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!

Manoj Gaur: The Superman of the Indian conglomerate Jaypee Group [No Dream Too Big] - Mr. Nobody's perspective

THE ALL-SEEING EYE OF ETHMOS

Hello there....good to see you all after such a long break.  We are sorry for the delayed frequency of our articles but the fact of the matter is that we were actually a little busy with our other small priorities like growing our Ethmos.  So, after putting our hands and legs into some serious public problems (as well as solutions), now we are going into exploring the corporate world of our country by giving a short analysis of premiere companies that have helped in creation of our Brand Bharat for the world.  Now most of you will be knowing about the Tatas, Birlas, and the Ambanis; but, today we will be giving you a short glimpse of a company that many have written off as a failure right now but we at Ethmos are able to see the true strength of a company in its ethos and values.  So, here goes nothing about the Jaypee Group!

Manoj Gaur is the poster boy of the Jaypee Group and he is actually living the tag line “No Dream Too Big “. The debt ridden group is actually standing on vast debt of Rs 61,285 Cr. However, irrespective of the debt position, we at Ethmos believe that Manoj Gaur will be able take the group from the clutches of debt. Group has already divested one-fifth of group assets, but troubled economic scenario, especially in the infra sector, is making matters worse. The issue for the group is that it is a conglomerate with wide range from infrastructure to hospitality, from sports to Information Technology, and from healthcare to sports.

Usually infrastructure projects are financed under project finance where the SPV (special purpose vehicle) will be created and the project will be financed by a consortium of the banks. The equity will be brought in by the interested parties. Usually debt equity ratio of the project related to infrastructure finance is to the tune of 70:30. The future repayment of the debt portion will be subject to  the revenue generation capacity of the project. The equity holder’s other project will not be liable for the SPV in case the SPV is not working up to the mark from the COD [commercial operations date].

In an interview Shri Manoj Gaur has mentioned that between 2006 and 2012, the group invested Rs.60, 000 crore in real estate, power and cement. “But in the last three years, analysts and people feel that there is too much leveraging and too much investment,” The sub 5% GDP has taken toll on the Group in their heyday. However, Manoj Gaur has reiterated that CDR [Corporate Debt Restructuring] mechanism is not a solution. But by going for CDR, the group will be able to get some time which can be utilized in much efficient way rather than going for a brisk asset divestiture.

Jaypee Group – Asset Quality

As far as the asset quality of the group is concerned, we are literally talking about plant and machinery rather asset quality as per balance sheet. Group has not bought a single screw from China; they usually go for the countries like Germany and Japan for the heavy equipment machinery. The asset quality of the group is world class that is the reason that not only the foreign players such TAQA, but also Indian giants Reliance and JSW are interested to get the pie.

What went wrong?

Jaypee group entered into the fertilizers by buying Duncan’s Kanpur plant. The transaction resulted in the Jaypee Group investing nearly Rs. 700 crore to enter the fertilizer business.

Similarly in 2013 the group entered in the business of chip making in venture with IBM [International Business Machine Corp.]. The Group is entering this business when the chip tycoons in the countries like China and Taiwan have already made billions. It is not expected from the group to enter in such segments when economic outlook is not good. The green filed investment should be avoided when the debt position is not good.

Abu Dhabi National Energy Company PJSC (TAQA) was initially interested in buying the hydro power plants; however, due to undisclosed reasons the deal did not materialize. At the same time, Reliance Industries also showed their keenness to buy the same. The power plants were eventually bought by the JSW Energy Ltd for Rs. 9700 Cr. The Group has also sold a piece of land near Delhi and a cement plant which generated the whooping amount of sum Rs. 6,900 Cr. The brisk sale of assets might improve the cash position, but will it be beneficial in the long run?  The group has already slipped from the third largest to fifth largest producers in terms of cement production.

Action Plan by the Nobodys of Ethmos:-

Go for the CDR mechanism since it will get some time for introspection.

Introspect group’s assets; don’t sacrifice the assets for short term gains.

Do not go for any greenfield projects as the debt position is already high.

Rather than sacrificing the assets, go for the equity sale, which will generate cash and will have presence in the projects as well.

Brand building: Create a new brand image.

Retain the greatest assets, aka, employees.

Try to find amicable solutions for the stuck up infrastructure projects where group is a supplier.

We believe the actual asset is an off balance sheet item, which is the leadership of the Gaur brothers and integrity of the Jaypee Group employees. Tough times never last but tough people do. Under the leadership of Shri Manoj Gaur, we hope that the group will see the resurgence like phoenix.

Mr. Nobody's perspective on OROP (One Rank One Pension) in an Army veteran's words

So we are shamelessly back again with one more "no"issue which we may not think that you will be enjoying since you have so much to enjoy in the form of saas-bahu, naag-naagin, and whatnot type of entertainment serials whose stories are also repeated in the prime time "news" channels of our country.  But since we never ever care about our TRPs, we will as usual follow the right way rather than the easy way and bring forth the issues which you will never even bother to care since you are not even appraised of the situation by our "paid" media.  But first of all, we would like to kindly go through this article which has been posted by a retired Army veteran regarding the One-Rank-One-Pension scheme (OROP).  Due to space constraints, we will not be discussing what is OROP over here since there is too much literature available on the internet for anybody willing to read about it.  What we are bringing forth is the pain of a man and many more like him who have fought; served; lived but not lived; debilitated their body, mind, and soul; and dedicated their entire lives to either save the country from external and internal threats or conducting rescue operations in natural calamities ranging from earthquakes to floods.  We hope this article by retired Colonel S. S. Cheema will at least stir your conscience and God forbid if every serving defence/paramilitary personnel becomes frustrated like this, then our country will not go to the dogs but will definitely go to the ISIS!  So here goes:-

