Banks must follow rules for insurance policy: unions

Unions in the banking sector have cautioned their members to follow procedures while enrolling members under the government insurance schemes to be launched on May 9, said union officials.

Officials at some branches of nationalised banks told IANS that they were being pressured by the management to enrol account holders under the insurance schemes prior to its launch so as to show impressive numbers to the powers that be.

"Our top management has directed lower level officials to enrol customers under the insurance scheme by any means. So employees are filling up the forms in the names of customers," an official of a nationalised bank told IANS preferring anonymity for himself and his bank.

He said it is not known how the bank would proceed further on the issue.

"Whether the bank would debit the customer account's Rs.12 (for personal accident policy) and reverse the same if he objects to the debit is not known," he said.

The scheme clearly stipulates that express consent of the account holder is a must before enrolling him/her under the policy.

"In most branches the walk-in customer will be around 100-150 a day. But there are branches that claim collection of enrolment forms of around 300 in a day. This in normal course of business is not possible," he said.

"To satisfy myself, I had called around 150 customers to check out their views on their enrolment. While they agreed over phone and promised to come to the branch and sign the necessary papers the very next day, only one turned up as promised," he explained.

Thomas Franco, general secretary of the SBI Officer's Association, told IANS: "We are aware of the issue. The insurance scheme is good but the proper procedure is not being followed. We have asked our members to see the forms are duly filled so that no problem arises at a later date."

He said employees have been advised to get the Aadhar card details or any other proof with regards to the nominees.

As per the insurance scheme framework, an account holder aged between 18-70 would be provided a personal accident insurance cover (death, total disability) for Rs.200,000.

As a part of the enrolment form, an account holder also authorises the bank to debit his/her account each year by Rs.12 till contrary instruction is given.

The problem for the bankers would be high when there is a claim while the proposal form was not signed by the bank account holder.

"Going by the scheme of things, this may turn out to be a scam. There is no hurry in enrolling account holders. Banks can do this at their own pace rather than satisfying the egos of the powers that be," C.H. Venkatachalam, general secretary of the All India Bank Employees Association (AIEBA), told IANS.

"In the name of people schemes, the banking industry has become an extension counter of the government. While talking of giving autonomy for banks, the government is pushing its programmes through the banks," he said.

"The scheme is a good one. It will increase insurance penetration. But due to the pressure from the management, it may actually end up in a mess giving a bad name to the government," one banker warned.