Are our Bharatiya bankers turning into pesky shameless insurance agents? - Mr. Nobody's first-hand experience - PART I

Hello there friends!

Again back with some useless thought processes for you guys.  Let me first state that I am a fan of our PM, Shri. Narendra Modi, regardless of what our media or the "others" might think - I think that so far, he has done a good job.  Some say that he has only remodeled existing schemes and renamed them as a marketing gimmick for seeking attention like an ADHD-suffering child.  But then, that is what is marketing all about.  Telling our stuff to others in the most unique and catchy manner so that the product is consumed by our customers.  What is wrong if our PM is literally "selling" good governance to the public?  OK...again I started drifting away....so mean of me.  Coming back to my point, I loved the Pradhan Mantri Mudra Yojana which is nothing but a master stroke of marketing and strategy.  Marketing, because the scheme already existed (although it did not have any specific name till now!) but none knew about it [i.e. as per RBI guidelines banks were never supposed to ask for collateral security for business loans up to Rs. 10 lakhs and the same was to be covered under a government guarantee scheme called CGTMSE (Credit Guarantee Trust For Micro and Small Enterprises)].  Our PM just gave a new name to the scheme and sold it in three parts - Shishu, Yuva, and Tarun, which is perfectly fine and understandable for the common man on the road.  So, I also being a common man, went to my nearest bank (identity of the bank is held to protect "my" safety!) to get a loan under the Mudra Yojana so that we can invest in our blog and make it a full-fledged website.  The manager and staff were really good and they told me curtly regarding the procedures to be followed to get the loan but there was only one catch - I had to buy an insurance policy and that too from ONLY from the insurer which is having tie-up with their bank.

I requested them to give me at least a week to think and plan regarding my finances (since I don't want to be a defaulter and would like to perfectly repay back my loan to the last penny) and then come back to them.  I interacted with my fellow small business colleagues who had already availed finance from various nationalized as well as private banks and was greeted more or less the same story.  Buy an insurance and get a loan!  In many of the cases, the banks did not even seem interested in the actual project that we were taking the loan for!  They just leeched the customers to take on the insurance policy and sign a few agreements and the loan was there for them on the platter - no questions asked...Great way to utilize public money, I guess.  I am now thinking of making a movie similar to Prabhu Deva's ABCD series.  But mine will be titled ABCB - Any Body Can Bank - which I guess will break all records of at least Prem Ratan Dhan Paayo!

I went back to my banker and told him I do not wish to purchase the insurance since I am more than adequately protected by my present insurer.  But then who am I to teach a banker regarding personal finance.  The banker persisted.  I persisted even more.  The banker then called me one day to the branch.  There was another gentleman sitting in neatly ironed Knighthood black trousers and chic Arrow shirt sitting alongside me.  He introduced himself as something called a BDM of the insurance company (which was having tie-up with the bank).  For the next more than one hour, both the manager and the BDM put me through third-degree torture explaining to me the benefits of my death as well as the benefits of my staying alive. At one point of time, I was feeling really elated on being a mortal and getting the golden chance to die for getting the insurance money.  They were masters at the game of selling, at least, the manager was!  As per both of them, in case I survived for another 10 years and paid their premiums on time, I was going to be richer than Mukesh Ambani and Jack Ma put together after the completion of 10 years and in case, I died, my wife would be.  And when I finally told them that I did not have enough finances to pay the premiums on time, the same was answered crisply by the manager - we will give you a loan for the same!  Then I asked, "What about my Mudra loan?"  "We will give you both - take a loan for insurance policy premium and take a Mudra loan for free!"  The once-in-a-lifetime ek-par-ek-free offer was there in front of me making it utterly difficult for me to choose what to do.  When I seemed not to budge, the wily manager dialed a phone and told me that he is calling his RM/DGM (I did not quite understand what!) and asked me to speak to him also.  I was losing hope by now of continuing my business since my profits will be eroded greatly by the "premium-repayment-loan" that I will be forced to take.  My Spider-Man instinct told me to speak to the RM/DGM regarding this pestering attitude of the manager and request him to in turn advise the manager to sanction my loan.

I took the call in my hand and told him clearly, "Sir, your manager is forcing me to purchase a policy that I do not want and could not possibly handle in my present financial scenario.  Please tell him to just pass my loan on the merits of my project profitability and let me go in peace."  The voice at the other end was calm but firm.  "Sir, the insurance is a free service by the bank provided to you for your own safety.  Our duty is to protect public money.  What if you die after taking the loan?  Who will repay the loan?  You want your wife and kids to be harassed by the bank for repaying the loan that you took?"  I replied, "Sir, I am already adequately insured.  In case of my death, my wife will get the insured amount.  Since she will be my legal heir, she is bound to clear my liabilities and the same will be done through the proceeds of my claim.  Hence, I don't want this policy that you are pushing down my throat."  My logical reply seemed to offend the RM/DGM who was supposedly used to hearing "Yes Sirs" much much more frequently.  He snapped, "Look, if you want the loan; take the policy.  Or else, don't waste our time."  The line got disconnected. 

I felt totally insulted.  I came asking for assistance to start a business and what I got in return was a pesky bank asking me to take a insurance for getting the loan sanctioned, which seemed like a "legitimate bribe."  There are clear cut RBI guidelines (not rules) regarding not forcible selling of insurance policies to customers, but then who cares.

Are you listening PM Sir????

More on this later and till then,
Happy Ethmos to all!