Ashima Goyal

PSUs take customers for granted

Ashima Goyal | Updated on August 10, 2011

Poor systems lead to unnecessary harassment. And there are many good people trapped in poor systems

The current wave of scams is only tightening the emphasis on processes and inspections, when what is required is to energise those who work in the public sector.

A public sector bank recently offered a prime illustration of regrettable lack of service. It affirmed that systems and processes in the public sector are not thought through precisely because the customer's convenience is not put at the centre of the exercise. And poor systems lead to unnecessary harassment.


The bank suddenly decided to implement KYC norms the regulator had mandated a long time ago. Customers got a letter threatening dire action, such as freezing or closing accounts that were not KYC-compliant. It asked for proof of residence and proof of identity, giving two weeks to complete the formalities. The bank has crores of customers.

The letter somehow forgot to mention that you were required to refill the account opening form. So the only result of a first trip was getting the form.

Sending someone with the documents and the filled form did not work because it turned out the account holder had to sign in front of the clerk. Again, the letter did not mention this. So, a third trip followed.

The milling crowds were left to find out from each other what they were supposed to do. After standing in a queue you found out that you had to take a token. After sitting and waiting patiently for your number to be called, you figured out that you had to be standing in the queue when it was your turn, else the next token number would be taken up. Then the clerk wanted the original phone bill as well as the copy — again, this had not been clarified earlier. A fourth trip followed. At last the clerk could check whether the numbers on the photocopied bill matched those in the original, and he finally knew his customer.

By now this was the last day. Many of those waiting with tokens had no chance of completing formalities. I wonder if their accounts were frozen. Such empty threats only serve to shatter any remaining credibility or fear of authority.

People are much more aware of their rights and of what is good service. The harried clerks also remained polite even as they carried out the meaningless procedures they had been instructed to follow. Complaints echoed down the line—of the waste of time, of precious holidays spent in queues, of power brokers making merry in such situations, of having to fill multiple forms for multiple accounts instead of centralising information and removing wasteful duplication.


The bank could get away after inflicting this sheer waste of time and energy on its customers probably because many of the accounts were PPF accounts where it had a monopoly. One lady who wanted to close her account was told you cannot close a PPF account before 14 years. The government exacts a heavy hidden price for any favours it does for you. But the bank probably lost many customers with this episode. How can a bank treat customers with 20 year old PPF accounts like unknown terrorists?

Private banks know their customers because their agents would have contacted them many times to sell something or the other. Forms are detailed and thorough, but the agents come to your house and fill it for you.

Public sector workers, however, lose all initiative since they follow poorly-thought-through orders to the T— while their judgment atrophies. A major factor holding back the Indian economy is poor delivery of public services. The current wave of scams is only tightening the emphasis on processes and inspections, when what is required is to energise those who work in the public sector. There are many good people trapped in poor systems.


These are big problems, but sometimes there is a simple key to seemingly intractable problems. New York in the nineties was in the grip of a severe crime wave and urban decay. The police managed a remarkable turnaround using what came to be known as a ‘no broken windows' strategy. Just removing the signs of urban decay led to the establishment of a healthy civic life.

If the public sector no longer tolerates any ‘broken windows' or dissatisfied customers, systems could be redesigned to focus on serving the customer. Brain-storming throughout the organisation would revive pride in work. It is that clerk on the shop-floor who sees the difficulties the customer faces.

No matter where you are in the hierarchy, your performance must be evaluated on the basis of how satisfied the public is with what you did; not on the basis of how many procedures you followed, however faithfully.

India's public servants evolved from being rulers and controllers to the distributors of rationed goods. The next step is becoming providers of citizen rights. With complementary changes such as competition in public service provision and removal of discretionary powers to allocate resources, mindsets can change. Power corrupts, but service ennobles.

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Published on July 14, 2011
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