The young Probationary Officer (PO) had just started working in the bank, after successful completion of his long training program. He was finally out of a rigorous training schedule and felt relieved that he is no longer dependent on others for his life's needs. He was now secure in his job and the monthly pay packet will take care of his financial requirements. Time had finally come to enjoy the pleasures of life, he thought. The first salary received was only for part of a month as he joined the branch on first posting in the middle of the month. The second salary was better as it was for a full month. A regular monthly credit in his account now onwards will be a routine thing. There will be increments awarded every year. There would be some salary increase once in five or six years as well. If he is able to secure a promotion, the emoluments will go up further. The very thought of these coming events was indeed thrilling.
The Branch Manager called him to his cabin in the morning and told him to check the records of a transaction put through in a customer's account a week ago. The customer had complained that he had requested for a transfer of 2,000 Rupees to an account in another bank, but his account was debited with 200,000 Rupees. He wanted immediate return of the difference wrongly debited to his account. When the application for transfer was called for verification, it was found that it was indeed a request for transfer of 2,000 Rupees. Customers have the practice of writing the amounts in cheques and applications in different manners. Some write the amount of Two Thousand Rupees as 2,000/-. Some others just write 2,000. This customer had written it as 2000.00. The last two zeros were actually meant to be paise. But the dot placed between the rupee amount and the paise was very pale and almost invisible. This was more so when viewed during the rush hours at the bank. The transaction was put through at 200,000 Rupees and hence the dispute. The amount written in the application in words clearly said it was Two Thousand Rupees only. The dot placed between the rupee and paise in figures was there when viewed carefully. The customer was right and he had to be compensated.
Banks use a system called Maker-Checker concept in all transactions. In fact, this is extended to all other aspects of bank's working. Any action is initiated by an authorised person and completed by verification and approval by another authorised person. The one initiating the transaction is the "Maker". The one verifying and approving finally is the "Checker". The transaction is complete and recorded in the bank's computer systems only when it is approved and authorised by the Checker. It has no value in the intermediate period; after the maker's input but before authorisation by the checker. The checker can return the transaction to the maker if he is not satisfied with the action or if there is some inaccuracy. The final authority and responsibility for the transaction rests with the checker.
In any organisation, most of the work is carried out by persons at different levels based on the basic confidence reposed in their subordinates. Each person knows whether the subordinate is diligent and can be depended upon. This is more so in respect of routine matters and small transactions at banks. A 200,000 rupee transaction is a small transaction in most of the big branches whereas it is a big transaction in a rural branch. A bunch of transactions are scrutinised and authorised by a functionary in quick time during rush hours. Probably this was one such case. Experienced bankers have seen many such events in their career. Excess payments in cash also happen sometimes. Good customers promptly return the excess money. Some do not return or become untraceable thereafter for various reasons. Tough situations indeed, but most of the time bankers manage to wriggle out of them by prompt action and some good luck to supplement.
The next logical action in the instant case now was to contact the bank branch at the receiving end and seek refund of the excess amount remitted. It turned out to be that the receiver's account had never seen such a large sum of money in its life time. The customer had withdrawn the entire amount on the very day of receipt of remittance. The bank reported that the customer was now not traceable and there were no hopes of recovering the excess amount paid. The remitting bank took the help of its own branch in the receiving station and all efforts were futile. An amount of Rs. 1,98,000 was lost by the bank.
The process of disciplinary proceedings was set in motion as per the rules and practices of the bank. Disciplinary Authority found that the young officer was negligent in his work and was responsible for the loss. The amount was ordered to be recovered from him with an interest rate equal to the cost of funds for the bank. The order stated that the amount may be recovered in 60 instalments, with interest.
The young officer was now in deep trouble. He forgot the dates of annual increments. His chances of quick promotion had also evaporated as he was found negligent in the initial days of his work and caused loss to the bank. He was now not even thinking of wage revision. Forget increase in emoluments, he was drawing less than all his batchmates by some 4,000 rupees every month. A small error had resulted in a big setback to his career itself.
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- Though excess remittance have been made, the amounts involved are actually due to the recipients.
- It is a case of early payments of loan as interpreted by the recipients refusing to return surplus funds.
- Complex issues of lending and recovery of the original acquisition of another company, Elizabeth Arden, by Revlon are involved. There is also an issue of collaterals in the form of Intellectual Property rights.
- There are many other contractual rights and duties of the various parties involved and there can be many solutions to the case, though they may not be acceptable to all concerned parties.
- It is premature to discuss various other aspects of the case as the last word has not yet been recorded on it.
- As one of the the advertisements says, "Jaldi Karo, Jaldbazi Nahin". Do not delay customer service issues but no short cuts to be employed.
- Basic confidence in subordinates is required, but one cannot escape the fundamental responsibility of his level.
- Additional diligence is required when the lower level official (the maker) is either new to the job or passing through stress in his personal or official life.
- One should be more careful during peak work days and days following long holidays.
- There are many happenings around us in the work environment that disturb our attention. But concentrate on the tasks on hand.
- Use extra caution during rush hours and when there is undue pressure to clear a transaction or issue.
- Develop the habit of reaching work place a little early as late going puts extra pressure in work situations.
- Pressure to dispose of transactions or issues may be genuine or otherwise. One should learn to distinguish between the two.
- Extra care to be taken while handling abnormal and large value transactions. Experience teaches how to handle such situations.
- Have a trustworthy Mentor to approach when the needs arise.
- Update skills and knowledge regularly. An outdated knowledge level and deficiency in skills makes a banker a lame duck.
- Changes made in the computer software and systems are to be taken note of without fail.
- Laziness and lethargy never pays. Hard work and diligence do protect us, especially in difficult times
- One cannot be afraid of every situation. We cannot runaway from the battle field.
