Can a bank make illegal tax from a pensioner’s account?

It is an accepted truth in the banking industry that the banks need customers in order to carry out their business. It does not matter who the customer is and to what category he belongs to. There will be no banks without customers.

Also important are the deposits held by the banks, which indicate the success or failure of a bank. The efficiency and the confidence of the customer on the bank depend on error free and easy transfer of money to the customer.

In the good old days, the banks rarely made mistakes even though, the employees have not been provided with computers and advanced technology unlike today. If banks made a mistake it was in good faith and without negligence, which is not how it happens now.

This may be mainly due to the lethargy of Government servants. Errors made during the ‘day and night’ regarding the current accounts were recorded in the ‘error book’ and the branch manager initialed this register on a daily basis, giving necessary advice to the employees who make mistakes while carrying out his part of the work.

The present day bank employees do not take responsibility for the mistakes they make and completely wash their hands off of their responsibility by pinning the blame on the computer.

I would like to bring to your notice some of the mistakes that were continuously made to my fixed deposit account by BoC Kadawatha branch. Please note that this is not an isolated or once a time mistakes or an incident on which I am harping on.

This has been happening to me from the time I retired from the BoC prematurely due to ill health and opened my deposit account thereinafter. Other than this I can enumerate many more incidents, which has happened prior to the above.

The debit tax Rs. 700 was charged when I opened my fixed deposit account at Kadawatha branch on 4.03.2003. The funds required to open the F.D. was transferred from my savings account maintained by me at the same branch.

Therefore, this transaction should have been done without charging the D/T. (please note that the money deposited by me was received from the BoC on account of Provident Fund balance and commuted pension after my retirement).

Even though, I opened my F.D. on the above date for a period of one year on monthly interest basis the bank reduced the rate of interest agreed upon from 7.2 per cent to 7 after one month the F.D. was opened violating the agreement.

Due to this reason, the mature date of the F.D have been extended by another month and the new rate of interest was continued at the end of the year paying less interest to me.

(The bank rectified this error after I reported this matter to the media since they ignored my request saying that they cannot correct the mistake without closing the account)

The bank sent me a declaration form for withholding tax to be completed and sent to the particular branch on April 2006. This form has been sent to me after deducting 10 per cent for WHT.

Even though I am not entitled to pay the WHT under tax concessions granted to senior citizens the bank continuously deducts this tax from my interest violating the Inland Revenue Act.

The bank does not credit the monthly interest on my FD regularly on the due date according to the instructions of the mandate. The last year September interest was credited to my current account of October 5, 2007. This also was made after I informed the bank.

The monthly interest of this month (March 2008) is due to be credited to my account on 4.03.2008. But it has not been credited to the account up to the time of writing. I am one out of a thousand pensioners who hold accounts in this State bank. If the bank continues to make this type of mistakes, the customers whoever he is, whether connected to the bank or not will lose confidence in the bank.

Why are these mistakes going undetected by the auditors as well? It is another question over which customers are perturbed. Since this is a State bank, please let me know in whom the customers will lose confidence, is it with the BoC or the Government?

Because, the BoC has the backing of the Government, can bank officers who are responsible for these mistakes behave in this manner?

W.G. CHANDRAPALA, Colombo.