageviews dropped 1.55% from September, 2008. Absolute uniques almost flat.
What do you think I should do in order to increase traffic?

Reader Submission: Three Things We Should Have Been Taught in School or College, But Weren’t

Vinaya HS — Sat, 01 Nov 2008 02:50:23 +0000

I’ve been contemplating on this topic since quite some time. In a recent email discussion, Lakshmi, a friend and keen observer of this blog, put my thoughts into words. She says,

There are three things that should be taught at school, which unfortunately are not taught:

How to earn honestly,
How to manage the money you’ve earned, and
How to lead a healthy life

Looking back, I wish I was taught about — or at least made aware of — topics such as health insurance, life insurance, goal-oriented saving and investing, the power of compounding, etc. while in school or, even better, in college. If I’d had knowledge on these topics prior to entering the workforce, I wouldn’t have made these really dumb mistakes.

What do you think?

Awareness Fridays: A Reader Success Story…All It Takes is a Little Bit of Research

Vinaya HS — Thu, 30 Oct 2008 18:33:47 +0000

A while back, reader Lakshmi wrote to me saying,

My mom is particularly concerned that my brother’s job is non-pensionable and recently she heard about the SBI Life Insurance Pension Fund. Please throw some light on this matter.

I couldn’t write back since I was held up with other work. But Lakshmi soon wrote back with this update:

About my previous questions on finance, I did some work myself. The SBI Life Insurance Plan is just a Unit-Linked Pension Plan and clearly states that the investor should bear the market risk. In short, they are saying that they’ll take our money only to lose it by investing in shares. I’ll go home and call up my aunt who suggested it in the first place.

Brilliant. I repeat my advise: Never ever invest in a financial instrument that you don’t understand. And to understand, all it takes is a little bit of research. That’s how you develop awareness.