"OROP

I do feel ashamed to ask for OROP. At the end of all this what did I really do? Of course, I did one tenure of Leh, flying at 20,000 feet plus altitude, then one tenure flying at North Sikkim again at 20,000 feet plus of altitude (with no integrated Oxygen masks, which my country could not procure for 22 years I was in uniform) and one ground tenure at Gurez - oh that ? it was only at 14,000 feet stay for 2 years - a cake walk. The doctors do advice there should be no more than 2 tenures at high altitude - but I am sure they would have some vested interests in saying so. But then look at the hardships of my counterpart bureaucrat - He had tough decisions to make - there were power cuts every now and then in those days over and above he had to handle the pressure of politicians, and imagine the pressure of getting some tons of money home and trying to hide it. He could not comfortably sleep over it as they poked his back through the mattresses. He was living in perpetual fear. Anyone can nab him - that no one did as long as he did not become overly greedy is another part of it. What pressures did I have - believe me - NONE, I laughed and LIVED my life to the fullest when I was up there, and when I was down here. I stood on the bund of my bunker after two drinks and threw best of my abuses to our adversary - of course who would have been stupid to shooting me down - a Paki ? forget it - those bastards could never aim straight. And then I had so much activity to choose from, how could I not live to the fullest - I mean. There was a competition with my senior subaltern as to who can cross the LOC and piddle in the enemy territory in the middle of the night. Bloody hell we could not decide the winner because both crossed over and did the thing, We had to repeat it for a week before we were caught by our company commander. Now imagine the hardships of my counterpart - close your eyes once again and think - Blood pressure and the diabetes of long and stressful working hours. No entertainment other than a few clubs, drinking sessions and back to his home. How could I not think about those poor souls ? Dying at 90 (in Chair) doing their good work because a bureaucrat, a Judge and a politician never really retires. He works and dies in chair - after all, there are so many studies, one man panels to study and planning commissions to sit too. If he continues getting his house, a few servants (aka Helpers) and a vehicle to run around - he deserves it. If he really gets sick of it and decides to retire (an honest) bureaucrat would have only 200 odd crores at his disposal - he can only buy a small house and live his remainder life in poor perpetuity. My discomforts are just my imagination because I cannot remember number, name and I have a loss of words when I am speaking. Doctor said that it may be “High Altitude Affect” where the rare air has low Oxygen levels and kills the brain cells. (I was really good in my hey days with numbers at least). Oh! he has to be wrong. In any case, I would have got memory loss within another few years.  So why the hell should I attribute it to hard service conditions?And then my demand is more so unfair when I heard our Prime Minister Mr. Modi say that the OROP is at the cost of the poor of our country. Imagine the millions of FREE mobiles, laptops, TV that could have been distributed to the poor. Imagine the poor could have been lifted from their poverty (what has not happened for last 60 years) in one stroke of the money being set aside of OROP. He could have bought a better Jet, better and more secure multimillion dollar cars - after all he is now the Prime Minister of the fastest growing nation and has to live his life so. And then why do I deserve OROP as I quit my job only after 22 years? I did not serve to my last day of retirement. Well I should have continued. So what if I lost my mother and my father (Also a retired Fauji) was all alone and his second son was also serving in Fauj? He could have always stayed alone - after all he was from Infantry and could have done so for some more years of his life. Because I was a Fauji and in anyways due to posting to field - my wife and children could have shifted with him. That besides the point that none of the school was forthcoming to give my daughter and son admission. They (Like me) had no permanent friends as till class 9th they had changed 8 schools.There is another thing that I overlook - I chose to be Fauji - why should I crib? I signed a bond when I entered NDA at the age of 17. I should have read more carefully. That besides the point that most of these bureaucrats were studying hard for IAS and other services at this age and their mothers were still wiping the shit off their ass.The Politicians and the Bureaucrats are fighting a battle and not looking at the bigger picture. I pray to almighty that this fight should not change the outlook of the serving Faujis - They (Bureaucrats and Politicians) may win this battle - but they will lose the war and the nation will suffer. But then who cares ? like shit anyone does. I was an idiot all along and hope to die believing that this nation is mine…. - Oh and me I am a proud Col S S Cheema (retd)It is indeed a sad day for me. My Grand father was in army, my father retired from army, my brother retired from army - and I have told my son - you will join Armed forces over my dead body...."

We, from Ethmos, personally apologize to you Sir for having brought the situation for breeding these thoughts in your mind and in the minds of many like you who have given their everything for worthless animals like us.

So, for our Honorable government as well as the cribbing media who thinks that the cost of OROP, which is estimated at Rs. 8,000 to Rs. 12,000 Crores is too big and demanding for our poor junta, here is the solution (which we have already mentioned in our numerous previous articles but repeat at the cost of repetition):-

1.  Kill the "cash-based" economy - Make the public (we are pointing towards the business-class public over here) to COMPULSORILY transact anything above Rs. 20,000/- through cheque and account transfers.  This provision is already given in section 40A of Income Tax Act 1961 but our babus never care to enforce this section because they are too busy collecting their haftas from the public.  Since it will take a generation to change the babus, what the government can do is a BLANKET BAN on any cash withdrawals or deposits above Rs. 20,000/- in any Bank/Financial Institution/Organization.  How will this effect OROP?  He he he...this will lead to documentation of transactions in the bank accounts and better tax compliance and higher tax collection.  If we are correct in our financial maths calculations, this will directly and indirectly lead to more than doubling of our tax revenues (which is presently only Rs. 5.45 lakh crores from direct taxes, a.k.a. income tax).  Furthermore, link all the tax departmental servers into an integrated central taxation server system wherein the returns filed by any businessman can be cross-checked/verified/scrutinized by all the tax departments because most of times, only big businessman are paying anything of the sort of Sales Tax, VAT, Service Tax, etc. while the small and medium guys just get free by paying the regular income tax without declaring their correct turnovers. (More details on this later in our forthcoming articles).

2.  Kill the corruption-based economy - make corruption a non-bailable cognizable offence regardless of the rank and position of the official.  A longer and harder stick is required when the bull is out of control - common sense of course!

3. Introduce the Bank Transaction Tax system wherein the tax is collected based on type of transaction, which is will improve tax collection as well as reporting system.

4.  Curtail the British Raj era systems of providing mansions and palaces along with chauffeur-driven vehicles to civil servants.  We received independence nearly 68 years back and need not pamper a few people for doing what is duly their duty to be done for which they are being paid and rewarded handsomely.  How will this affect OROP?  Again, it will lead to huge cost savings.  Presently, a Group A service officer (like IAS, IPS, etc.) is entitled to travelling by an Innova car which consumes a liter of diesel for every 8 to 10 km it runs.  Why can't we replace it with a fuel-efficient car like Tata Indica? (of course, it will be low on the style and aura quotient but will do as well at less than half the cost, since the purpose is to travel rather than flaunt your power).  Furthermore, for any small family to live, a 3-BHK or 4-BHK apartment/house/villa is more than sufficient - why spare an entire acre of real-estate to again pamper these people who have the habit of getting so since the Raj era because the primary idea of the Britishers was to "crush the mass by empowering the class."  The space saved can be used for more productive revenue-generating activities like tax-collection centers, schools, hospitals, and what not.

Dear PM and FM Sirs,

These are just some of the suggestions that we put forward to you so that nobody can cry hoarse that we don't have enough money to pay these gentlemen who have given more to us than we can ever repay them.  Please at least treat them with the honor they so genuinely deserve.

