Mutually Urban

No, this is not the opposite of Wodehousean “truly rural”. This is about how the Mutual Funds in India focus only on urban areas, treating those living in rural areas as second class citizens. Upliftment of rural India is a phrase often bandied about by all politicians when seeking votes but conveniently forgotten once when they are in power. But I would never have thought that the Mutual Funds too would ignore rural areas despite big wigs of the Funds often talking about ‘so much potential waiting to be tapped’. The fact that the rural areas are being ignored is bad enough; those who voluntarily invest are being treated shabbily because “India lives in cities”. Violation of Fundamental Rights, anyone?

Even the application form is designed to meet the needs of an urban individual. I live in a village with less than 250 houses. There are exactly five concrete houses and the streets don’t have names. So I am stumped when I have to fill the address columns conforming to “Flat no., Building Name” etc. But this is the least of the problems.

Communication is a major hassle. The funds either assume that the entire country is covered by a network of couriers or over-estimate the efficiency of the private couriers. Another fallacy brought about by “urban thinking”. Little that they realize even the private couriers are as bad as the postal department when it comes to serving rural India. But what is inexplicable is why these funds do nothing when an undelivered cover is returned. Won’t someone find out why the cover is returned? Is it not a paramount duty of the Fund to ensure that communications reach the investor?

The next big problem area is the place of payment. Funds are incredibly short-sighted when it comes to deciding on where the redemption or dividend warrants are made payable at. I understand that the choice is made by a computer programme, based on the pin code of the investor’s address. This is typical urban ‘ivory tower’ thinking. Pray someone will please tell me why the details of the bank accounts of the customer available with the Fund (made mandatory) are being ignored while deciding the place of payment.

I shifted to a village near Hosur after retiring from a posting in Bangalore. I continued to maintain my bank account in the Bangalore because it is easier for me to deploy funds from a bank situated in a city rather than a small town without a clearing house even. Now, believe it or not, three major Funds- Franklin Templeton, Birla Sunlife and HDFC all sent the dividend warrant made payable at Hosur but with the account details of my Bangalore bank printed as payee. Can automation lead to such stupid decisions? Worse was I lost about Rs.20,000 because of Birla’s gaffe and the Fund which claims that “the name inspires trust” did not even have the decency to admit that they made a mistake let alone compensate for my loss. The Fund, without any grace, kept harping on the fact that the ‘system’ decides the place of payment which is based on the pin code of my address but failed to provide any answer as to why it ignored the bank account detail. I complained to SEBI through E-mail and snail mail but needless to say, nothing happened.

The next pin code to my village is Hosur but it is 16 kms away. The nearest town, on the contrary is just 5 kms away with branches of two major banks. There must be hundreds of others who must be maintaining a bank account in a place whose pin code is other than the one arithmetically next to theirs. The Mutual Funds with their urban mindset refuse to recognize this problem even though a viable ( and I must say, the correct) alternative is staring at them in their face. In any case is it not the choice of the investor to receive dividends at his convenience? We have a dozen financial portals offering to take the cudgels on one's behalf but that is all only for a show as SEBI is oblivious of such issues. We even have an Association of Mutual Funds in this country but its eyes, like SEBI’s, are firmly shut, while we, the people living in rural places, continue to get treated like a second class citizens, in our own country.