While everyone knows that it is a bit of a scam rather than banking that is practiced in SA,I am just going to keep this post as a sort of notes for myself. So here goes.
Banks in SA make phenomenal profits, way more than banks in a similarly developing economy like say India. Why? Fundamentally they are all more like deposit taking institutes than anything else.Customers are charged fees for everything, including depositing money in their own accounts (i hear it is starting in India also), ATM fees, Debit order fees, Fees for basically everything. So who needs loans? And it is no surprise that since there is no priority sector lending necessitated by law, most of the loans go to the govt and hence are safe. So end result - profits all the way with very little bad debts! Downside- Since lending is done more to the govt than public, investment suffers and so does the economic growth. I am still to understand how does Bankserv decides fees. It is weird.
In a country like SA, where a vast majority cant afford to take loans to start a small business,another vast majority cant open a bank account only! imagine that! They just cant afford to keep money in the banks coz of the insane fees! The Mzansi accounts launched years ago are a failure with a majority today sitting as dormant accounts (I am going to dig this aspect later to understand more).
A fundamental reason for this situation is the lack of competition. There are only 16 or so banks in SA! thats all! And a good 70%+ is dominated by merely the big 4 banks! what do u expect in such a state! The org, which maintains national payment system and clearing etc is owned by the banks and not surprisingly, the big 4 rule it. Is it a surprise that org. like WIZZIT (funded by world Bank partially with a 10% stake), piggy back on other bank's license? Sooner or later this has to change. There is no denying that. The inefficiency in the banking system is far too excessive to prevent competition from entering.
A quick word also on the foreign holdings. Barclays has majority stake in ABSA and there is another one of big 4 which has foreign holding, I cant recall which one. Standard Chartered seems to be hunting for Nedbank, but lets see. Standard was once one of South Africa's biggest lenders but sold its stake in Standard Bank in 1987 amid opposition to Apartheid. It returned in 2003 by opening a branch and buying an online bank but had to write off that investment. It also considered buying Absa in 2004 but opted out of a bidding war with Barclays. Barclays meanwhile owned FNB earlier.So it is quite interesting at the moment. Also, ABSA and Barclays are now merging their African business I hear. So lets see.
I will keep updating this post as my notes. Till next time..
Wednesday, July 14, 2010
Saturday, June 19, 2010
Doing business with tier 3, tier 4 banks..
While working with smaller banks, what amazes me is how long they will continue to cope up with the ever increasing expenditure on regulatory compliance, product and channel support, over head costs, IT expenditure and God knows what else. The fact of the matter is the way banking industry is evolving, two things are certainly happening:
1) H1: Banking is increasingly becoming more and more sophisticated. This means you can’t expect average people to do every possible job in banks. More and more jobs are going to become sophisticated with time. With this, banks will need more and more high tech IT systems to support the running of business. All this points to only one thing – investment per dollar earned is only going to increase in the future (unless there are significant economies of scale and scope).
2) H2: Credit crisis dealt a big blow to the banking industry. Politicians world over are under severe pressure to not only bring the world economy back on its feet but also ensure such a thing never happens again. This clearly means that we can expect more and more political interference in this industry in the long run (it is obviously happening at the moment).
In a sense, the above two are counter balancing. Point 2 will try to curb innovation to some extent which will slow down the accelerated sophistication which has become second nature in banking industry.
To validate my hypothesis 1, I expected increasing difficulties for smaller banks and decided to check with some hard facts. Here is what I found.
The number of banks in the US which had assets less than $100million, have come down significantly. This is no surprise. With increasing overhead expenditures, the smaller banks don’t have the wherewithal to match the bigger banks in terms of a) money spent on research to launch new and relevant products b) the economies of scale which justify increasing overheads for only the bigger banks c) hiring the right talent for specific roles which can only be justified if such roles generate enough revenue.
Let us look at the picture from another angle. A few months back, Celent published a report titled “It Takes More Than a Village: The Decline of the Community Bank”. It clearly stated that banks with assets under $100 million are bleeding deposits. Here is a quick peek:
Clearly smaller banks no longer have enough deposits! The report notes: “Running a bank requires a certain amount of scale, and that floor is rising due to increasing regulatory requirements, channel support, and product support”.
