Velocity of Doing Business in India

Deccan Herald dated May 14, 2014 carries, at least on its Bangalore Edition, a thought provoking article by Shemin Joy titled “ LS polls: Why does this carnival take so long?” Why indeed? It is not as if one little unit of some police force has to travel to all constituencies one after another. Law and order is a state responsibility. Each state has its own police force. The Central Government has para-military units in all regions. What is so centralized - The Election Commission?

We cannot paralyze the Government for months in the name of a long election. All decision making comes to a halt. This time, we almost failed even to ensure that the retiring army chief would have a successor appointed in time. I believe that citizens should demand that the next nation-wide election should take no more than ten days. Economists should estimate the loss to this year’s GDP because the Government was paralyzed for so long.

I will touch upon two other examples that show how we suffer from inefficiency. The RBI had asked all credit card companies some time ago to ensure that customers used their PINs when carrying out transactions. In addition most credit companies have introduced chip-cards to improve security. Now, it is difficult to do credit card transactions anywhere in India without using the PIN. For months, most shops, petrol bunks, etc. have been wasting their staff time and customer’s time by collecting signatures on charge slips. Only one bank prints out charge slips saying “Signature Not Required”.  I don’t think they have any special exemption. They have used common sense to figure out that charge slip signatures are not properly scrutinized in any case. Using the PIN and a chip card to validate a transaction is a far sounder proposition. But most banks have “played safe” which is a game in which Indian companies excel. Who cares for peoples’ time and their productivity? I have grave doubts how thoroughly signatures on card slips are checked. Almost any scribble gets accepted! What use is it?

Lastly, a bank website wasted my time and their bank’s staff time today because of poor design of their webpage and transaction handling. I introduced a new beneficiary for a funds transfer a couple of days ago. It took 12 hours for this beneficiary to be “enabled”, for whatever it is worth. When I tried to do a funds transfer, I got a vague message like “Transaction not carried out. Contact bank branch”. I called the relationship manager and asked him. He asked me to try again after sometime. He also suggested I might try splitting the transaction and sending a smaller amount first. I tried this. His suggestions did not work. I went to the bank branch. The staff member who attended to my complaint made me log in on his PC and show him what happens. I did this. He asked another colleague of his. The colleague took some time to remember that for a new beneficiary there is a special limit to the amount that can be sent in the two days after he is registered. I had not seen any such limit mentioned. Instead of saying “Transaction not carried out. Contact bank branch”, why can’t their website tell me the rule about a special limit for the first two days? The colleague said that the warning must be somewhere, and searched for it going back and forth. Yes it was there in small print on the page which must have been presented to me when I registered the new beneficiary, in an innocuous form near the bottom of the page. I confess I had failed to notice the small print at that time, but in online transactions, one expects a well-designed transaction to warn you about limits you exceed as and when you do the transaction. How this bank manages with millions of customers I don’t know. Perhaps it is not a problem because other banks’ transaction design is no better!  In any case, they all use software only from two or three software vendors! A well-designed website seems to be no differentiator for the banks!

Before computerization, there was “work study” which examined how employees and customers carried out their tasks from the point of view of simplifying their work and increasing their productivity. Work study pointed out where waste of time occurred and where there was a need for improvement. Occasionally, we now hear about Information Technology (IT) Audit. I wonder if IT Audit honestly worries about the sufferings of the bank’s customers!

Srinivasan Ramani