Senior citizens can prevent harassment

According to Sumith de Silva (The Island, Opinion Page of 7.3.2022), senior citizens who have placed their savings in fixed deposits in the banks are in for a new harassment, because the banks are planning to withdraw their usual automatic renewal facility. I am yet to see any official announcement on this. However, if the news is true, the fixed deposit holders, particularly the senior citizens, must think of some way to prevent such arbitrary action.

We remember how recently a strong protest by the state pensioners, thwarted an action taken by a stupid bureaucrat to compulsorily deduct contributions to an insurance scheme.

On the renewal of fixed deposits, the deposit holders are in a stronger position to prevent unjust treatment. Please see my proposal below. However, we are at a loss to see what advantage the banks may gain by doing this. On the contrary, the staff may find additional work for themselves, when dealing with several forms filled and handed over by each depositor at the renewal point. I can imagine the problems they may face, for instance, when discrepancies between the information in the original form and the new forms appear.

If this ‘brilliant idea’ of getting the depositors to visit the bank concerned to renew FDs every time, originated in banks, they should be ready to take the consequences. But if the idea came from the government side (more likely) it may only end up as another useless ‘Jump Before You Think’ blunders of the present rulers. The main purpose of writing this letter is to suggest to the affected depositors, a practical method of showing their displeasure of this idiotic scheme.

The action they should take is as follows: If you are the holder of the FD and you are asked by the bank concerned to visit the bank to renew the FD, you should tell them that you wish to withdraw the entire deposit and place it in a different bank. Banks usually do not like to lose their customers. You may tell your bank that you move out your money as a mark of protest against its action to withdraw the automatic renewal facility. If you are a client of a state bank, you may tell your bank that you propose to open a new deposit in a reputed private bank; If you are already a client of a private bank, you may choose another reputed private bank. Some of the private banks are more efficient and customer friendly than the large state banks. These banks sometimes offer certain benefits as promotion measures to new customers, and may even show you how to avoid a renewal visit every year. Since you are making this change after the original deposit has matured, the loss in interest caused by the change will be insignificant.

Moving your money from one bank to another is not a sin. In fact, it may also help you to improve your interest earnings and other benefits. This is a legitimate strategy adopted by managers of large investment funds. However, small investors should be careful to avoid fraudulent financial institutions, and those not approved by the Government, and other informal deposit takers (Sakvithi type) which may offer high rates of interest temporarily, and then rob you of your capital.

My thinking is that if most fixed deposit holders adopt the above strategy, the banks will be forced to reconsider their short-sighted policy of harassing small-time fixed deposit holders.

S A K