Now, let us try to link all of this with what happened and is continuing even now with respect to credit crisis. On both sides of the Atlantic we have people shouting “these banks are too big to fail”. A part of the reality is brought out by the figure one above. Number of banks with large assets has actually increased. Naturally, in the process, some banks have become too big to fail.
The tendency towards becoming bigger is not only driven by increasing costs but by a number of different synergies which all ultimately combine to give higher profits. A study done by Federal Reserve Bank of St Louis confirms this. For a selected set of banks, a study on profits shows these results for PAT/ Total Assets:
1) H1: Banking is increasingly becoming more and more sophisticated. This means you can’t expect average people to do every possible job in banks. More and more jobs are going to become sophisticated with time. With this, banks will need more and more high tech IT systems to support the running of business. All this points to only one thing – investment per dollar earned is only going to increase in the future (unless there are significant economies of scale and scope).
2) H2: Credit crisis dealt a big blow to the banking industry. Politicians world over are under severe pressure to not only bring the world economy back on its feet but also ensure such a thing never happens again. This clearly means that we can expect more and more political interference in this industry in the long run (it is obviously happening at the moment).
In a sense, the above two are counter balancing. Point 2 will try to curb innovation to some extent which will slow down the accelerated sophistication which has become second nature in banking industry.
To validate my hypothesis 1, I expected increasing difficulties for smaller banks and decided to check with some hard facts. Here is what I found.
The number of banks in the US which had assets less than $100million, have come down significantly. This is no surprise. With increasing overhead expenditures, the smaller banks don’t have the wherewithal to match the bigger banks in terms of a) money spent on research to launch new and relevant products b) the economies of scale which justify increasing overheads for only the bigger banks c) hiring the right talent for specific roles which can only be justified if such roles generate enough revenue.
Let us look at the picture from another angle. A few months back, Celent published a report titled “It Takes More Than a Village: The Decline of the Community Bank”. It clearly stated that banks with assets under $100 million are bleeding deposits. Here is a quick peek:
Clearly smaller banks no longer have enough deposits! The report notes: “Running a bank requires a certain amount of scale, and that floor is rising due to increasing regulatory requirements, channel support, and product support”.
Now, let us try to link all of this with what happened and is continuing even now with respect to credit crisis. On both sides of the Atlantic we have people shouting “these banks are too big to fail”. A part of the reality is brought out by the figure one above. Number of banks with large assets has actually increased. Naturally, in the process, some banks have become too big to fail.
The tendency towards becoming bigger is not only driven by increasing costs but by a number of different synergies which all ultimately combine to give higher profits. A study done by Federal Reserve Bank of St Louis confirms this. For a selected set of banks, a study on profits shows these results for PAT/ Total Assets:
Clearly, banks having lesser assets struggle to be profitable.
Having established hypothesis 1, let us focus on hypothesis 2. In their quest for increasing profitability, some banks have outgrown themselves and thus have become a source of systemic risk. This thought now is echoing across the world. Political ramifications are obviously going to be far reaching.
When the crisis first broke, UK took the lead in saving banks by nationalizing them. US followed. Now, UK has taken the lead in breaking up these big banks - Royal Bank of Scotland, Lloyds Banking Group and Northern Rock. Whether US follows or not, remains to be seen.
Having established the nexus amongst size, profitability, risk and politics, let us ponder over the resulting impact of the two hypotheses stated in the beginning.
While H1 pushes the banks towards bigger size, H2 seems to be pushing at the moment towards smaller size. Let us hope the necessary equilibrium is found soon enough. The fact that we can’t really have big-sized banks is obvious – the implicit government backing of such organizations (because they are too big to fail), allows these banks to get capital at more favorable terms, which isn’t fair or competitive. Therefore, there is reason to believe that US also will at least try to cut some banks to size. There is a slim chance of a variant of Glass-Steagall Act being passed as well.
