A Digital Wake Up Call for Modi Government? And a Trade Dispute Risk?


Even a casual reader of this Blog would notice that we are fans of Prime Minister Narendra Modi & his dedication to getting India to its rightful place in the World. How much has he done for the distressed & needy majority in India was demonstrated in his stunning re-election victory in the May election.

We are happy with the new cabinet team he has assembled for his second term. The return of Ajit Doval as the National Security Adviser & the choice of S. Jaishankar as the foreign minister are good signs for continued Indian success on the world stage.

We are also happy with the selection of Ms. Nirmala Sitharaman (phonetically Seetha-Raaman) as Finance Minister. As we had written on September 9, 2017, “We have been very impressed with her intelligence, inner strength and her ability to articulate her positions.”

What makes Mr. Modi special & different from other Indian leaders is his focus on implementation. Others are more interested in making statements in public & then ignoring the need to deliver what they promised. Not Mr. Modi. He implements what he plans & delivers what he promises.

One of his big successes is the focus on providing transparent, online access to Indian institutions. Anyone who knows India knows the enormous frustration of having to visit an office, waiting in line & then being told to come again because of some small problem in the paperwork. That problem can only be solved via online access & services, and only if they enlist the help and support of places like Filecenter so they are able to access these physical documents digitally and online. In turn, this will prevent people from having to travel to an office to resolve their problems.

But that is also where the implementation has been faulty, faulty to the point of being both contemptuous & arrogant. And that has much to do with the mindset in India, a mindset that is creating serious problems for overseas-based Indians and for Indians traveling abroad.

Fixing this should be very simple for the new Finance Minister Sitharaman & her sprawling Finance Ministry bureaucracy. The question is why should they care? We will come that later.

But first a couple of simple examples that boggle our mind.


1. Customer Support Numbers

Look at the webpage of Canara Bank, a nationalized bank in India. Canara Bank does have a branch in New York. So you would assume a global mindset in Canara’s management. You would be sadly mistaken.

Canara Bank proudly displays its customer support number as 1800-425-0018. So Canara Bank, like almost all banks in India, now offers a toll free 800-number for customers. Great idea, right? Yes & no. Yes, if you are in India. No, if you live outside India or if you are a resident Indian traveling overseas. Because this 800 contact number can only be called from within India.

So what if you need to contact Canara Bank from outside India? You are out of luck. Because no other customer support number is provided as a back up to the 800-number. And this is a bank based in Bengaluru, the seat of India’s technology sector. Hundreds & even thousands of Indian technical experts from Bengaluru-based companies travel overseas on software assignments. So you would think Canara Bank would provide them a customer service number that can be called from outside India. You would be wrong.

How dumb & arrogant is this? It stems from a basic conviction that the bank is doing a favor to customers and the associated arrogance that customers can always visit their local branch if needed.

Remember Canara Bank is special, because they have a branch in New York on Park Avenue, very near the global headquarters of JPMorgan Chase Bank. So you might think you could contact the New York branch & get their help. If you did, you would get a polite sorry we can’t help you type of a response. If you press, you would get the name & the contact number of your local branch manager in India. That’s all.

Can’t Canara Bank learn from their US counterparts whom they imitate with their 800-number? Every US bank or financial institution we know provides at least two contact numbers on their site – 800-number for calls with USA and a regular number that can be called from abroad.

Why don’t Indian banks do something so simple? The answer is contempt & the old British-instilled arrogance of requiring customers to line up on the branch & being treated as if they don’t matter.

Canara Bank is one example. What we describe above is probably true of almost every Indian bank, institution & government office.

Why should the new Finance Minister Sitharaman care? We will come to that.

2. Two-Factor authentication or OTP code

Thankfully, Indian banks & government entities like electric & phone utilities now use a two-factor authentification system, mostly via a one-time-password (OTP) sent to the registered mobile phone. Great idea, right? Yes & No. Yes & great if you happen to be in India, ideally where you could also go physically to your branch or the government office. No & terrible if you live outside India or you are working on a project outside India or simply when you are traveling abroad. And you are completely out of luck if you happen to live outside India.

Take our favorite Canara bank, for example. Their system will ONLY send OTPs to an Indian cell phone that, very likely, doesn’t work abroad. So what if you are overseas & you cannot log in? Tough. You are out of luck. Because your only choice is to call Canara’s customer service number. But wait, you cannot because the only customer service number they provide is the 800-number that cannot be called from outside India.

This is not as funny or trivial as it may sound. What if there is a problem with the electricity bill or phone bill of your Indian apartment? What if you are trying to pay such bills or trying to resolve a problem with your bill payment? That can be a crisis because the electric company can be very quick to shut off electricity. So the ONLY real solution for you is to FLY to India to physically solve the problem. Can you even comprehend this state of affairs?

All because the 800-number of the bank doesn’t work outside India & the OTP from the electric company & the bank can’t be received on your overseas mobile or in your email.

