Sunanda K Datta-Ray: Are you being served?

Bank recapitalisation is of little help if the will to improve service standards is lacking

The e-mail my wife received the other day from someone calling himself the Royal Bank of Scotland’s (RBS’) “auditor and head of computing department” and offering to share $100 million with her (“you will stand to get 40 per cent while 60 per cent will be for me”) as, otherwise, the RBS “management might divert the funds to their own accounts” was obviously another internet hoax. But – and this is the tragedy of contemporary British banking – the promise to “use [his] position and influence to effect the legal approval and onward transfer of the funds” might well have been genuine.

 

All the saddening stories one reads today in British newspapers take me back to my first bank account in this country as an impoverished student. There was a stamp duty on cheques for £2 and more in those distant days but the manager of my branch of the long defunct Williams Deacon’s Bank in Manchester showed me how to escape it. I drew a cheque for £1-19s-11d (I hope today’s readers won’t be too baffled by the amount!), he gave me two crisp pound notes, and I handed over a penny. “Ah, Mr Datta-Ray, the famous one pound nineteen and eleven!” he would exclaim whenever I appeared.

What sticks in my memory is receiving a letter from him some years after I returned to India. I had neglected the account because there was nothing in it to command my attention but, apparently, I had overlooked something. After pointing out that there was a credit balance of a penny, the manager asked politely if it could be set off against overheads and the account, which hadn’t been used for some time, closed. He hoped I would not take this amiss.

A second pleasant memory is of Grindlays Bank (now also defunct) in St James’s Square in London when I was posted there. There were many reasons for visiting the square – the London Library, East India Club, Spinks the antiquarian and auctioneer and the Inchcape headquarters – but none so compelling as Grindlays’ Christmas hospitality. Mince pies and mulled wine were laid out in the hall, and I often wondered if passers-by didn’t also help themselves.

It was in those years, however, that the rot was beginning to set in. Our office book-keeper, a meticulous elderly lady, was aghast when the office account’s passbook showed the balance as sixpence short. She was even more outraged when the young NatWest employee who took her call agreed and blithely asked her to “stick it in” as she reported to me. “I told her,” our book-keeper stormed, “that it would be a criminal offence for me to tamper with the bank’s passbook!” Apparently, the remonstrance had little effect.

All that passed through my mind when I read that noting mounting criticism of high rewards at the top, RBS Chief Executive Stephen Hester recently made a virtue of necessity and waived the £963,000 bonus he was offered. His predecessor, Frederick Goodwin, was stripped of his knighthood as punishment in 2008 when the government had to rescue RBS from insolvency with a £45 billion package. The bank must still be in dire straits since it has cancelled the annual lunch that 6,000 former employees were entitled to attend. Another economy has been noticed: the copy of the Financial Times visitors perused sipping a hot drink on the house (tea, chocolate and ordinary or decaffeinated coffee) has disappeared. Since the vending machine remains (though friends tell me invitations to use it are less generously made), it’s possible that some employee pockets the FT for private reading.

All this suggests that recapitalising a bank with state funds doesn’t save the situation without the will to work and the ability to do so. Some of the Bangladeshi, Indian, Nigerian or Pakistani bank officials one meets now are barely articulate. Try telephoning a branch’s general number. Nobody answers. Try what a manager’s card lists as his direct line and you get a fax machine’s beeping tone. One manager’s “direct number” showed a long abolished code. Someone else tells me that officials of his level don’t have a direct number. Perhaps India’s banking ombudsman should take a look!

All the same, I was dismayed when the European Union forced the sale of 318 English and Scots branches of RBS to the Spanish bank, Santander, as a condition of the government rescue. It would be the end of another familiar high street totem; but then, if Scotland goes, what point in a royal bank only bearing the name?

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sunandadr@yahoo.co.in