Conclusion
For smaller banks to be continually viable, they need to focus on the segments of the financial services industry where they have comparative advantage. These segments involve personalized service and lending based on information not available to other firms in the financial services industry, because they derive the information through their relationships with their customers.
The operational overheads can be handled with some innovative thinking. E.g., sharing ATMs with a bigger banks gives the required reach without actually rolling out themselves. Hiring the right people and making the right IT investments remain the key for such banks. Only if they do all of this can they survive. Of course, with the increasing political support, there could be additional help in the form of supportive legislations. However, it seems likely at the moment that banks having balance sheet of less than 100 million USD will continue to struggle for survival. Banks with the intermediate size will continue to consolidate and will move towards better profitability. Having said that, let us remember that the biggest bank, by assets, Bank of America started as a small bank (Bank of Italy) meant to help Italians settled in California.
As far as the bigger banks are concerned, in some cases the economies of scale are outweighed by the difficulties in controlling risk inside them. There will continue to be pressure on such banks in the future. We can reasonably expect some more banks to sell parts of their business in the foreseeable future. However, the profitability concerns will keep this drive limited. We have already seen a glimpse of this. For instance, if you look at the list of banks getting TARP money, many are not even in trouble. Some have already made ”arranged marriages,” such as PNC which quickly acquired National City Bank with some of the TARP money.
All of the above bodes well for IT industry. The increasing sophistication in the industry only means that need for better and newer systems will remain. Splitting of banks into smaller businesses will bring its own set of IT needs. Finally, the opposing and balancing act of becoming bigger would mean continuing work in terms of integration of systems.
References
1) “The future of Small Banks” by Alton Gilbert, Federal Reserve Bank of St. Louis.
2) http://smallbiztrends.com/2009/02/death-small-community-bank.html.
Sunday, June 13, 2010
Euro Crisis
While in the last post I was determined to write about colonialism and its after effects starting with Kenya, I thought I will take a break and write down first I make out of Euro Crisis (Just finished reading a carnegie endowment report on this). Here is a quick summary of what I understood.
In GIIPS, the new Euro currency increased confidence, lowered interest driving demand up. People and govt. went up hill borrowing tons of money. After averaging inflation levels and public borrowing costs from 1980 to 1990 that are comparable to those of Ghana today, the GIIPS (excluding Greece1) saw their inflation and interest rates converge with those of the EUN (Europe North) during the 1990s. Long-term government bond yield spreads of the GIIPS vis-à-vis the EUN, which indicate the perceived risk of lending to the GIIPS instead of the EUN, fell from 550 basis points in 1980–1990 to just 10 in 1999. However, in GIIPS, more money went into construction etc. than in trade sector. Wages shot up eroding productivity more. Meanwhile, stable economies like Germany got Euro which was cheaper than Mark making their exports more competitive. These economies could fulfill the needs of GIIPS whose competitiveness had deteriorated but the demand was surging. The single European monetary policy was too loose for the rapidly growing GIIPS (Spain, Greece, and Ireland) and too tight for Germany, whose domestic demand and wages grew very slowly compared to the European average. This reinforced the loss of competitiveness in the GIIPS. Without control over interest rates, Greece, Spain, and Ireland were limited in their ability to deal with the bubbles, while Italy and Portugal, both fighting slowing economic growth, would have benefited from looser monetary policy.
The financial crisis in 2008 brought an abrupt end to the post-euro growth model in the GIIPS. As they plunged into recession and tax revenues collapsed, government spending was revealed to be unsustainable and their loss of competitiveness dimmed hopes of turning to foreign demand for recovery. The GIIPS are left with high public and private debts and weak long-term growth prospects, unless they make difficult adjustments to cut deficits and restore competitiveness.
Till next time..
