April 24, 2007

 

In Defence of ICICI Bank

Apart from Cricket, bollywood and celebrity gossip, the favourite national pass time is cribbing about poor customer service by various new age private entities - financial institutions (which covers banking, insurance, credit card, home/car/personal loans, online stock trading, ... ), telecom, automotive companies, assorted service providers (broadband, no-frills airline, etc.) Thanks to internet and blogging, it has found new medium apart from regular chai-time conversations. ICICI Bank has been a favourite punching bag, just like ToI is bloggers. Not that I've received royal treatment from all of them, but I have a different take on this issue at a macro level. A pleasant surprise from ICICI bank last week, which is just one week after I came across Rashmi's rant against ICICI bank, made me write this post. So, in the long post, I'll be playing proverbial devil's advocate for private banks, ICICI in particular. Please note that I'm not a shill for the bank, neither do I hold any equities.

So, let me step back and narrate my limited experience with PSU bank during 2001-2003 when I was a student in UP. The banking hours are between 1000 to 1400 Hrs on weekdays and 1000 to 1200 Hrs on Saturday. While the folks were quite relaxed about opening time, they were amazingly particular about closing hours. The three babus - one to dispense token, second, to make a passbook entry and third, the cashier - used to run the show. For the mere mortals like us, they together formed the Trinity of Brahma, Vishnu and Mahesh. They would leisurely start working at 1030. At 1115, the Trinity will take a Somras (Chai) break and return after 20 minutes with Mahesh chewing paan. Brahma will do a real-time analysis of situation at 1330 and take a call if any more tokens should be issued. Their displeasure was quite evident if the unwanted entities (ie customers) were seen in bank after 1400.

The banking hours were carefully chosen to clash with the academic the schedule. So, if you need to withdraw money urgently, you either went late for the class or bunked it altogether. And what if you get the token, run for the class and come back? Would that be honoured still? Forget it. You are better off committing a harakiri as you will be given a stern lecture by pointing to an order written in bold which clearly stated that taking token with you outside bank was a sin for which only remedy was to take a dip at Bithoor. If a customer had a problem and used higher-than-normal pitch to communicate it, the other belivers wouldn't take that kindly. Prayer was the only way to communicate the problem to the Trinity. Getting new chequebook issued was no less than small a miracle and and called for samosas & chai for the wingmates.

If this story brings chuckle to your face, let me assure you, everything stated here is plain truth. Every single thing!

Within an year of graduation, I had opened an account with ICICI Bank in Pune with investing as the sole purpose. If one understands the complexity involved in buying and selling stocks, appreciating the beauty of this scheme (Bank+Demat Account+ Online trading) is not hard. They live up to the tag of "Hassle free investing" by expanding the horizons to Derivatives, IPO, Mutual Fund, Post office schemes, commodities, and lots of other instruments.

The same account became salary account when I switched the job and moved to Mumbai 2 years back. My account continues to be registered with branch in Pune. In last 3 years, total number of visits to a branch should come to a single digit number, twice to change my communication address, once to get ECS clearance and a few more visits for similar things where my presence was mandatory. With most of things available through their website, there is hardly any need to get a person involved. And bunch of phone calls for banking service were also not exactly unpleasant as universally presumed. Credit card and online banking have made bill payment, travel reservations extremely convenient.

They are the ones who started the mushrooming of ATMs everywhere which give you the liberty to travel anywhere without carrying a bagful of money. They provided with reasonably good internet banking which saved trips to nearest branch or ATM. Ability to operate an account from any branch across India is as easy as checking your e-mail account from a cybercafe. Well, almost. Instantaneous fund transfers across any other ICICI account is almost magical if you have gone through the ordeal of outstation cheques clearance, which take anywhere 2-4 weeks.

You can say that the experience with PSU bank has set my expectations so low that I am probably in for a surprise quite a few times. But, even on an absolute scale, it is quite great. I really don't care if I am asked to wait for 11 minutes to talk to the phone banking officer. I happily play Tetris during that period. At the maximum, they have taken 15 minutes to answer my queries. That cost me 15 minutes and Rs 15 on telephone charges. I'm content with that as the other option of wasting my 60 minutes, enduring the traffic hell is not so appealing. So, here is the bank, which understood the real power of technology and exploited it fully to make life simpler. (BTW, some banks do provide doorstep service for which minimum bank balance should be 5 Lacs or some such high amount.)

Surely, ICICI bank has been fairly aggressive in the product push. Sometimes, this in-your-face sales & marketing invades your personal space. But, with this aggression they raised the bar for themselves and rose phenomenally to Asia's Fabulous 50 Companies list compiled by Forbes in such a short span. This by no means is justification for the even occasional shoddy service. Growth and size do expose certain vulnerabilities, especially when the organization is dealing with millions customers on a daily basis. If one looks back to IT companies during 1998-2007, it's only a handful companies like Infosys, TCS, Wipro have successfully managed to handle the exponential growth while capitalizing on every single opportunity coming their way. ICICI is their counterpart in banking which shows similar traits. And if they become complacent about their position or take customers granted, well, then free markets don't like such inefficient giants - case in point, BSNL.

Let's not tolerate mediocrity, which is almost as pervasive as polluted air in India. But acknowledge the excellence where ever it is due. If you are grossly unsatisfied, then discontinue their service, burn your bank statements & credit card in front of nearest branch of the bank, and post the video on YouTube (Idea courtesy - a senior colleague.) That is the strongest statement you can make. It's your hard earned money, after all. But, just based on the fact that they made you wait for 9 minutes on phone, passing judgments like "ICICI is gonna implode" is downright silly. It is like looking at a 4 feet by 4 feet poster of Vidya Balan from a distance of 3 feet, and calling her ugly because her face has a tiny dark circle on the right side of nose. It is like mistaking local minima for global minima.

While 5 years before it was tyranny of PSU banks, lets not forget the MNC banks are waiting the in wings. 5 years down the line, when the foreign banks get a free hand to expand their business in India, they will lap as many private banks as possible or drive them out of business. Don't be surprised if your choices are an American bank vs an European bank. Then, with hindsight wisdom, we will be in a better position to make a statement about current private banks.

Finally, what drove me write this long post? I realized the loss my credit card almost a week after I used it last time. (The story of how I lost is too embarrassing for public consumption.) So, last Sunday morning I called up ICICI Bank to block my card and issue a new one. My request was duly noted. When I asked about turn around time to issue a new card, he replied, "7 days." The lawyer in me asked "7 days or 7 business days?" He assured me of 7 days and not 7 business days. Within 72 hours of my call, I had the shiny new card in my hand. I am delighted!

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4
Comments:
I do agree 100% with what you have said. I opened ICICI account in 1999 (18 Sep) after having not so pleasant experience with a public sector bank and then one co-operative bank. I never had any unpleasant experience, but may be the reason is... I have never applied for ICICI bank credit card or personal loan. :)
 
Fantastic post!
 
Shantanu,

I guess, the experience will not be any different if you go for load or credit card. Just that you need to be careful about the rules of the game like paying dues on time, etc.

RG,
Thanks.
 
Hi Shashikant, I just found out first hand how ICICI Bank's credit card fraud investigation is a sham. Blogged about it here: http://crashpodel.wordpress.com/2007/07/17/icici-banks-credit-card-fraud-investigation-is-a-sham/
 
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