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| Wednesday, 8 October 2003 |
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Letters | |
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Please forward your letters to [email protected] in plain text format within the e-mail message, since as a policy we do not open any attachments.
The micro car with a macro problem "A prophet is not without honour save in his own country," seems true at least in Sri Lanka. That is what that would strike one, must forcefully on reading the leader under the caption "Micro car driven to red-tape", in Business and Finance columns in your issue of 30th September, 2003. Dr. Lawrence Perera must have spent much time, money and energy in producing the indigenous 'Micro' which should have been encouraged to be developed. Its producer seems to be an emigrant of Sri Lanka who has returned home with sufficient enterprise to produce the car just right for Sri Lanka, the majority of whose population can ill-afford the luxury of an imported car - and one that is too large for our congested roads. As pointed out used cars imported to Sri Lanka in their numbers, cost more on parts and maintenance, resulting in a drain on the country's economy. Unfortunately, Dr. Lawrence Perera would not have bargained for what he seems to be facing, in his enthusiasm over the project. He could not have been aware that in Sri Lanka, he would have had to overcome certain extra-official 'formalities' and expenses, which are known to be the order of the day. It is hoped in that context that your leader will be a revelation to the powers that be, lest another country will benefit from the entrepreneur's efforts and from whom we will have to buy our own product. ANTON FERNANDO, With reference to the letter from Louis Roberts (Canada) on 29th September which focuses on the matter of "conflict of interest" situations within the management of the Stock Exchange (CSE), it is alarming indeed that this issue even extends into the auditing of accounts. In fact, there has recently been a "delayed action" in hindsight when the CSE invited the public to make representations on this issue. However, for several years it has been undeniably evident that controversial published accounts have been made available without reservation and certified by auditors who, in their professional qualification, belong with the very same fraternity who prepare these accounts inside the corporate institutions who are quoted on the CSE! In fact, at the earlier times of their studies some of them might have been batch-mates at audit-assignments and exams! Consequently, it is vital that Sri Lanka have an Institute of Auditors in the same manner as most other well-organised business societies in order that the investors' interest be genuinely safeguarded. ROHAN JAYAWARDANE, Having rushed through the front page news item in the Daily News of 30th Sept. titled "L.T.T.E will not go back to war says Kaushalyan" with a sense of satisfaction I turned to the middle page to concentrate on the editorial as usual. Captioned "Taking the road to intolerance" the editorial was indeed a sincere appeal to both educated and less educated not to allow desperate politicians to play "pandu" with their emotions. This gave me further satisfaction. Now I got onto my favourite page "Letters" printed in bold letters. Of several letters written under different headings the one captioned "Minorities among Tamils" drew my attention naturally being a Tamil myself. Here Prof. S. Ratnajeevan H. Hoole, probably yet to become full time politician, is playing "pandu" with emotions. He calls upon the branches of Commercial Bank of Ceylon situated in the Tamil areas to put it in his own words "rethink its campaign dubbing Jaffna Siva Bhoomi in advertising its new branches there". Siva Bhoomi in Tamil is God's land in English. This land was Sava Bhoomi (corpse land) for more than two decades and it is only now slowly and swiftly regaining its earlier position. I would most respectfully appeal to Prof. Hoole not to put a wedge and bring about religious strife. Both Hindus and Muslims considered the late S. J. V. Chelvanayakam, a protestant by faith their revered leader and allowed him to sign pacts with Sinhalese heads of state on their behalf. Even after his demise they lovingly call him Thanthai Chelva. P. C. P. GNANADURAI, Reference is made to the wonderful articles published in our recent newspapers on the above caption. I wish to add a few more important views. I think if I do not add a few more prudent points to what have been already emphasized, I think I will be failing in my duty as I have served in a state owned bank for a period of over 34 years as a credit officer and in various other capacities. I take this opportunity to expose more about some disadvantages the valued constituents have to face in seeking services particularly in respect of credit facilities from State owned banks. Along with the application for the loan duly perfected the prospective borrower, in the event the security is a property has to submit many documents such as the local authority documents viz. certificate of ownership, certificate of non vesting, street lines, tax receipts for the last quarter, annual assessment notice. If a house is to be purchased from the proceeds of the loan the title deeds, have to be verified for over thirty years by a bank's panel lawyer, and a valuation report of the property to be purchased too has to be submitted. All fees pertaining to the above which are exorbitant have to be borne by the prospective borrower. I am not exactly aware whether at present a fee is levied to obtain a loan application form. However to obtain an application form for a loan one has to be interviewed