OPA AT YOUR SERVICE

Questions and Answers:

Savings Account at People’s Bank

Question: I maintained a Savings Account at the Mattegoda branch of the People’s Bank solely for the purpose of drawing my pension. On November 10, 2009 this account was credited a sum of Rs. 110,000. When I perused the account on February 10, 2010, I observed that this sum of money had not accrued any interest for the three months. When queried the manager explained that interest will be added in September.

I represented this instance to the Zonal Manager, People’s Bank, Nugegoda. A copy of this reply is annexed herewith, and his self explanatory. According to him People’s Bank’s procedure is to add interest to savings account annually in September calculated on a quarterly basis. Well and good so far as the bank is concerned.

What if a holder withdraws money a day before the quarterly calculation he forfeits the rightly earned interest for the money held by the Bank for 89 days. Is this justifiable. If any administrative procedure is adopted by a Government sponsored bank it should be to the benefit of the holder and not to the interest of the institution, according to the current atmosphere. People’s Bank’s procedure can be condoned if:

1. People’s Banks are understaffed.

2. All other banks pay interest; yearly calculated on a quarterly basis.

3. People’s Bank branches are not computerized.

Those who are well flushed, deposit their money in fixed deposits and not in savings accounts. Savings account holders are mostly the poor lot. May be these account holders are unaware what is going on. A Savings Account holder eg. a pensioner will not wait for the three month period to pass when the necessity arises for a withdrawal. Hence, it is clear that there is a discrepancy which has to be corrected. Please give light to this injustice with a view to correcting same.

Worried Pensioner, Mattegoda

Answer: Thanks for bringing this to our notice as this affects the public who have Savings Accounts with People’s Bank. Sorry for the delay in replying as we were trying to contact the policy makers at the Head Office of the People’s Bank.

You are right in stating that after 89 days, if you happen to withdraw, you will get the interest calculated on the lower balance as on the 90th day or quarter end. This is not satisfactory in this era.

The People’s Bank defence is that on branded savings accounts such as Vanitha Vasana, Jana Jaya and Senior Citizens accounts, they calculate interest monthly and credit the account monthly.

We wonder why your account has not been converted to a Senior Citizens Savings Account. Anyhow we took the matter up with the DGM – Retail Banking, as we failed to contact the Senior DGM.

The DGM – Retail Banking states that the matter has to be decided by the Board of Directors and undertook to take this matter up with the Board of Directors of the People’s Bank. At least we hope that the Bank will live up to its name ‘Peoples’.

Moped auto cycles

Question: Thank you for the trouble your good selves take to answer remedial action for problems raised by CDN readers.

Moped auto cycles means motorcycles that pedal, with a normal speed of 30 kmph and their horse power is below 50 cc. These motor cycles could be used without registering with the Commissioner of Motor Traffic.

Unfortunately, the Transport Ministry at D R Wijewardene Mawatha, Colombo 10, amended the Motor Traffic Act by end of December 2009, encompassing the riders of moped auto cycles, such as TVS, Gizmo, Kenetti below 50 cc, to register the vehicle with the CMT. Several owners of the said moped could not register as the necessary documents could not be procured by them. However, the minister was good as to suspend the operation of the amendment till end of this year, according to a press report.

We are worried about the said amendment, because it is made effective with prior date other than the date of amendment to the MT Act in December 2009, thus affecting the owners of Mopeds bought several years ago when there were no such laws to register the mopeds with CMT. Late Kodeeswaran of the GCSU filed action against the Sinhala Only Act affecting the old entrants in the clerical service and won the case as the court ruled that it should not be with retrospective effect and that the said act could only apply to new entrants after the enactment of the said Act.

May we please know whether the Minister of Transport will be pleased to extend the suspension of the said MT amendment Act or to exempt the owners of mopeds prior to the date of amendment, from the said amendment.

Affected Citizen, Colombo 10

Answer: Moped motorcycle owners were fortunate all these years as these were not categorized as motorcycles thereby exempted from registration, licence and wearing of helmets. There are also those who were unfortunate to meet with accidents, by not wearing helmets either. We feel that it is a good act to include mopeds under the motor cycle category.

The Motor Traffic Department has given time until December 31, 2010 for registration without any documents or hassle for those who have purchased their mopeds in the past.

If you have the money and time to spare you can be another Kodeeswaran and challenge the Act of the Ministry of Transport in court.

By the way Kodeeswaran means millionaire.

Interest payment at Finance Co

Question: I opened a Senior Citizen Fixed Deposit account with the Finance Co. PLC a few years ago.

With the fall of Golden Key Co and the consequent loss of confidence, I requested to cancel the FD when it fell due last on June 27, 2009. But my request was refused and I was compelled to renew it for a period of another year. The ‘renewal letter’ issued in this regard indicates 17 percent under the column ‘Rate of interest for new deposit’.

When this FD fell due in June this year, I was offered an interest calculated at a rate less than 17 percent. On inquiry I was informed by TFC PLC that as per their practice, the calculation is as follows:

June to October, 2009 (four months) at 17 percent.

November to December 2009 (two months) at 10.5 percent.

January to June 2010 (six months) at 12 percent.

I am aware that the company has revised the rates of interest on 15.11.09 and 01.01.10. A copy of their circular dated 11.11.09 is enclosed herewith. It indicates that the company has decided to reduce interest rates to between 10 percent to 12.5 percent depending on the time period, effective 15.11.09. Although no specific rate of interest is indicated in the circular for Senior Citizen FDs, I was made to understand that it was 10.5 percent from November 15 to end December 2009.

A schedule issued by TFC PLC giving the rates of interest effective January 2010 is enclosed, from which you would notice that the rate of interest for Senior Citizen FDs for 12 months is 13 percent and not 12 percent as calculated by them in para three above.