Thanks and happy Ethmos to you all!

An open letter to the would-be wife of an Ethmotican by another Ethmotican

Dear Madam,

First of all we would like to congratulate you in advance and wish you a very happy and adventurous married life ahead.  Yes - it will be happy + adventurous since you have made the choice of getting married to one of the founding fathers of Ethmos (please don't kill him for becoming a father before marriage!).

We don't know how much you really know or understand him.  But let us tell you one thing that you are one of the rarest of the rare, fewest of the few on Earth who has had the opportunity to meet and marry a person in whose mind the ideas of Ethmos grew, who coined the name Ethmos, whose is one of the most knowledgeable and intelligent persons that we have ever known and yet so humble and gentle that he even treats his many mentally-retarded seniors with utmost respect.  We know that he may be rash or maverick at times, especially while talking, but then if you appreciate, that is the mark of a true genius who does not want to compromise on quality and character and again if you appreciate this, character is something very very rare a commodity nowadays since God has also started reducing that quantity drastically in the humans which are manufactured these days.

So what is that a man of character has different?  A man of character will care for you although he may or may not show it in front of you, but he will care for you nonetheless; he will never lie to you or cheat you and will always make sure that you are given the utmost priority in his life after his work.  And when we talk about work - please don't feel bad when he is too busy working because if you understand it, please understand that whatever he is working is first for both of you and your family and second for making this world a better place to live in.  There is a higher mission to Ethmos that was his idea and brainchild - to make Ethmos a think-tank rather than a dry consulting service - a think-tank which gives opinions and reports on virtually everything of importance going on around in our country and the world - It was HE who brought the paradigm change to Ethmos and made Ethmos as it is today and We will always be indebted to him to this for our lives.  In layman terms, he created what is to Finance & Economy as Google is to internet and Microsoft/IBM/Intel is to software.  If that is a small feat, then really sorry to waste your time!

We also want to caution you that he may get bouts of serious "thinking mania" wherein a person is so deeply engrossed in thought processes that he may miss to do routine things like keeping newspapers in place, properly keep dresses in the cupboard, keep plates and glasses correctly on the dining/kitchen table, and many "important chores" that "regular and normal" people do.  But since an Ethmotican is no normal being in the sense of being "normal", please do not expect this from him.

And finally we would like to assure you and guarantee you just one thing and we are sure that even if you do not believe us now, you will agree with us 5 years from now, that you are marrying one of the best and most gentleman to have ever walked on this planet and that he will keep you happy and fulfill all your ambitions in more than enough and sufficient ways that you can ever imagine of in your dreams.  We guarantee you that you will be getting to see and enjoy many places (inland as well as foreign - and that will be through Ethmos and not through his present job!), dine in some of the best restaurants around the world, get the best in the world in anything you can think of, and what not and whatever you can ever imagine of.  We grandly welcome you to the Ethmos family and wish that your addition will further take us to the new horizons of success and you find your best partner in our maverick friend who has proved time and again that he is what you get when you try to put life into the Kohinoor diamond.

Happy Ethmos to you!

Prem Ratan Dhan Paayo - A first hand review by Mr. Nobody !

Now now...we are entering into totally unchartered waters over here....from hardcore economics, finance, administration, politics, and governance to bollywood and entertainment.  But then what to do, we had the misfortune of watching this movie by Shri. Sooraj Barjatiya since we had no other better thing to do on a Diwali/New Year combo holiday.  We went inside the hallowed halls with an expectation to spend some quality time watching a movie and set our mental burdens aside, immerse in the movie and forget our personal problems (of course, everybody goes to the movie for more or less the same purpose only!).  We did come out of our problems because we had a bigger problem in our hand in the form of the never-ending movie with more songs than there are stars in the Milky Way and the worst of all - the actors are singing songs for literally no rhyme or reason.

The dresses worn by near about all the characters were as if they were designed by imprinting the colorful frogs, snakes, and butterflies from the Amazon rain forests - they were bright and colorful of course but then in the real world, who wears such clothes on a routine basis.  Oh yeah! You may argue that Mr. Barjatiya was trying to portray a royal family but then the portrayal was not up to the mark because even royals don't do theatrics and circus as he has shown in the movie.

And the worst part was that the movie lacked any logical sense even in the terms of "movie logic" like hero jumping 20 feet without assistance, sidekicks or gundaas of villains getting flat with one punch while the main villain not even getting a scratch even after multiple punches & kicks by the hero, et al.  In this movie, at the end, in one scene the villain was punched out by the first Salman Khan and in the next scene itself the villain miraculously appears on top of the dome-shaped mansion (which is supposed to be made of glass!) and falls to his death (he he he...that was the best comic scene in the movie and you can get at least 10% paisa vasool for that!).  In another scene, the step-sister of "another" Salmaan Khan just tears off the "original" land documents handed over by him to show her love and affection towards him!  Great Job Jerko!!

And the worst of the worst part was the lady Sonam Kappoor who could not control herself from singing every now and then to express her "feelings" and depress our feelings.

Finally - just one advise - if at all you want to go and watch this nearly 4-hour-long torture, better take some aspirin pills for headache, Combiflam for body ache since your body will get nearly numb by sitting for such a long time, and if it is possible (but we highly recommend this!), then take an inflatable bed so that in case you can't tolerate it more, you can at least sleep in the air conditioned hall.

We do appreciate Shri. Sooraj Barjatiya's timing of release of the movie since he knows that the entire Bharat will be sitting with no better business to do than watching his movie with their families.  Plus there will be no newspapers on Friday (due to Diwali holidays) to show his movie's review, which is the prime reason why we are putting our review just to warn our country's citizens.  We highly recommend this movie to our Police forces like CBI, NSA, etc. for torturing the hard-core terrorists.  Believe us - it WILL work - and if you don't believe us - then go for yourself and watch the movie but please know that you have been warned!

THE ABC MODEL OF BANKING - PART II

Our first article in this series wherein we had proposed a radically new model of banking was received very well by our readers.  Herein we are providing an extension of the same idea and proposing some more betterment and improvement in our system of banking.  As we always say, our emphasis on banking is only for the sole reason that it is the banking system which is at the heart of the economy (in literal sense!) which pumps money and circulates money into the system and thus keeps the economic systems of the world running.  Just like a healthy heart is required for a healthy body, a healthy banking is required for a healthy economy.