and screened by the Credit Officer or Manager of the bank branch. They will only not ask for one's horoscope. The bank has to be convinced in regard to the purpose sought, the quantum of the proposed facility and the repayment capacity and the age of the prospective borrower. The processing fees is called stationery charges/documentation charges which is 1% of the quantum of the loan, which is also a substantial amount for a even a medium sized facility. Usually the proceeds of a loan after appraisal and approval are credited to the account of the borrower. The documentary/stationery charges are simultaneously debited. When proceeds of the facility are released the client having paid exorbitant fees for title insurance, title verification fees, valuation fees, stamp fees, mortgage fees etc, also has to pay 1% (point) as debit tax when withdrawing the proceeds of the loan. There is another expense to be borne by the client as inspection charges. On submission of the loan application form duly perfected the bank officers will initially want to carry out an inspection of the premises to ascertain and satisfy with regard to the purpose of the facility sought, prior to commencement of processing of the application. All charges pertaining to inspection has also to be borne by the client. Inspection charges involves transport charges, charges of the officers participating in the inspection, which ranges according to their grades. I am reluctantly compelled to refrain from commenting on other incidental expenses most clients have to bear during the time of processing of the facility, granting and thereafter. In addition to the high relatively interest rates one has to pay monthly on repayment a charge levied as D/L, GST, VAT or whatever which is a certain percentage of the interest component, also has to be borne by the client or borrower. The account maintenance/ledger fees are charged by the bank is called "service charge" which varies from bank to bank is debited at the end of each month if one fails to maintain a fixed minimum balance during a complete calendar month. This charge is debited by the bank at will even without prior notice. I suggest the bank on the contrary to pay the client a substantial amount as interest for maintaining high balances in current accounts. It should be emphasized that the hardcore defaulters are ultimately subjected to 'parate execution' of properties mortgaged to the bank as immovable security for loans of alarmingly large magnitude. These wilful defaulters owe the banks millions of rupees. The notice of 'parate' auctions are frequently published in local newspapers by the banks at a high cost. However it is very surprising that through this legal course of action how many cases have been won by the bank to under 'parate' and recover the outstanding dues. I am sure I wont be wrong if I boldly state that the number of successful 'parate' executions may not be even a handful of cases. The defaulters escape scot-free. It is indeed a pathetic state of affairs. Here too the big sharks escape while the small sprats have to face legal action in courts for long duration causing tremendous pain of mind. The bank employees from the grade of unskilled peon to manager and above enjoy a heap of luxurious benefits. They are entitled to obtain housing loans upto Rs. 1 million in addition to several other loans under special separate schemes. They are also eligible to apply for a general loan termed 'once and for all'. Loan facilities of Rs. 150,000 to settle outstanding of all small loans obtained earlier. They can repay loans on a long term at a very low interest rate of around 5% per annum. They can extend the repayment period not only upto 60 years of age but even upto 70 years of age. The instalments after retirement to be recovered from healthy monthly pensions they are entitled to. They are also paid bonuses thrice a year equivalent to 2 months gross salary. They could also encash their unutilized leave at the end of each calendar year. The amount most employees receive is a big sum, which are even more than their bonus payments. These employees could obtain loans against 75% of the balances lying in their provident funds without any hassle once in 6 months. These fortunate bankers are also entitled to obtain "investment Loans" on remaining balances left in the provident fund. Here interest at 5% per annum only has to be paid monthly. The capital outstanding to be recovered only at the time of retirement. Most employees who enjoy all these unbelievable benefits are mostly stooges of politicians recruited during the past three decades. I wish to further emphasize that the State owned banks has a select panel of lawyers and valuation officers. They do not make use of their own legal officers to obtain title reports and similar services acceptable to the banks free of charge to the valued clients. It is pertinent to mention that exorbitant amounts are charged by panel valuers for submitting valuation reports. They charge a percentage of the market value of the property as their fee which also to be borne by the client. In variably valuation reports are needed regularly to enhance existing credit limits. As for the valuation officer it is a simple exercise to get a computer print out after feeding the current data. In the context of the above the management of State owned banks have failed to exploit the services of their own legal officers to assist desperate clients at no cost. It is the fervent hope of the writer, that drastic changes are implemented with a view to offer redress to prospective borrowers amongst their large clientele when their loan application are processed and appraised. SUNIL THENABADU, |
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