The woman who mistook her relationship manager for an investment advisor. With apologies to Oliver Sacks (and his best-selling book), this is how I’d describe myself given how I’ve been repeatedly misled into buying the wrong financial products. Thanks to all the relationship managers (RMs) that my bank sent my way.
While I am to blame as well (and I’ve learnt from my mistakes), the design and purpose of RMs in modern Indian banking is to sell, sell, and cross-sell. Outside temples, inside coworking spaces, parking lots, customers’ homes—anywhere you can catch hold of a customer. It’s relentless and the churn is high; RMs don’t last more than 12-18 months in a bank. The result is a role that is meant to build lasting relationships for a bank, instead looks more like a check-in, check-out counter at a hotel.
Their targets increase every year by 20-30%. And RMs are expected to earn this revenue from a mix of products, but there’s special emphasis on selling third-party products such as life insurance and systematic investment plans (SIPs), because these earn money for banks in the form of fees.
That’s how a life insurance product gets sold as a fixed deposit; a new savings account is opened without the customer being made aware of minimum balance charges; loans get issued without informing users about the prepayment charges…
In 2020, when banks went slow on issuing loans due to the pandemic, RMs had to compensate by selling more insurance.
When rising targets meet a customer base that relies on RMs for their financial needs, it creates an environment ripe for mis-selling. In its 2020 Ombudsman Report, banking regulator Reserve Bank of India said that it recorded 98, 645 complaints of different natures against private banks, up 80% from 2019.
In a deeply reported story today, Yusuf Bhandarkar talks about the life, confessions, and occupational hazards of RMs, whose role in digital times hasn’t gone away. Rather it’s come full circle.
It’s a great Friday read and it’s free only on www.multimediastudio.net