DIGITAL BHARAT : APNA MITRA – new age of banking

Are our rural households digitized enough to call Bharat a digitized Bharat?  Here we are not talking about the internet.og initiative of web giants like Facebook. We cannot call Bharat digitized if our rural and semi urban population have to stand in a queue in front of Bank, Tehsildar office, Taluka panchayat etc.

A secured payment gate way is the need of the hour. We are discussing the digitization solely from the bank perspective. In the age of mobile banking, internet banking and phone banking where is the banking?.  An illiterate person is still facing the issue while opening a bank account, withdrawing the money and sending the money. We call for a one stop solution. Whenever the rural Bharat customers come to the bank, they face a hell lot of issue regarding transfer of money and it’s not because of bank or bank staff it is because of the stringent KYC rules, which majority of the layman rural public are unaware of. Why we require PAN card when a simple and strong document such as Aadhar card is there?  It’s high time to appreciate the use of Aadhar card.

 HASSLE-FREE ACCOUNT OPENING

As mentioned in our first article, even an illiterate person can open an account without signing a paper work. Mr Nobody has come up with a digitization solution for banking in our Bharat.  Just go to APNA MITRA [ Name of a banking Kiosk ] and One Mitra [ Business correspondent – any government/bank  appointed person ] will be there who will help in opening of account . Just provide Aadhar card number and biometric signature [ thumb imprint ].  If both match then automatically the kiosk will show nearest bank and its branch;  if user wants to select some other bank, then that option will also be there . Click on submit and go to the concerned banks' business correspondent [ BC}. BC will issue the passbook with Aadhar no as the Unique Customer Identification number (to prevent duplication of the same person opening accounts in multiple banks) and a bank-specific account number.  While issuing the passbook, the BC has to ensure the nomination of the account.. The data collected at the Kisok will be updated at the back end of various banks in batch at the midnight so that customer will not face any issue. Probably by this, everyone can have a bank account especially an illiterate person.

THE NEW PAYMENT GATEWAY MODEL

For the new payment system we propose a system of BIDN or the Beneficiary Identification Detail Number which is nothing but a type of PIN (or personal identification number) that you use for withdrawing cash from your ATM, etc.  It is scientifically proven that generally a person can remember well without mixing up any number upto 4 to 5 digits and hence the PIN is normally kept at 4 digits.  A similar PIN or BDIN can be issued to all account holders that will help them receive cash from others just by sharing their BDIN with their benefactors.  The transfer system should be something like this:-
->Person will go to kiosk and put his/her thumb on biometric panel.

->Aadhar card and corresponding bank accounts will be displayed

->Select a bank account

->Go to transfer section

->Enter the BIDN [Beneficiary Identification Detail Number]

->Select the account

->Put the amount and click on transfer.

->Click on submit.

Aadhar card no is having all the details such as name, phone no, Date of Birth , Address and Biometric. So if we create a central clearing center where central database will be maintained containing bank account number and aadhar card, kiosk will be setup at the place of  high security such as police station , bus stand , railway station, airport , hospital , public offices and banks etc  where the  threat perception will be low , so that user will be able to do the transaction peacefully. The whole network will be under the supervision of the central bank under the vertical of central clearing system.  User should be in possession of BIDN number [Beneficary identification detail number] of beneficiary before doing the transaction of sending the money.  In case of government and corporate accounts, the user has to request for BIDN himself /herself.  For generation of BIDN the beneficiary can call a toll free number constituted by the central clearing system where IVR will ask to put the Aadhar card number and account number.  If the three fields, i.e. registered mobile number, Aadhar card number, and account number will match then, BIDN will be messaged to the user on the registered mobile number.  If user is not using the registered mobile number, then IVR will ask the user to pitch in date of birth and registered mobile no to create a secure framework.  After receiving the BIDN the sender has go to a nearest kiosk , wherein he / she has to put his/her thumb imprint and Aadhar no to login. After logging in, the central clearing system will display all the account numbers the user is maintaining with different banks. User has to choose the desired account number, put the amount, BIDN and submit.  Money will be transferred immediately.

This particular system can be used for ECS [ electronic clearing System ] as well.  We appreciate the services of IMPS for sending the money, but for rural and semi urban population a simpler payment solution might be more helpful.  Probably after reading the article readers might think that Mr Nobody has come up with another junk , but it is fact if we are unable to increase the economic status of rural and semi urban households we will not be able to achieve the dream of digitized Bharat.  And for this to happen it is also required that all the government departments such as revenue and land records can also come up with a functionality to get the requisite documents online thus leading to decrease in corruption and an increase in efficiency.

A Happy Ethmos to All!

A brand new legal and constitutional framework is the need of the hour for our Bharat - An Ethmos analysis

THE PRESENT LEGAL & CONSTITUTIONAL SYSTEM OF BHARAT -
We are back again and this time we are heading into the rough waters of politics again and again repeat our same disclaimer that we want to inform and generate a healthy debate over this issue and not to create a ripple, hungama, or scandal in our Bharat.  What we are raising over here is a very valid point and we want our fellow Bharatiya people to at least have a thought about what we want to say.  So here goes:-

The present constitutional and legal system of our country are a direct offshoot of the erstwhile British era.  Our constitution has been framed by taking into consideration all the "good" points from all the major democratic systems of the world; but it is a matter of fact that the base template of our constitution is nothing but the Government of India Act 1935.  After the creation of our constitution, there have been a total of 100 amendments to the same so far as on August 2015.  Strange that a country of nearly 100 Billion find every thing hunky dory in our legal framework except a mere 100 points to change in a span of nearly 70 years!  Anyways, that's again not the point - sorry for the distraction.

Our point is that the British era legal systems were framed, particularly the GoI Act 1935, in order to just delay the departure of British from their colonies like Bharat.  They wanted to create a legal framework wherein it would become next to impossible for a common Bharatiya to get justice and extremely easy for the lawmakers to bend, interpret, and implement the laws as per their whims and fancies so that there is minimal "technolegal" resistance from the then "intelligentia" of Bharat who wanted to free our country through "legal" means (which was nothing but negotiating with a hungry wolf by calling it for a tea party hoping that it won't eat you!).  So, the Britishers just made circulatory laws and went on creating committees and commissions for creating more circulars and interpretations of the previously made laws.  This led to the creation of a huge amount of literature regarding even simple subjects like theft or robbery (cases which are pretty straightforward and where the chances of ill-intentions are on a rare basis).  This huge literature in turn lead to delaying of judgements and thus delaying of justice for the common poor Bharatiyas who had no where to approach in order to get justice.  Ultimately this was the cause for the huge resentment in the masses and the various revolutions that took place in the country.  Justice delayed is nothing but justice denied and when justice is denied to someone who is true, where will s/he ultimately go rather than taking up justice in his/her own hands - which will ultimately increase the crime rate in the society.

