What do you get when you cross mobile telephony with modern banking? Limitless possibilities for m-commerce and financial inclusion, right? Maybe. As of now, however, the result is serious harassment and abuse for many. Consider the case of Ashok Roy (name changed), a senior citizen from Kolkata.
About two and a half years ago, Mr Roy gets a call on his mobile phone from a leading Indian private bank, inquiring about a certain Sunil Sen (name changed), apparently a defaulter. Since Mr Roy had never heard of this person, he tells the bank that the latter is calling a wrong number. However, the call is repeated in a couple of weeks. Mr Roy explains that he has never heard of Mr Sen. The calls keep coming, once every fortnight or so, different numbers, different voices, at times using creative techniques, like addressing Mr Roy as ?uncle?.
Frustrated, Mr Roy complains at the local branch of the bank, where he also had a term deposit?his only other link to the bank. Thanks to modern banking methods and information technology, the bank manager has no clue about who is actually making these calls, but on Mr Roy?s insistence puts him in telephonic contact with someone who promises to ?look into the matter?. Nothing changes. Mr Roy closes his only account with the bank in disgust. He turns to his mobile service provider and they suggest a very practical solution?change the mobile number. Given the hassles involved and its obvious unfairness, he resists.
About six months back, the calls take a turn for the worse. Some of the calls have now changed from Bengali or English to a rustic Hindi with an unmistakably threatening tone. On occasions, a collection agency is vaguely mentioned, but never does the caller properly identify himself, except for, at times, giving the name of the bank. Exasperated and at his wits? end, Mr Roy lodges a complaint with the local police station. They call up the latest caller and order him to desist. Nothing changes. A second complaint and a second call from the police ensue. After that, the police politely suggest that Mr Roy follow the advice of his mobile operator.
If this was just an issue of m-abuse, that would have been deplorable enough, particularly coming from a major bank. But as is frequently the case with phone harassment, there is the unspoken threat of physical abuse. This is far from paranoia. There have been cases, including at least one reported in the media in Kolkata itself, where agents of the same bank traced someone from his mobile number and manhandled him before realising it was a case of mistaken identity.
We all realise the need for a stricter legal structure to protect creditors? rights so as to establish a ?credit culture? in the country, particularly given the glacial slowness of our judicial system. Over the last few years, SARFAESI and debt tribunals have strengthened banks to a considerable extent. The same judicial inefficiency however hurts the retail borrowers and assumed borrowers when a bank misbehaves. Among the stereotypes of the era of public sector banking was that of gentlemanly conduct from national financial institutions. One did not expect banks to hire goons to collect. As the old order changes, this too has to be guarded against.
Evidently, some of our leading private banks, having failed to displace the local moneylenders from their rural strongholds, have become their eager pupils. But it would do them some good if they could at least adopt their mentors? borrower identification techniques before mastering their strong-arm tactics?which, incidentally, would have been equally illegal if applied to the true defaulter. The police, given their own constraints, are far more focused on after-the-fact detection rather than prevention of offences of this nature. Consequently, with the economic slowdown and the upcoming law barring arrests for crimes that attract less than seven years? imprisonment (which certainly has its merits), the collection industry can now provide lucrative and low-risk employment opportunities to goons of all kinds. It is perhaps time we stress corporate civic responsibilities of our leading banks even before we emphasise their social responsibilities.
The New Year brought Mr Roy good wishes from the bank followed by the intimation of a substantial credit-card debt. Finally, running out of options, Mr Roy reluctantly used his contacts to get the top management of the bank and the RBI to intervene and the situation seems to have been remedied. Some networks are doubtless critical. Unfortunately, they are not the ones your mobile operator can provide.
The author teaches finance at the Indian School of Business, Hyderabad