January 17, 2006

Surprisingly SBI

The boom in the indian economy has made me an investor in stocks. My portfolio includes stocks of State Bank of India. I have read about the vast expansion plans of the bank and have been impressed by the new "surprisingly SBI" series of advertisements they have been using for a brand make over. The advertisements aim to create awareness that despite all the competition from private sector banks it is SBI that is numero uno. After an attempt to open a PPF account today, which is allowed only in a public sector bank, I have come to know the employees of SBI take this change very seriously.

The story goes thus:

We four from my company set out for opening a PPF account which would help us to save some tax, the destination being the SBI branch in Cyber Towers, Hitech City. We had taken with us the address/identity proofs and PAN card that are required to open a PPF account as per the government rules. We reached the bank and went inside, to my amazement the infrastructure looked world class and at par with any other private bank. But inside the bank we could find only to three officers seated and many of the seats were empty. We asked one of them that we have come to open a PPF account, and the reply was nothing one could think in the wildest of imaginations. She said "There are not enough passbooks available" and started doing her work. For sure I was surprised, but thought she must have some grudge towards the guys there at PPF that she gave such a silly answer. We approached another guy who was well dressed and even wore a tie (I am not sure if he intended to surprise the customers who thought they wear ties only if employed by private banks). But his reply was far more surprising "We do not have enough staff to do this, already some fifty PPF applications are pending here". We have got money that we are ready to invest, (for which a private bank would send a hundred executives to you), but these people are telling that they do not have enough staff and passbook. What the hell do we do? We sort of begged to the guy-with-the-tie and the reply was "You can check with State Bank of Hyderabad in the next room".

The infrastructure at SBH looked great. The lady at the first desk whom we approached asked "Do any of you have an account here?" None of us had one. "You should find out somebody who has account here to introduce you, the Reserve Bank of India is very strict now-a-days on this rule." But we do not know anyone, none of us are locals. "Then you can check with SBI in the next room". What?!

We then looked up the name boards inside the building to find out other nationalized banks. Only Punjab National Bank and Bank of India were there. My friend told his brother had a PPF account with PNB. We went there, but the guy told "We do not have PPF accounts, you can go to SBI". And the reply at Bank of India was same, though I am not sure if it is a nationalized bank. We then tried Madhapur Post Office and SBI branch at Jubilee Hills but was of no use. After two hours of toing and froing between banks and post offices unsuccessfully we decided to give up.

I have now become doubtful about the validity of the statement "elephants can dance" that they use to indicate that SBI can still perform well in the stock market. I had bought the shares for long term investment but am doubtful now of keeping them for long. I believe it would be illegal if I provide the passbook and staff for the SBI even if I can, so I will put my money in any of the other tax benefit schemes that are less surprising.