WHAT WE SUGGEST?

Nothing but a lean and mean constitutional system wherein the judgement systems are fair, fast, and transparent.  How to do this in the present scenario?

1.  The best step would be ask suggestion and public opinion regarding changes to be brought in various Acts and sections of the law and make it more "Bharat" oriented rather than any community or section oriented.

2.  There are presently more than 3 Crore cases pending in total in all the courts in our country.  If you consider even the minimum number of two contesting individuals for each case then also it translates into nearly 6 Crore people seeking justice in our Bharat, which is nothing but nearly 4.6% of our population.  So you can say that out of every 100 person in our country a minimum of 4-5 people are victims of some or the other injustice.  And as the old saying goes, one rotten fruit can destroy the entire basket - imagine what 4 to 5 discontented people can do if somebody gives a vent to their discontent?

3.  What we suggest is that the present system of British era courts need to be changed.  There should be at least one junior judge in every police chowki in our country who will be looking after the investigation in tandem with the police and deliver instant justice based on prima facie evidence.  For example, if a person is coming to the police with the complaint of being beaten up in public, at least the police and the judge can arrest the culprit and give him "primary punishment" instantly based on witness accounts.  Anyways, you will be doing the same thing after 6 to 8 months of paperwork and summoning of the culprit but then presently what happens is that the culprit simply manipulates the witnesses and gets away.  This is how gundaraj is formed in many small towns and villages in our rural badlands!

4.  All "small-level cases" like theft, beating, chain-snatching, etc. wherein no physical injury or death or any major economic loss has happened can be dealt at this junior judicial level only at the police chowki itself and that need not be escalated to the higher judiciary.  This will free the already time-strapped judges to concentrate on higher-level criminal and civil cases and dispose them speedily.  The same can be applied to Section 138 cases (cheque bounce cases) because majority of the pending cases in our courts relate to the same.

There are many other options and suggestions that we would like to offer but due to space constraints, we will be discussing the same in our coming articles.  But what is required is the will of the people to implement this and change our Bharat for the better - if not for us, then at least for our children so that they can live in a safe, sound, fair, and transparent environment.

High bad loans due to poor credit appraisal skill of banks - RBI - An Ethmos analysis

So after giving a totally new model of banking (we call it the ABC Model), we are back again to court some controversy over here.  We are telling from our own experience in the banking and other government sectors that bankers are some of the most meekest people in our country, which is the primary reason why they are being used more or less by everyone, ranging from the political class to the aam junta as a hanging bell on the door of a temple which can be banged by anyone.  Don't believe us?  Just try misbehaving with any banker in any bank and there is a very good probability that you will be treated in the best of Gandhian fashion and even after repeated insults, shouts, tantrums, and name-callings - all that you will get in return is a "Thank you Sir" at the end.  And now try the same "bang bang" in any other government office and just make sure that you bid a good hearty adieu to your family before you do so, because in all probabilities, you will end up behind the bars for a pretty long time.  Now, the reasons for the same are much much many and we don't want to extrapolate on them.  Our point is something else - we just wanted to highlight that bankers are being made a "Mandir ka Ghanta" one more time (anyways, they are much used to it by now and just don't care!) by the RBI itself who believes that the poor credit appraisal skills are the reason behind the rising NPAs in the present banking ecosystem.  Please click here to read the complete article.

You tell banks not to take No Objection Certificates for "small loans" up to Rs. 1 lac in case of agriculture sector since there are credit information companies who give the entire janam kundalis of the borrowers and hence the banker need not take any other precaution.  But just for your information dear RBI, CIBIL is heavily dependent on the PAN card and Aadhar card data, whose penetration is hardly only 30% to 40% in our country of nearly 1.3 billion population.  We can give you live examples of people who are defaulters in various banks and yet their CIBIL score comes out to be -1.  And the worst part; there are thugs who just take a loan from a bank, rotate the money, and then close the account before the due date - thus increasing their CIBIL scores to rocketing levels; but in reality they are nothing but thugs after all, who do no productive work or add anything to the GDP of the country except doing the work of inflating the already inflated prices by rotation of public money.  For the poor common banker, these thugs are HNI customers at prima facie inspection!

In case of agriculture, you tell that up to Rs. 1 lac loan and for MSME, up to Rs. 10 lac, no collateral security needs to be obtained.  We are sorry to say but we are working really really hard to save our entire life savings in your banks and what you are telling banks is to just distribute our money like "prasad" at a temple?  What if the borrower avails multiple finance from various banks using the CIBIL loopholes to his advantage? Rs. 10 lacs from 10 banks can amount to Rs. 1 Crore if I am correct in my primary school mathematics.

So, again back to our point Oh Great RBI - please show - and not guide- the aam banker how to lend by issuing clear-cut guidelines on appraisal techniques and if required tell your officers, who are nothing less than Knights in Shining Armours for the poor bankers, to sanction a few loans themselves by actually signing the sanction letter and shoulder some responsibility themselves also - if not for anything, then just for the adrenaline rush that you receive during the various sleepless nights when you think - "Did I just give a loan to a wrong person?"

Just for a change - A Caustic Ethmos to all!

The paradox of a hypothetical country - Mr. Nobody's perspective

Hello All!  I am back again with my idiosyncrasies again - after a long gap of more than 1 month.  Sorry for the same but to tell the truth, I just slept and rested for all these days.  So, before I begin my next round of Nobodisms, here is my disclaimer:-  The views expressed herein are of Nobody and they do not resemble or intend to resemble any quark, boson, electron, proton, neutron, atom, molecule, compound, human, non-human, living, non-living, taluka, district, state, country, continent, or anything within the confines of this universe and beyond it (this includes what lies beyond the black holes too)...whew....I hope I covered more or less anything to indemnify myself with any future attacks or litigations!  So here goes:-

Today I wanted to discuss about the paradox of a hypothetical society living in an hypothetical country.  A society that is plagued with corruption - not only at the government level but much much deeper; at the basic society level.  Better to explain with examples:-

You would have already heard this; but just for the sake of repetition.  The society follows a system wherein the doer of any economic activity stands to gain more had his activity produce the exact opposite results as it is expected to deliver.  For example, a doctor treats you to make you well but if you get well soon, how will he make his living.  A lawyer wants you to take out of any legal issue but if the legal issue is solved fast, then how will the lawyer get his fees perpetually with every new hearing the case is postponed for.  A banker lends you money with the expectation that you will repay the same within the prescribed time limit only - neither before (because it will lead to loss of interest for him) nor after (because then he will be left with no further money to lend).  A politician when in power wants to do maximum development or at least give an impression that he is working for the development so that he is retained in power in the coming elections but then if everything is developed and hunky dory, where are the avenues to eat money through illegal means!  A policeman's duty is to make sure the society remains crime-free, but then if the same is achieved, then where are the green avenues to make money by manipulation of cases for the highest bidder!  A teacher is bound to teach each and every student is in his/her class regardless of any discrimination but still what s/he does is to open his/her private tuition classes and concentrate only on his/her "personal customers."