In GIIPS, the new Euro currency increased confidence, lowered interest driving demand up. People and govt. went up hill borrowing tons of money. After averaging inflation levels and public borrowing costs from 1980 to 1990 that are comparable to those of Ghana today, the GIIPS (excluding Greece1) saw their inflation and interest rates converge with those of the EUN (Europe North) during the 1990s. Long-term government bond yield spreads of the GIIPS vis-à-vis the EUN, which indicate the perceived risk of lending to the GIIPS instead of the EUN, fell from 550 basis points in 1980–1990 to just 10 in 1999. However, in GIIPS, more money went into construction etc. than in trade sector. Wages shot up eroding productivity more. Meanwhile, stable economies like Germany got Euro which was cheaper than Mark making their exports more competitive. These economies could fulfill the needs of GIIPS whose competitiveness had deteriorated but the demand was surging. The single European monetary policy was too loose for the rapidly growing GIIPS (Spain, Greece, and Ireland) and too tight for Germany, whose domestic demand and wages grew very slowly compared to the European average. This reinforced the loss of competitiveness in the GIIPS. Without control over interest rates, Greece, Spain, and Ireland were limited in their ability to deal with the bubbles, while Italy and Portugal, both fighting slowing economic growth, would have benefited from looser monetary policy.
The financial crisis in 2008 brought an abrupt end to the post-euro growth model in the GIIPS. As they plunged into recession and tax revenues collapsed, government spending was revealed to be unsustainable and their loss of competitiveness dimmed hopes of turning to foreign demand for recovery. The GIIPS are left with high public and private debts and weak long-term growth prospects, unless they make difficult adjustments to cut deficits and restore competitiveness.
Till next time..
Sunday, June 6, 2010
After a long while..
Its been over a year now since I last wrote something. It has been a long year where personally it hasnt been going that great. There have been many sleepless nights and so on so forth.I have also noticed in this time that a lot of people (some I like, some I despise) blog very diligently. I have no such desire.I belong when it helps me to collect my thoughts. If someone doesnt like something that I say, please move on. As I try to write this,I wonder where should I begin. I have no clue. But I will start with something that these days keeps my mind engaged and helps me focus on something. It is about the interconnected nature of different events that happen in the world. Lets first focus on what the west especially England has done in the past to the world because of which various countries are still paying the price. India, Pakistan, Afghanistan, Israel, Kenya, South Africa and the list goes on. All these countries have paid a huge price for what the West unleashed on them. I am not endorsing what the fundamentalists are doing to retaliate but I just feel that there is something more that we need to understand, to analyze. I thought about where to start analyzing. The first thought obviously was India, where the partition left scars that are yet to heal. But I have ultimately decided to start with Kenya. Primarily because I am in Africa (South Africa to be precise) and I also happen to be reading a book on Kenya at the moment. The idea will be to trace what the West did to further its own selfish interests and how today a lot of people think that non-Western countries are their own enemies. Personally, this is also meant to be some sort of a diary where I would keep all my thoughts collected on the World and its past.
Onwards then.
Onwards then.
Tuesday, May 19, 2009
Was Indira Gandhi partially responsible for Rajiv Gandhi's assassination?
This post has a connection to the previous post where I was trying to find patterns in history. The way US intruded in Iraq and Afghanistan and ended up creating Al-Qaeda. Lets look closer home.
LTTE was funded by Indian govt ,in the initial days at least, coz of the alleged pro-Pakistani posture that the Sri Lankan Govt had adopted. Who was leading India at that point of time? Indira Gandhi. So India did the same perennial mistake which somehow seems to be at the bottom of all major terrorism issues in the world today: Governments shud not interfere in the affairs of other countries esp by funding any organization that is armed! You do that and you have a virtual guarantee, it will backfire. Ask US. Ask Pakistan. And now I say, ask India.
LTTE then went on to assassinate Rajiv Gandhi. What would have happened if India had opposed LTTE all along? We dont know. But wouldn't it be fair to say then that a part of the blame for Rajiv Gandhi's death lies on Indira Gandhi? I at least cnt think of it in any other way.
But the problem with all of us is: We just dnt learn from our mistakes in the past! We just steadfastly refuse to do so.
