Banks and technology woes

(August 29, Colombo, Sri Lanka Gaurdian) A letter by a ‘Harassed Customer’ in an English daily of August 20 has revealed the imprudent attitude of some banks towards their customers. According to the letter the banks seem to act without any concern for customer aspirations, needs and wishes. The reply given by a bank to any customer inquiry relating to an omission or any such problem faced by a customer would be that the document is computer generated and they are unable to provide an explanation.

An inquiry was made from the staff at a branch of a state bank about a remark written on the face of a cheque. The cheque had the words "Non image friendly cheque" written across it. But the bank officers were unable to explain what it meant as the remark had been written at the central clearing office elsewhere.

The remark was unfamiliar not only to the account holder but also to bank officers. In respect of With Holding Tax (WHT) it is the duty of the banks to inform account holders the details of amounts debited or credited to any type of account maintained in a bank. Failure of banks to act in this manner will only reflect the imprudent attitude of the banks.

The lack of knowledge relating to computer technology in banks is not the concern of the customer. In current account statements the Debit Tax amount is indicated and similarly the WHT amount should be indicated in Savings Pass Books and fixed deposit interest payment advice notices. The state Savings Bank and the state as well as private banks are the main offenders in this respect.

Account holders have a right to know the amount of WHT recovered from the total interest due to them. It is a requirement of the Tax Department that WHT recovered from different accounts should be declared. But it is difficult to obtain these certificates from some banks, and customers need to make several trips to get these certificates which are necessary to complete the tax returns. To the elderly and feeble this is a tormenting experience.

A colleague of mine recently opened a fixed deposit account in a state bank and gave instructions to the bank in the mandate form, that in terms of his assessable income the WHT recovery should be 2.5% and not 10%. Yet, he had been charged 10%. This was however rectified after the relevant newspaper advertisement of the Sri Lanka Banks’ Association was produced.

If the WHT recovery is recorded in the customer’s Pass Books or bank statements the account holders could satisfy themselves of the accuracy of the amounts recovered. The banks for their convenience include the WHT declarations in the application form used for opening accounts. But if a separate form is obtained in duplicate from an account holder regarding WHT declarations and nomination declaration, the account holder could have a copy for his perusal.

In respect of nominations, the old practice was to give a copy to the account holder. Otherwise after the death of the account holder the relatives may not be aware of the submission of a nomination declaration and problems may arise as a result.

The Bank Supervision Department of the Central Bank should instruct all banks that the WHT should be recorded in the customer documents and a copy of the WHT and nomination declarations should be given to the account holder.

Currently most employees of banks are only concerned with the mechanical operation of computers than having an awareness of the law relating to banking and operational activities.
- Sri Lanka Guardian