Are private banks really that much better?

A wonderful experience narrated by a friend, which many of us have been experiencing it time and again.

His son has accounts with three banks - Kotak Mahindra, ICICI Bank and Bank of Maharashtra. He shifted residence as his building is undergoing redevelopment.  He, along with his son went to the banks on 2^nd May to get the conversion of status from minor to major as well as to update the address. His bank-wise experience is a real eye-opener:

BANK OF MAHARASHTRA: One single form for the conversion with a photograph. The account gets updated and the very next day we get back the updated passbook. He had forgotten the need for internet banking and so applied for it on 6 May in the morning. The email / SMS with the password and other details were received by the afternoon of the same day.

ICICI BANK: Four different forms including for conversion, new account opening and KYC documentation, photograph and signatures and about 8 different places, a separate declaration as the PAN is just applied for etc. After submitting all of this, they have indicated that the process will take about 8 to 10 working days. Still waiting to see what the back office says.

KOTAK MAHINDRA BANK: Lesser number of forms but still had to fill three different ones, do a full new account opening formality, conversion, address proof declaration, PAN declaration etc. After submitting all of this, they have indicated that the process will take about 10 to 12 working days. Still waiting to see what the back office says.

Doesn’t this mean that all along we have been praising these private sector banks to the sky and putting down the PSU banks. This is not a sole experience, this has happened time and again and to many others too.

The reality today is:

• In terms of technology, the PSU banks have almost caught up,
• As for reach, the PSUs beat the private bankers hands down any day.
• Ambience in PSU banks is not a fancy 5-star one but one would rather have instant service than a 5-star ambience,
• The key difference is that in a PSU, between the officer and the manager at the branch level, they have the entire gamut of knowledge and experience to provide all the customer service needed. As opposed to this, in private banks, this is very limited. The consensus is that ICICI Bank was always more wanting on this front as they seem to have fresher kids out of college.
• When you go to a PSU bank, you are not given the number of the ‘back office’ to call, which is the experience in private banks, mainly at ICICI. If one wanted to speak to an electronic machine for 15 minutes before getting a human who understands your needs then one would not be at the branch, isn’t it?

The son, a new generation kid is inclined to close accounts with the two private sector banks and more completely to the PSU bank. Surely, the younger generation is smarter than us, knows to sort the chaff from the grain.