LTTE was funded by Indian govt ,in the initial days at least, coz of the alleged pro-Pakistani posture that the Sri Lankan Govt had adopted. Who was leading India at that point of time? Indira Gandhi. So India did the same perennial mistake which somehow seems to be at the bottom of all major terrorism issues in the world today: Governments shud not interfere in the affairs of other countries esp by funding any organization that is armed! You do that and you have a virtual guarantee, it will backfire. Ask US. Ask Pakistan. And now I say, ask India.
LTTE then went on to assassinate Rajiv Gandhi. What would have happened if India had opposed LTTE all along? We dont know. But wouldn't it be fair to say then that a part of the blame for Rajiv Gandhi's death lies on Indira Gandhi? I at least cnt think of it in any other way.
But the problem with all of us is: We just dnt learn from our mistakes in the past! We just steadfastly refuse to do so.
Saturday, May 2, 2009
US gonna do it all over again...
First...whenever I am jobless, I conjure up a few stupid thoughts and then I see which one of them makes some sense...and then if I am still jobless, I sometimes write them up here if I dnt get to bore someone in person...So here goes another such thought...
I am worried abt the way things are going on in Pakistan. Someone might say why should I be when President Obama is taking such an interest? anyway who the hell am I? More to the point, isnt the job being done by the most competent people i.e. Obama ad his entourage? My take: Since they are looking into it, that makes me worried. Why? You just need to look into the history and u would know. They tried to set things right in Iraq and we saw what happened and is still happening. They ventured into Afghanistan ages ago against the Soviets and ended up creating the biggest menace we have ever seen. Isnt Al-Qaida US's own doing? Isnt US its own devil? And now they are trying to take a similar interest in Pakistan. In fact they already have been doing it for a while. They supported Musharaff. They fought Muslims just across the border of Pakistan from Pakistan. What would it have done? Naturally, it would have pissed the locals. Why? One, the locals are also Muslims! And religion has always played a profound role wherever we see. Second, wouldnt u expect two set of people to have some kinda connection when they live so close even though they are separated by national boundaries? Esp when you are talking abt Pak-Afghan border? Obviously, they thought US was interfering again! In Afghanistan, God knows what do people really think of US! They have been there perenially! With tribal borders and frequent movement of people, the same feeling would exist in Pakistan also. So there! US has got the right ingredients and mixture ready once again!
And now. Taliban have become active in Pakistan. Is that a surprise???? Noway! It was coming all this while! Just like in older Afghanistan, you had American army or parts of it in Pakistan. Guns, ammunition etc etc again pouring in. Will the thought of using second hand guns stop the people from venting their anger against the nosey US? of course not..! So the people react the same way once again. Once again US gives people a reason to hate them, gets its army there and follows it up with ammunition. Then they wait for it all to explode while acting as the perfect catalyst! Phew...
Where are we headed? We do know problem in Afghanistan could nt be solved. And theres good reason to believe then that the problem in Pakistan wouldnt also be solved! So we are in it for long! Say good bye to that notion of flimsy democracy in Pakistan! At least in the near future!
I am worried abt the way things are going on in Pakistan. Someone might say why should I be when President Obama is taking such an interest? anyway who the hell am I? More to the point, isnt the job being done by the most competent people i.e. Obama ad his entourage? My take: Since they are looking into it, that makes me worried. Why? You just need to look into the history and u would know. They tried to set things right in Iraq and we saw what happened and is still happening. They ventured into Afghanistan ages ago against the Soviets and ended up creating the biggest menace we have ever seen. Isnt Al-Qaida US's own doing? Isnt US its own devil? And now they are trying to take a similar interest in Pakistan. In fact they already have been doing it for a while. They supported Musharaff. They fought Muslims just across the border of Pakistan from Pakistan. What would it have done? Naturally, it would have pissed the locals. Why? One, the locals are also Muslims! And religion has always played a profound role wherever we see. Second, wouldnt u expect two set of people to have some kinda connection when they live so close even though they are separated by national boundaries? Esp when you are talking abt Pak-Afghan border? Obviously, they thought US was interfering again! In Afghanistan, God knows what do people really think of US! They have been there perenially! With tribal borders and frequent movement of people, the same feeling would exist in Pakistan also. So there! US has got the right ingredients and mixture ready once again!