Some banks help you by sending the OTP to your email instead of your Indian mobile. Some banks don’t, like our favorite Canara Bank for example. Because their basic fall back position is to ask you to physically visit your local branch in India. Yes, they ask you to visit your local branch in India even when they know you live in New York. The fact that Canara has a New York branch is irrelevant for them & for you.

In contrast, during an online login, JPMorgan Chase asks you to choose how you prefer to receive the OTP – on your cell phone as a text, on your landline as a call or on your email.

Why don’t Indian banks & entities do something so simple? Mainly because they simply don’t give a hoot.

Why should the new Finance Minister Sitharaman care? We will come to that.

3. Documentation – HDFC vs. Citibank India

Forget Canara Bank & other nationalized Indian banks. Let us turn to India’s finest & mostly highly regarded private sector bank, HDFC Bank. And let us compare it to an American bank that has had a somewhat spotty record in customer service, Citibank.

Indian banks & entities demand huge amounts of physical paper from their customers. Who knows what they do with all the paper they collect? Because when you ask for a copy of something you sent them earlier, they tell you they are unable to get it for you because, you see, they collect so much.

So what do you do when your bank tells you they need something from you in paper form when you are trying to close a transaction or get money from your own account?

HDFC will most likely tell you to physically mail the forms to the branch in India (that can take 15 business days) or send it via an expensive courier in 3-4 business days. Yes, they have a P.O. Box in US but that takes even more time because you mail the paperwork to this P O box; they ship it to Mumbai where it gets sorted & then forwarded to your local branch.

It doesn’t matter that you might be a customer with HDFC for over 10 years and that your branch account manager knows you personally for over 10 years. You still have to send the paper work in physical form. They will not, as far as we know, accept scanned documents you can send via your registered email for transactions like withdrawing your monies.

In stark contrast, Citibank India will allow you to LOAD your paperwork via a scanned PDF into your account at Citibank India, a process that can take just a few minutes. How simple, how modern & how helpful?

So why can’t HDFC, India’s premier private bank, copy Citibank India & help their customers? Do we need to repeat ourselves about the typical Indian establishment’s contempt for ordinary Indian customers?

So, the big question –

4. Why should the new Finance Minister Sitharaman care?

India is now becoming an important power in the world. It is already the fastest growing economy and India will very soon become the fourth largest economy in the world. This is not the poor & destitute India of 30-40 years ago whose weird business behavior was tolerated as a joke.

The world is rapidly scaling up its expectations from India to be a responsible power with basic modern services to both Indians & foreigners. And the best ambassador for India in this era of increasing expectations is the Indian Diaspora.

We remember the enormity of love & respect showered on PM Modi during his trip to America in 2014 & during his reception at Madison Square Garden in New York. The Indian Diaspora in America has been a huge supporter of PM Modi and has supported India in the US Congress.

But there has been an erosion in the commitment to India from this community. People are getting fed up with the headaches of trying to work with Indian banks & other entities. Mr. Modi remains popular but working with India not so much. The very rich & corporate CEO tier of the Indian Diaspora is still treated well by the Indian bureaucracy but the average Indian-American is not.

Also as years pass, a younger generation of the Indian Diaspora is coming up. They don’t have the same deep feeling about India that their parents do. Their frustration with Indian practices is very high. All this is beginning to add up and India, even Modi’s India, doesn’t seem to recognize it.

What that means for new FM Sitharaman is that Indians in America will start demanding that America, especially the Trump Administration, pressure India to make Indian business entities to provide same services to US customers as they do to Indian customers. Unequal treatment & unequal hurdles are legal issues in America & Indian banks/businesses need to be sensitive to that.

Also Indian-Americans could soon demand that US banks like JPMorgan Chase & brokerage firms like Charles Schwab & Fidelity be allowed to operate in India. Why should the Indian Diaspora in America be forced to suffer abuse from Indian banks & Brokerages like Canara Bank & HDFC?

Take HDFC for example. This premier Indian bank raised $1.8 billion recently from American investors. Yet, this bank continues to treat American citizens of Indian origin with unduly bureaucratic & difficult requirements. So is it fair to ask that HDFC treat the Indian Diaspora in America similar to & pari passu with how Citibank does? Is it also fair to ask that Citibank, Chase, Schwab, Fidelity be allowed to bank, trade, invest for the Indian Diaspora & in India for Indians?

How quickly could this become a trade issue between the Trump Administration & the Modi Government? And with whom would the Indian-American community side?

This is a different environment for new FM Sitharaman than it was 10 years ago. She needs to be aware and get Indian banks, institutions up to standards of US institutions. At least she should take immediate steps to provide the same level of services like customer contact numbers & OTPs via US sell phones and/or email that can make life easier for Indian-Americans.

The big question is whether the new Finance Minister Sitharaman understands the urgency & the risk and whether she works with the new Foreign Minister Jaishankar to make life just a little bit easier by solving simple problems like the ones we describe above.


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