Accordingly, TFC PLC should calculate the interest on a pro rata basis as follows:

27.06 to 14.11.09 (141 days) at 17 percent per annum.

15.11 to 31.12.09 (47 day) at 10.5 percent per annum.

01.01 to 26.06.10 (177 days) at 13 percent per annum.

However, I maintain that TFC PLC should pay me interest at 17 percent for the entire year, as that was the rate they agreed in renew the FD at inception of the relevant period and confirmed in the renewal letter issued to me. Kindly advise me suitably.

I thank the OPA and Daily News for the excellent service rendered to ordinary people like us.

Ranjith de Silva, Colombo 8

Answer: Unlike investing in a State bank or in Government Treasury Bills and licensed commercial banks, when one invests with finance companies there is a greater benefits in the form of higher interest but it also comes with a risk. When you decided to invest with a finance company for higher interest you should have been aware of the risk. You had good times and unfortunately now it is bad time for the finance company and yourself.

Many have lost their capital completely with some of the finance companies, you must consider yourself fortunate, that you have not lost the capital and you are still getting a return at a higher rate than the banks or Treasury Bills.

Your finance company has calculated interest to the nearest end of the month whereas you are expecting to the date. They may not make an exception for you. As regards your interest from January to June 2010, you should have got 13 percent as a senior citizen, where as the finance company may have overlooked and paid you the normal rate of 12 percent. This you may be able to rectify, if you make a written appeal and personally meet the manager and hand it over.

Undivided share of paddy field

Question: Paddy fields to the extent of six acres were owned by two co-owners in equal shares who are now dead. Half of the extent, three acres, owned by my father Dr R H de Silva, were legally owned in equal shares by my two elder sisters and by me. My eldest sister sold her 1/3 share to the heirs of the other co-owner.

The other sister gifted her 1/3 share to me. Thus I came to possess two acres of the total extent. Of this I sold one acre to an Anda cultivator while he cultivated. There is a field cultivated by two Anda goviyas, from which I want to sell my share.

First I requested the other co-owner to buy my share. Even after much persuasions there is no response. I inquired from the Anda cultivators whether they would buy. One has not responded while the other states that he would consent only if the co-owner agrees. This has created a stale-mate.

There is an outsider who is willing to buy my share. I am contemplating getting my one acre surveyed and execute the sale.

I would like to know from the authorities whether the transaction is legal.

Co-owner, Moratuwa

Answer: Our understanding is that you had inherited 1/3 share or one acre and you received a gift from your sister her 1/3rd share. Thus you owned 2/3rd or two acres. You have also stated that you sold one acre to an Anda cultivator. Now you wish to sell the balance acre owned by you which the other co-owner has not shown any interest in buying from you. The Anda cultivators are not willing to purchase or one will purchase only with the consent of the co-owner.

As such you now wish to sell your share of an acre to an outsider. From what you have stated as above we do not see any problem in your selling it. However, the Anda cultivator cannot be removed from cultivating this land by the new owner. If not he has to get the Anda cultivator’s consent to obtain permission from the Agricultural Authority for him to cultivate on his own. Trust we have given you the answer you were looking for, if not please consult an Attorney-at-Law.

Bogus rent–a-car company

Question: I have taken a rent-a-car from Eden Travels and Tours, No. 14, Jayarathne Mawatha, Colombo 5 by giving Rs 20,000 refundable deposit and monthly rent of Rs 26,000 upfront and signed agreement on 2.8.10. After few days on 20.8.10 the owner visited my house and pleaded to give the car just for a day for his personal use and promised in writing to return the car on following day.

Since then he never brought back to me. I had to lodge a police complaint on 23.8.10 under CIBI/xxx.

After several attempts, the police brought him down to the police station and conduct the inquiry on 27.8.10. He agreed to refund my money on or before 16.9.10. His statement was recorded by the police under ref no. CIB2/xxx. This time I was given an old vehicle which is not in running condition as security by the rent a car company until I get my money back.

However, on 11.9.10, Saturday while we were not at home, the said rent a car owner came to my place along with four thugs to take the vehicle (given as security) by force and had a confrontation with our landlord too. I complained to the police about this incident on 12.9.10 under CIB2/xxx. After going several times to the police and meeting with OIC and other responsible officers the police sent a registered letter to the rent-a-car owner to report to the police for the inquiry. But until today (20.9.2010 - 10 am) the police couldn’t bring him down to the police station to solve this problem.

The accused has ignored all sorts of attempts taken by police to bring him down to the police station to solve this problem.

I have to get my money back from this bogus rent-a-car company. Please enlighten me on the following:

* If the accused is ignoring the police requests to such an extent and delaying my payment what is the next step that I can take?

* In order to safeguard the public and foreign tourists, is there any rent-a-car association to notify about this bogus rent-a-car company?

* As the amount is small can I take this case to courts and if so can I keep the security given by this rent-a-car company until the case is over?

Mohamed, Dehiwela

Answer: Now that you have reported the matter to the Police, it is best that you meet a higher officer at the Police Station concerned and pursue the matter.

We understand that there are several rent-a-car companies mushrooming who may not be even members of the voluntary organization called the ‘Rent-a-car Owners Association’. The President is Kishan Perera Tel. 0777328220, Secretary Vijitha Jayatilake Tel. 0777478336.

We presume that the security you are holding is the old vehicle which you claim is not in running condition.

The rent-a-car company may claim to have set off your advance whilst you keep this old car and at the expiry of one month claim saying you have not returned the car.

Do you have an agreement signed with this company? Watch out as you may end up being the defaulter for not returning the vehicles after setting off your advance as rental.

You should consult an Attorney-at-Law regarding legal action.