Today RBI restricted Yes Bank, one of the Bell Weather banks, clients to withdraw only Rs 50,000. This made me think why I did not choose such banks for my use. I was all for customer centric banking right from the beginning when I started my first account in the then so called New Age Bank ICICI. I am one of the first 500 customers to the bank and then gradually made myself to HDFC where I continue my main banking transactions. I never felt these banks could collapse though once I came close to getting wrong when all the women bankers who were touted as the next gen leaders of India — and who led almost all the banks in India — came collapsing down starting with ICICI MD.
The very fact that I opted for a new age bank then (in 1993 I presume) was the shoddy treatment I got from PSU banks who considered their clients as slaves. Clients like me were at their mercy for any banking transactions. Despite having a central government job then, the difficulties I went through getting a bank loan for buying a house was nothing short of a full fledged harassment by today’s standards. But then we were used to it. To get a bank loan or to get a BSNL Landline connection, you had no option but to be a slave of the institution where you are applying. My loan was sanctioned but after a few months I was told by the new bank managers who replaced the one who sanctioned my loan to pay back Rs 3000 (Yes, Rs three thousand) as the amount given to me overstepped the discretion of the manager and there was an audit objection to it. In those days this amount was tough to gather in the time frame I was given. But I did repay before the deadline.
Why do banks fail? In all the cases it is the greed that makes it happen. But the banking jargons term it as Risk Factor. No due diligence is shown nor any background check is done to issue billions to a corporate entity who can grease their way out. Yes Bank was no exception. Lack of accountability is the key reason that NPAs of banks keep on mounting. My only thought to this was why Yes Bank continued its operation despite clear indication that it was going to meet the same fate as few banks in the recent past.