In short, the root cause of these problems is the underlying fact that in all the cases, the incentive of "not doing the work/duty" is more than that of "doing" and the worst part is that there is more incentive in just "showing or acting" that you are doing your work/duty but actually and in fact doing the exact opposite.  For example, a cop showing that he is busy investigating a complaint that you have filed but in fact, he may be eating money from the accused himself so as to find new ways and means to get him out of the legal muck.  If he is an honest cop, he will only eat money from one side but there are very few good men left nowadays and generally the cops will eat from both ways, i.e. from the accused and the victims.

But the paradox is not just present in the public (government) systems alone.  This paradox is just the tip of the iceberg and it is actually the manifestation of the deep-rooted hypocrisy that runs in the blood of our Bharatiya society.  Everybody want their children to grow up as responsible, truth-speaking, law-abiding citizens but more or less everyone behaves exactly the opposite.  They don't mind over-speeding on the roads with their family in their vehicles, spitting and littering on the roads in front of their children, telling their children to lie on their behalf whenever anybody calls from the office, blatantly lying to others and fooling them and afterwards boasting the same in front of their wives and of course, children also.  Doing the theft of their legally payable taxes by various means and measures (which we have already discussed in our previous topics) and telling others that the government officials are corrupt!

And the baap of all paradoxes - our icon of justice - a blindfolded lady with a weighing scale in one hand and a sword in the other hand - actually it should symbolize that justice is blind and is done without any partiality.  But in practicality for all means, what actually happens is that justice is actually deaf and dumb and only sees what is there in front of it in the form of documentary proofs and witnesses and nothing and absolutely nothing else.  That is to say, if you are cheated by someone and the cheater did not give you a written proof of this cheating exploits, you have practically no way of getting justice in our great Bharat!

The problems are pathetic and the solutions are more so, but still we will try our best to find something for our junta.

Till then, Happy Ethmos to all!

Are the transfer policies of Bharatiya banks killing them slowly - An Ethmotican analysis

The nationalization of banks was a master stroke of a decision by the then Indira Gandhi government to gain a near-complete control of the Bharatiya economy.  However, had some loopholes remained and unfortunately still remain in the policy formulations of all the banks, but especially in the smaller banks (like the Associate banks of State Bank of India) which are concentrated more in particular states rather than having a homogeneous pan-Bharat presence.

We have accounts in many banks since the past many years and what is  interesting to note is the constant but frequent change of familiar faces that we encounter in the branches.  The same happens more in case of managerial staff than the clerical staff.  We hardly remember seeing any officer for more than 2 years at the maximum working in a particular branch.  Unfortunately it takes around 6 months for him/her to just know us as well as many other good as well as bad customers of his bank and then suddenly out of nowhere, he is shunted out to some other location on Google maps.  While interacting with many bankers, government officials, and studying some literature regarding the various policies of the government and the bank managements, we have been able to find out that there are very few (if at all any present) guidelines or policies set regarding the transfer of officials in the banks of Bharat.

Now why are we concerned with the banker's transfers?  Simple - We want to hand over our hard-earned money and articles in the safe custody of a familiar face rather than ever-changing face and moods - sometimes the officials are very good, charming and co-operative while at many times, we get officials who are not even willing to offer a small helping hand to a confused customer or worst, don't even know the local language to communicate with us!  Strange to note  what are these poor guys doing in an "alien" place like that.  Many seasoned bankers equate their jobs and the necessity of frequent transfers (their alibi is that transfers prevent an official from developing personal and financial interests in a particular area thus reducing corruption...he he he) to that of the defence forces and the high-level civil servants who are subjected to transfers.  But there are some basic differences between the transfer of bank officials and other department officials (as mentioned above):- (a)  Defence officials hardly need to take any financial decisions based on the documents presented in front of them, majority of which will be in the local vernacular language (b) in case of high-level civil servants like the All India Services, they are allotted a State Cadre in which they will be serving for at the least, 10 years, and they have an army of subordinate officials who can even provide them a verbatim translation of the vernacular documents.  Our banker on whom we are interacting and trusting do not have any such heavenly pleasures to enjoy himself or give it to us - hence, s/he is totally dependent on his/her knowledge and "gut instinct" at many a times if we are not mistaken!

Now tell us - is our money safe in such hands???  How do we ensure that our money is being lent prudently by this banker who does not know much about the local culture, geography, language, or the people?  How do we ensure that our money and articles kept in the bank are not subjected to any undue risks by the acts of ignorance unknowingly committed by an "outside" official?  Please do not get us wrong but what we are bringing out is a valid point and is important for safeguarding both our personal savings and wealth as well as the job of the poor official himself/herself.

So then what is the solution?

An official departmental transfer policy (not just banks but for all departments which are subjected to "outside/external" transfers) by the Bharat Sarkar should be brought forward and implemented in all departments.  Here we took the example of a bank because bank is the most frequently visited government institution by all the public; and bankers are the most frequently interacted government officials by the public.  But this policy is the need of the hour for all the departments since just having official language is not enough while handling decision-making exercises for various administrative and financial purposes - what is required is a deep and thorough understanding of the local culture, politics, and geography (physical and political).

Now the big question is - how to decide who will serve the "good" postings, "the not-so-good postings", "the difficult postings", and "the hard area postings."  Let us just define these terms:-

Class I - Good postings - Any posting which is demanded by the official or is near to his/her hometown or place of choice or which is having work load proportionate to staff and timing requirements and which does not make him/her slog extra hours to complete the same amount of work.  Generally these are city postings in metro, Tier I and Tier II cities.

Class II - The not-so-good postings: - These are generally in Tier III or semi-urban or rural centers but which are a little bit far (say in the range of 100 km) from the place of choice of the official.  The other criteria will be same as the "Good postings."