And now. Taliban have become active in Pakistan. Is that a surprise???? Noway! It was coming all this while! Just like in older Afghanistan, you had American army or parts of it in Pakistan. Guns, ammunition etc etc again pouring in. Will the thought of using second hand guns stop the people from venting their anger against the nosey US? of course not..! So the people react the same way once again. Once again US gives people a reason to hate them, gets its army there and follows it up with ammunition. Then they wait for it all to explode while acting as the perfect catalyst! Phew...
Where are we headed? We do know problem in Afghanistan could nt be solved. And theres good reason to believe then that the problem in Pakistan wouldnt also be solved! So we are in it for long! Say good bye to that notion of flimsy democracy in Pakistan! At least in the near future!
Sunday, April 12, 2009
Reliance Net Connect!
I know a senior manager in a company who rallied against ICICI insurence coz after his wife had delivered the baby, they got to know none of the expenses are covered in the insurance although such promises were made while signing the policy. ICICI dint pay and subsequently ICICI employee insurance was cancelled in that company. Such incidents can be infuriating and I can really understand. Coz something similar (not as big as ICICI fiasco though) happened with me as well.
It all started when during internship I needed to check mails and therefore went to Reliance outlet to get a Net connect card. They asked me where I lived and I told them I was in Mumbai for 2 months for internship and hence needed the card. The grand officer refused connection flatly and I wasnt amused. He explained that I needed to be a resident of that area if I wanted the card. Well, if I was living there, why in the world would I carry a wireless card that gives a measly speed! why not take a broadband instead? The whole idea of having a wireless card was to help ppl who travel arnd a lot and if I cnt buy such a card in India (and I was giving my passport as the proof), where should I go buy one? To Pakistan? But that guy dint give up. I was told I could get a letter from a local saying I am staying with him and then they will give me a card. Ok, so I got a local friend to write one such letter and marched again to Reliance outlet. Quite ridiculously, they went on to refuse again! This time saying, I have to take the card not in my name but in my friend's name! Then why the hell did they ask me to get that damned letter! I was pissed. Finally, my friend was kind enuf to take that card in his name and as a proud Indian I took the card (there was no other such dealership nearby,so reliance seemed an easy option earlier!). I used the card for those 2 months, came back to the campus to finish my degree.
Last week, having come back home after convocation, I again needed internet connection and I had the card this time. I just needed a recharge. So again I was off to the nearest Reliance outlet. And not surprisingly, I was told I cnt get a recharge on that old number? Why? Coz its old. Huh? Ok, so what next? We will give you a new number and u pay a lil extra. Ok, I have no choice. So gimme one. And this time since I was local, I could give my own papers!! I was thrilled that I am finally eligible to buy such an esteemed connection in my own name. anyway, I gave the papers and was told there wud be a guy coming down for verification of address and all that. I had no problems of course. Very next day, some guy came and confirmed that I indeed lived there and that my passport wasnt fake finally. I got a call on my cell and another one on the landline. Convinced finally that I was indeed the person I claimed to be, my connection was turned on. But then how can you possibly forget that its Reliance Netconnect after all. The very next day, while I was sending an email about some joining formalities to my employer, I realised my connection has been cancelled. Confused, I called the helpline. And guess what! It turns out theres a problem with my verification. Phew! They met me in that very address, I have lived there for 11 years, they called me on both the numbers I had given, my connection worked for one full day after that and now you are telling me that I am not what I claim to be! Honestly, if Reliance was asked to take care of our borders, I am quite sure, they will succeed in keeping out not only those Bangladehis and Pakistanis but also some of the Indians! They are just so Goddamned good! Pissed, I called the dealer I had taken the card from. He is also surprised! Now what should my reaction be! super surprised? anyway, he promises to find out the problem. The next morning I check again and I see that suddenly the connection is working. Now I dnt know whether to be happy or sad coz u never know when they will cut the connection again saying I am not the person I say I am. Its been a week now and so far so good. But knowing that its Relaince NetConnect, I wouldnt be surprised if one day they call me and say I am a suspected Taliban leader!
