Nowadays due to digitization we get our salary, dividends, interest etc. credited directly in our bank accounts. Similarly, various EMIs, School Fees, House Rent etc. are also debited from our bank accounts i.e. as per our standing instructions.
However when we get our bank statement, we face a number of problems in reconciling our accounts. It is predominantly due to the narration used by the bank for two main reasons –
1. Language uses by data entry operator
2. Words restriction in software system i.e. full narration do not appear.
Besides above it is also noticed that bank uses different set of narrations. At one place, for example, credit of dividend from Tata Teleservices, they will use a particular narration “Div/ Tata / 76767868768” but on another month they themselves uses another set of narration “TataTel / NEFT/ 687678676”. We keep guessing what it would mean and if we can’t understand, we would have to approach the bank to understand
1. What this credit is about
2. From which company has this dividend in form of NEFT came
The issue still persisting in my given example are as under :-
1. By mentioning only Tata in narration increases confusion as there are so many companies which starts from the word Tata.
2. The format of Narration used by banks is not standardized.
Suggestion :-
1. A standardized name for the company or creditor should be used. For example TISCO, TataTele, Tata Power, etc. in case of companies or SKBinani in case of Suraj Kumar Binani
2. The format of the narration should be Creditor Name/ Type of Transaction/ Nature of Transaction/ UTRN. For example,
a. If Tata Power is crediting dividend in form of NEFT, the narration should be TataPower / NEFT / Div / 536637474
b. If Suraj Kumar Binani has issued me a cheque 565677 which I had deposited in my account and is being cleared by my bank, the narration should be SKBinani / Clearing / Cheque / 565677
In my opinion to overcome all these difficulties RBI should prepare an abbreviation list of narrations with the help of all intermediaries. This will bring uniformity, discipline and will help data feeder as well as bank management and customers to understand what it means. This abbreviation list of narrations should be made easily available on bank’s websites for ready reference and should be updated periodically.
Unless we introduce these type of discipline in banking system, we cannot expect improvement in services. This implementation would save time, energy and will enhance relationship between Banks and its customers.
The above process should be taken up on urgent basis and the list should be get prepared on war footing so that it should not get lingered. Once list gets entry into system then only its’ implications can be judged.
Moreover there is also scope for modification, addition etc. which will add its’ usefulness.
Trust readers, in their own interest will take up this matter at all levels / forums so that suitable narrations list get issued without any further delay.
(The author can be reached at gd_binani@yahoo.com)
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