Class III - Difficult postings:-  These are the postings deliberately given to officials either in order to harass him/her or just because there is no better scapegoat left to accept that assignment in the department.  These are generally out of home state or if within the state, then are very far (more than 200 kms) from the place of choice of the official.  The staff strength will be very less compared to the quantum of work load and the official will have to slog it out for long hours even after regular working hours.  But there will not be much problem in the sustenance front, i.e. the personnel will be getting most of the basic amenities including proper housing, water, electricity, etc. and would be in a position to keep his/her family along with him/her.

Class IV - The hard-area postings:-  These are more or less similar to the "difficult postings" but the only difference is that the hard areas will not have even the basic amenities for sustenance of the official and his/her family thus leading to the official leading a singular and lonely life leaving very far away from home and the same goes for his/her family who will have to bear without him/her for a prolonged period of time.

Now after defining these postings, here are some of our suggestions for implementation of the government transfer policies:-

1.  First of all we would like to give our objection to the policy of giving choice posting to only women employees and leaving out the male staff totally forgetting the fact that the wife, mother, and sister of a male staff is indeed a woman only and she also requires the same level of support from her family as a working women, in fact more so.  Hence transfer policy should be as per the needs of the organization and has to be made totally, completely, and unconditionally gender neutral so as to make the government an equal opportunity employer in the true sense of the words.
2.  Generally the location of the government offices, especially banks, is such that the concentration is more in rural and semi-urban areas and lesser in cities just for the simple fact that there are far lesser cities than talukas or villages in our country.  Hence, serving at talukas and rural places cannot be avoided by any government servant.  The only thing that needs to be taken care is the selection of employees in the vacancies at various places.
3.  In positions at taluka and rural places which come under class III and IV, the employees should be given a special non-city compensatory allowance on the lines of the difficult area allowances given to defence staff, etc. so that a handsome incentive is given for working and living in such places.  Investment should be made to open good quality government quarters, schools, hospitals, and club houses (for recreational purpose) for all government staff and their families so that they have at least an option to keep their families with them.
4.  Postings to class I and II areas should be totally based on the choice given by the personnel who have already served the class III and IV postings, which should naturally be on a rotation basis (everybody should serve more or less the equal amount of class III and IV postings so as to remove any discontent among staff regarding postings and transfers).  Only after a personnel has completed at least one class III/IV posting, should s/he be considered for a second class I/II posting.
5.  Where there are less vacancies and more personnel opting for a particular place (say if there are only 3 vacancies in Mumbai and there are 15 personnel who have applied for those vacancies), then given other things equal like the caliber of the personnel for the post, the skill-level required for handling of the post, etc., the selection of the personnel should be done based on a draw of lots in front of them only so that the only thing left for the personnel to blame is his/her own luck and nothing else.  If there are huge number of personnel applying for a particular posting, then better to shortlist candidates through some online test specifically tailor-made for that post and select the meritorious ones.

All these steps will go a long way in enhancing the retention of personnel in the government departments (especially the banks) which are facing huge attrition levels primarily because of posting and transfer policies which are presently marred by total corruption, redtapism, and "butter your seniors" policy.

Are you listening our beloved PM and FM??

Anyways, Happy Ethmos to all

THE ABC MODEL OF BANKING – A REVOLUTIONARY BANKING MODEL FOR BHARAT AND DEVELOPING COUNTRIES

After celebrating our 4month anniversary, we are back again with another weird and radical idea, which is again a culmination of hours of not just brainstorming but “brain-tsunami/hurricaning/earthquaking” sessions.  But before you proceed, we strongly recommend you to kindly check our articles on the EconomicCost Concept and The Mobile Money Machine in order to get a better appreciation of this our economic-blitzkrieg idea.

Before beginning this article, we wish to clarify that the model of banking that we are proposing is in no way a match for the concept of The Mobile Money Machine that we have proposed and if the mobile money concept is implemented, then all this circus of banking, finance, and the general economy at large will undergo a monstrous positive change for the good.  But till then, this ABC model of banking can serve as a good alternative and act as a bridge to ultimately go towards a totally "no-cash economy."

The Automated Teller Machines or the ATMs as we all know them today came into existence way back in the 1969 and were first introduced by the Barclays Bank in order to bring down operating costs and easy banking for its customers.  All other banks aped the same and bingo – now virtually every bank, even the “Who-Knows-What Co-operative Bank” is also flaunting its ATM!  ATMs do provide ease of transaction, ready availability of cash for public, and even help in transferring money and other ancillary functions like cheque book order, etc. and anything you can dream of except doing a brain surgery!

Then slowly the ATMs became compact and were metamorphosed into the Point of Sale (PoS) machine.  Yes, this is the same small cuboidal hand-held device that you see at your favorite supermarket (say Big Bazaar or Max) wherein you flaunt your ATM card instead of cash and the cahier swipes your card on device and gives you a slip to sign (Strange that the wordings are “I agree to pay as per the user agreement” while the matter of fact is that the money has already been plucked out of your bank account!).  But then why are we giving our readers a sermon on such a silly thing like ATM that even a child will be knowing about?  Because we believe that the ATMs are the best money-wasting equipments in our country as well as the entire world and that it needs to be eradicated as soon as possible!  Now before you take a Bofors gun and blow our heads, please listen to our rationale and explanation for the same.

ATMs require huge resources – Yes my dears!  To maintain an ATM is no joke for the poor banker.  The ATM is like a King who needs to be treated with the utmost respect by the banker, who keeps him in a chamber with at least two air conditioners which are self-timed to operate for 12 hours each.  Furthermore, the ATMs have be literally “fed” cash at least twice a week or if it is a gluttony ATM which vomits cash very frequently (i.e. where withdrawals are very high like the ones situated near railway stations or bus stands), then the same needs to be loaded may be every day with cash.  And our King is not content with any type of cash – the quality of notes have to be very good.  If by any unfortunate chance the banker could not arrange for freshly printed currency notes, then s/he has to manually “hand pick” the good “ATM-ready” notes (a tough process called note sorting) and “feed” into the ATM.  The processing of arranging ATM-ready notes itself is a very cost and time consuming process.  Just leaving the complex cost accountancy and coming straight to the point – the average cost of just the maintenance of an ATM is around Rs. 50,000/- or more per month for any bank.  Now there are nearly 1.80 lac ATMs in our country.  So please consider the economic cost for the ATMs per annum, i.e. Rs. 50,000/- X 12 months X 1.80 lacs = Rs. 10,800 Crores per annum.  Whopping figure right!  But then many argue that the income generation from ATMs covers up this cost.  But from where is this income coming?  It is from you and me – say if we take cash from any ATM other than our own bank, around Rs. 15/- will be extra debited from our account as service charge.  Plus, in order to profitably run an ATM, it needs at least 170 to 180 withdrawals on a daily basis, which is not very feasible in a semi-urban or rural area set up.