Its just absurd the way some companies work. I understand you gotta ensure that in a post paid connectio the company doesnt lose money but does it mean u will stop giving connections to ppl who are in a city for a few months? Why not have sm initial deposit instead? Do you really think someone will buy a dongle worth 2700 and then not pay a bill of what 300 bucks??? Knowing fully well that he cnt use that card for any other company again! And why would you cut the connection after all the verifications! Its senseless. I just dnt know what to call them!
I dnt think Reliance NetConnect ppl can change the dumb way they work. But I do hope not many companies in India would follow their policies!!
It all started when during internship I needed to check mails and therefore went to Reliance outlet to get a Net connect card. They asked me where I lived and I told them I was in Mumbai for 2 months for internship and hence needed the card. The grand officer refused connection flatly and I wasnt amused. He explained that I needed to be a resident of that area if I wanted the card. Well, if I was living there, why in the world would I carry a wireless card that gives a measly speed! why not take a broadband instead? The whole idea of having a wireless card was to help ppl who travel arnd a lot and if I cnt buy such a card in India (and I was giving my passport as the proof), where should I go buy one? To Pakistan? But that guy dint give up. I was told I could get a letter from a local saying I am staying with him and then they will give me a card. Ok, so I got a local friend to write one such letter and marched again to Reliance outlet. Quite ridiculously, they went on to refuse again! This time saying, I have to take the card not in my name but in my friend's name! Then why the hell did they ask me to get that damned letter! I was pissed. Finally, my friend was kind enuf to take that card in his name and as a proud Indian I took the card (there was no other such dealership nearby,so reliance seemed an easy option earlier!). I used the card for those 2 months, came back to the campus to finish my degree.
Last week, having come back home after convocation, I again needed internet connection and I had the card this time. I just needed a recharge. So again I was off to the nearest Reliance outlet. And not surprisingly, I was told I cnt get a recharge on that old number? Why? Coz its old. Huh? Ok, so what next? We will give you a new number and u pay a lil extra. Ok, I have no choice. So gimme one. And this time since I was local, I could give my own papers!! I was thrilled that I am finally eligible to buy such an esteemed connection in my own name. anyway, I gave the papers and was told there wud be a guy coming down for verification of address and all that. I had no problems of course. Very next day, some guy came and confirmed that I indeed lived there and that my passport wasnt fake finally. I got a call on my cell and another one on the landline. Convinced finally that I was indeed the person I claimed to be, my connection was turned on. But then how can you possibly forget that its Reliance Netconnect after all. The very next day, while I was sending an email about some joining formalities to my employer, I realised my connection has been cancelled. Confused, I called the helpline. And guess what! It turns out theres a problem with my verification. Phew! They met me in that very address, I have lived there for 11 years, they called me on both the numbers I had given, my connection worked for one full day after that and now you are telling me that I am not what I claim to be! Honestly, if Reliance was asked to take care of our borders, I am quite sure, they will succeed in keeping out not only those Bangladehis and Pakistanis but also some of the Indians! They are just so Goddamned good! Pissed, I called the dealer I had taken the card from. He is also surprised! Now what should my reaction be! super surprised? anyway, he promises to find out the problem. The next morning I check again and I see that suddenly the connection is working. Now I dnt know whether to be happy or sad coz u never know when they will cut the connection again saying I am not the person I say I am. Its been a week now and so far so good. But knowing that its Relaince NetConnect, I wouldnt be surprised if one day they call me and say I am a suspected Taliban leader!
Its just absurd the way some companies work. I understand you gotta ensure that in a post paid connectio the company doesnt lose money but does it mean u will stop giving connections to ppl who are in a city for a few months? Why not have sm initial deposit instead? Do you really think someone will buy a dongle worth 2700 and then not pay a bill of what 300 bucks??? Knowing fully well that he cnt use that card for any other company again! And why would you cut the connection after all the verifications! Its senseless. I just dnt know what to call them!
I dnt think Reliance NetConnect ppl can change the dumb way they work. But I do hope not many companies in India would follow their policies!!
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