Sounding Board. Which bank do they trust?

B Nandakumar, a project leader in a software company based in Chennai, prefers to keep his money in a public sector bank. “I have had good experiences with my bank all these years, and I am very comfortable transacting there,” says Nandakumar.

But hasn’t the slow servicing and lax attitude in branches irked him? “That may have been the case earlier. But now with public sector banks adopting technology to facilitate online transactions, it isn’t any different than transacting in a private bank,” he says.

Most of the activities, such as depositing cash or cheque or applying for a new cheque book, can be done through an ATM now without having to visit a branch, he claims.

What’s more, there aren’t any ugly surprises lurking in the corner. “Private banks charge hidden or additional charge for taking out demand draft or not meeting a minimum balance. Public sector banks are very transparent about what they charge,” he adds.

Is the poor performance of public sector banks and growing risk with bad loans worrying him?

“Public sector banks have more customers than the private ones. The trust factor is high, it is unlikely that anything can go awry with them.” he claims.

The interest rate on home loans or personal loans is nominal too, he adds. “My branch manager is very cooperative and guided me through every step in processing my first housing loan,” he recalls.

Prefer safety of PSBs

GD Sivam, a retired professor, lists safety of money and relationship with his banker as one of the main reasons for his choice. “I have read all about the recent concerns on public sector banks, but I am not worried. I bank with the largest bank in India. If it were to fail, I am confident that the government will come to its rescue,” he says. The poor service in public sector banks does not weigh down his choice. “If you ask me what matters most — safety or service — I would pick safety,” he adds.

He gets personalised service, thanks to the good relationship with his banker.

Differing views

Ramneek Chhabra, based out of Delhi, has also given the trendy private banks a go-by. Lower fees and transparency in charges have earned public sector banks her vote. “When we apply for a loan, processing fees are lower in a public sector bank,” she says.

“The interest rates they charge are transparent too” she adds. And there is so much more flexibility with a PSB. “If I decide to close the loan earlier and pay up the full amount, they don’t charge me any prepayment charges,” she adds.

And you don’t have to deal with annoying agents. “Private banks employ direct selling agents to sell their products,” she says. “The last time I went to a private bank branch, they tried to sell me an insurance policy in return for a locker facility. Why should I buy something I don’t need?” she asks.

She feels that money is safer in PSBs. “My deposits are secure. With government holding in these banks, there is little chance of them going belly up. Unless the government collapses!” she scoffs.

But her husband, Shailender Singh Chhabra, surprisingly shares a different point of view. He is not too impressed with the sloppy servicing that public sector banks offer. Vice President of a telecom-based company in Delhi, he prefers private banks as they offer more customised services and greater personal interaction. “Plus, there are perks for being a high net worth member. There are dedicated relationship managers who take care of all your banking needs and much more,” he adds.

“My relationship manager advises me on different investment options — mutual funds, insurance, etc., and even delivers cash at my doorstep if required,” he says.

Private banks give personal attention

SV Viswanathan, who runs a consultancy firm in Mumbai, started banking with a public sector bank and still has an account even after 45 years. “But over the years I have reduced my balance almost to nil, due to change of location and ease of operation,” he says.

He prefers private banks now because they give personal attention as he is a priority account holder. “I don’t have to go to the bank at all as they come home to collect cheques, etc. Everything is just a phone call away,” he replies.

In the case of PSBs, it takes between half-an- hour and even an hour for a small thing like pass book update. “I had seven occasions in a year when my cheques were dishonoured just because the bank did not know how to take care of a swift account. Money above a certain amount is transferred to a swift deposit where you get a higher rate than savings deposit,” he says.

The weak performance of PSBs did not sway his decision. “That the exposure to bad loans is very high in PSBs and they are in trouble is not a recent phenomenon” he recalls. He says his decision is more led by ease of transacting, additional goodies and better FD rates that private banks offer.

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