Anyways, going into the details about the pros and cons of ATM and the general banking operations cost is not our point.  Now coming to our point – What we want to tell is that when there are other cheaper alternatives for not only withdrawal of money but also general banking operations for the masses, why keep feeding a white elephant known as ATM or for that matter, any cash deposit machine (which are the reverse of ATMs where in you can deposit cash).

What is the alternative to ATM, CDM, and the time-consuming general banking operations???

My dear friends, we want to introduce you to the revolutionary idea of THE ABC MODEL OF BANKING

ABC stands for Aadhar and Banking Correspondent banking:-  We know that you may be thinking “Oh ****!   Now what’s this new crap these idiots have brought up??”  So here goes your vindication:-

For the layman readers, let us just inform that recently RBI has notified that similar to the mobile number portability concept, there should be bank account number portability concept, which means that one should be permitted to switch accounts from one bank to other by keeping the same account number.  For this the RBI has instructed all banks to create a unique identification number for every individual who has an account with the bank so that a common database of customers can be created for portability purpose to be implemented later on.  Now what we propose is – why to waste huge resources and time on creating and cleaning multiple databases when we already have a good database of people in our country in the form of the UID or the Aadhar card?  Why not use the Aadhar card number as the unique identification number for bank account portability purpose? 

How will this change the banking as we know today?  It will change everything of a bank that we know today.  When mobile SIM cards were introduced in the country, the telecom companies found a very unique way of distributing the same and increasing their network – the kirana stores or the general stores.  Slowly and steadily medical stores, electrical stroes, paan waalas and person-selling-whatever started taking franchise from these telecom companies and sourcing applications for them, thereby earning some decent side-income as well as giving a vital service in the form of mobile connectivity for our Bharat.  Presently you can purchase a SIM card by giving your KYC documents at any of these stores and get your connection activated within a week at maximum – no need to speak to Sunil Mittal or Anil Ambani to get an Airtel or Reliance connection!  We have taken the liberty of borrowing this concept and applying it to banking and generated the idea of ABC – Aadhar and Banking Correspondent.

What is a banking correspondent?  The concept of banking correspondents or BCs as they are called in banking parlance is not new to our Bharat.  Ask any person in a rural or semi-urban setup and he will tell you what a BC is.  BC acts as an agent for the bank similar to agents for insurance business.  They are provided with handheld devices and ID cards by the banks and are authorized to act on behalf of the bank under certain controlled conditions like opening of accounts, recovery purpose, collection of deposits, delivery of ATM cards, etc.  They are not permanent employees of the bank but work on a contract basis and are paid as per the work done or business generated depending on bank to bank.  For those who want a little trivia – The BCs were very active in the opening of more than 17 crore bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) in a record span of hardly 3 to 4 months, thus covering a huge chunk of population under the financial services umbrella, which is why they are now able to get their subsidies and government grants directly into their bank accounts without greasing much palms in between!

Connecting the Dots:-  By now, you may have got an idea what we are going to propose.  Akalmand ke liye ishara kaafi hai…….anyways, for the less akalmand, here is the ABC Model for you:-

1. Give the BC agency to shops and establishments who have good dealings in cash.  For example, any properly running supermarket will have cash of around Rs. 50,000/- at any point of time during the day.  This agency will be similar to the ones given by telecom firms to agents for procuring business.
2. Functionality of instant account opening on hand-held devices – THIS TECHNOLOGY ALREADY EXISTS and it just needs to be scaled up in proportion to cover the entire length and breadth of Bharat.  Give these devices to our BC agents in every nook and corner of the country.  No need to go to any bank for opening an account.  There should be functionality of choosing the bank and branch for the customer so that a customer can open account with any bank of his/her choice from the agent nearest to his house.
3. Want to open an account – go to the nearest agent with your Aadhar card.  The device should be installed with the technology to recognize the biometric details on the Aadhar card.  Once the details are validated, a one-time password (OTP) should be sent to the registered mobile number (mobile number given on the Aadhar card) of the customer and after the customer enters the OTP, the account should be opened in a bank and branch of his/her choice.
4. HOW IS ATM AND BRANCH BANKING ELIMINATED?  As we mentioned earlier, any BC agent who is taking the agency should be having good cash transactions with him/her on a daily basis so that s/he can handle the cash inflow and outflow on a day-to-day basis.  Say if you want to withdraw Rs. 5,000/- from your account – NO NEED FOR AN ATM – just take your Aadhar card with you, put your fingerprint for biometric scan with the hand-held device of your nearest supermarket/kirana store BC, and once the details are validated, the BC will pay you Rs. 5,000/-.  Similar procedure for depositing cash also can be done but in deposit of cash,     biometric verification is not mandatory since anybody can deposit a cash on another person’s behalf – just s/he needs to carry the person’s Aadhar card with him/her for account number validation.  The same procedure can be extended to all sort of branch operations like ATM request, cheque book request, INB kit request, transfer of funds from one account to other, NEFT/RTGS, etc.
5. IF EVERYTHING IS DONE BY BCs, WHAT WILL THE BANKERS DO?? An excellent question – Even though you implement the ABC model, the banker will have the following works

a.       Collection and deposit of cash from the BCs in their area of operation or BCs attached with a specific branch and depositing the same in safe custody.

b.      Internal audit and controlling of BCs to remove any malpractices.

c.       Clearing operations.

But this is not what you are paying the Banker to do – You are actually paying the banker to safe guard your money and to generate income from your money by prudently lending your money to credit-worthy entities who can pay interest on your money.  So, now the banker will be a little bit of a free man to look after and manage your money properly and will be better able to handle some of the defaulters who have eaten away your money and are not willing to poop it out. 

The following are some of immediate benefits of this ABC model as we visualize today:-
1.  Huge reduction in operating costs to all banks.
2.  Banks need not kill each other for deposit mobilization and all.  In fact, customer service will have new definitions after the introduction of this model and banks will be more rated based on their prudent lending decisions rather than their ability to butter up the customer and get his/her hard-earned money.
3.  Huge reduction in the NPA portfolio of banks and improvement in asset quality.
4.  Nearly paper-less banking and hence no need to maintain huge space to store the "kabaad" generated out of day-to-day banking operations.
5.  Even passbook updation functionality can be provided with passbook printing machines installed at BC kiosks.

The possibilities, permutations & combinations of the ABC model are innumerable and only time will tell that how this genius of an idea from a worthy Ethmotican has changed the world.

Happy Ethmos to you