Harsh summers and pending rain damages
When I reached Unnao UP on the 23rd of May it was boiling hot with temperatures more than 40 o C and hot winds blowing. But, on reaching the hotel where I was put up, I found a long line of people standing in the hot sun and squabbles breaking out now and then! They were standing in a queue at the counter of UCO Bank (fully owned by the Government of India) and the queue was moving at a snail’s pace, not one of the ordinary ones, but probably a half-paralysed one! Later enquiries revealed that it was to cash some cheques. I was busy for the rest of the day and when I returned in the evening the bank was closed.
The next day morning the ruckus started at 6 am or so. When I came out a line was being formed at that early hour with the usual squabbles such lining up bring along with. On inquiries I found out the following: The business of encashing the cheques was about the compensation for some rain damage during one of the previous monsoons. There were about 12,000 cheques issued by the govt with amount starting with a princely sum of Rs.250 to a King’s ransom of Rs.1250 drawn on the local branch of the UCO Bank and the cheques dated 26th of February had been handed over to the beneficiaries on the 22nd of May, a full three months later. The people who had been told that they are valid for only 3 months had been trying hard to get them encashed before that date! Some told me that there were people who would give cash for the cheques but after deducting nearly half of the amount. Quite a few had come several times and the bank had closed before their turn had come and hence they had to return and each trip from their village would cost them Rs.30! When I suggested that they could get the cheques credited to their bank accounts with other banks- they replied, “Sirji, do you think we are people who have bank accounts?” When I returned in the evening the bank had closed its transactions and the people had gone.
The 25th was my last day at Unnao and I decided to find out how the system works. So, I purchased a cheque from my name sake one Narendra Kumar! He was kind enough to sell me his cheque for Rs.250 at par and not charge a premium for it! Armed with this I went to the local branch of ICICI bank where I have a multicity account to check on how the system works. I was advised that I could get cash for the instrument if I would go to the UCO bank on which it was drawn. I was also told that it would have to be sent to Lucknow at my cost but I was firm and said that anything would be fine, but has to be properly accounted for. They also told me that it could take up to three working days for it to be cashed but I was adamant. I told them anything would be fine as long as it would be accounted for and debited from my account.
A racket exposed
Then I had to go ahead with my programs and I reached Mangalore on the 27th. When I checked my account that day I saw that the full amount had been credited to my account. So, it was just a threat that it would take quite an amount to cash it, the cheque was not valid etc. etc. So, what would be the game that was being played with these poor people who were standing in the hot sun with the temperatures hovering over 40o C and warm winds blowing? They had been fed with the rumor that the cheques were valid for only three months which would expire in a few days. They would have been also told that they had to go personally to the bank to get them cashed, they would have been misguided that they could not be credited to accounts in other banks (not that many of them would have had such). Well, it looks like this sorry state of affairs arises from a mix of gross negligence and perhaps tacit connivance on part of various parties including the administration, the bank and vested interests such as local moneylenders.. The handing over of the cheques was delayed and so a situation was created where the local money lenders could ‘discount’ the cheques at a huge profit and ultimately the people would be the losers. Whether this was a routine bureaucratic delay or an orchestrated exercise, it seems exactly what opportunistic moneylenders could have asked for. The rush was probably due to the fact that three months would be over and the fear that the instruments would become invalid. But, as per the Reserve Bank of India guidelines the validity continues to be 6 months for the instruments signed on or before 31st of March. The administration should have clarified about the validity of the cheques and the Bank should have assured the people that they could cash the cheques without panicking.
Errors of ‘commission’
Well, this reminds of what used to happen at a tile factory in Mangalore. The owner would pay the wages very promptly by cheque on a Saturday afternoon to all the workers. The banks having been closed they would have to wait till Monday to get them cashed , but when they came out of the gates there would be a cheque discounter sitting there. He would give them cash at a very nominal discount say 2% of the value. The workers who would be delighted to receive the cash on the spot would not mind this ‘small amount’ being deducted as a commission to be enable to receive cash on the spot. The ‘small amount’ naturally amounts to a whopping 104% per annum return on the cash for the ‘discounter’. This racket was running fine until the labor department saw through it and made them pay the salary in cash!
The very scenario of the socially economically backward people standing in the hot sun raises the following questions- why were cheques dated 26th February handed over on the 22ndMay? Why were the people not informed about their validity? Why were no special facilities made to enable the people to get them cashed? The District administration of Unnao, the UCO bank owes these explanations to the people particularly to those aged, weak ill persons who had to stand for hours in the hot sun waiting for their turn to get into the shaded premises of UCO Bank, Unnao branch whose manager and staff were sitting comfortably in the air-conditioned premises when their owners the citizens of the country were suffering the searing heat and the hot winds out in the open air. The finance ministry and the Reserve Bank of India too have to tell us how such things can happen in this country and why some mechanism was not worked out by which these people could have been paid the compensation amounts due to them with their dignity intact.