ELECTRONIC
COMMUNICATION AND ELECTRONIC TRANSACTIONS
A few days back, I did a small coverage on our friendly Postman,
who had served us for over 23 years. The piece was in a nostalgic tone and
questioning the future of postal delivery.
This however should not set the tone of this article which
happens to be in favor of electronic transfers and communications.
Most of the people to whom my articles are normally directed
are seafarers, NRIs and HNIs or high networth individuals. However this may
have to do with everyone who would care to read.
Normally it is very awkward for a middle aged male like me
to stand up for the modern methods which everyone vouchsafes are not safe and
full of risk. There is a very high level IT professional in UK whom I know(
having a doctorate in Computer Science). He operates with conventional methods
and does not access his bank account except by a ATM card. He may be aware of a
few things that we are not aware of, however we will continue with our
discussion.
ELECTRONIC
COMMUNICATION:
There are stories galore how in past years people lost
admission to prestigious colleges, or employment or a large investment
opportunity because they did not get the required letter in time , due to
whatever reason.
Nowadays it is rare to find anyone without an email address.
It is in order too, as written communication has reached mind boggling speed and
hence expedited the inter-personal and official transactions. Even the
government offices have adopted email for official medium of transfer of
information to individual stakeholders e.g. interview letters, appointment
letters. Admit cards and results are freely being communicated through emails
and SMS.
All this not only brings speed to our communication but also
saves natural resources like trees for paper and fossil fuel for means of
transportation which would otherwise be required to support the snail mail
system of communication.
However the reason why I would like to support
E-Communication is for another reason in addition to ensuring that you receive
your correspondence.
PRIVACY: Letters and other Official documents are open to
breach of privacy especially in today’s colony based culture of row- houses or
apartments. I have witnessed people complaining how their letters are being
regularly opened and again sealed back.
At times few missing letters from the bank may be sufficient
to reveal your financial position and liability to unscrupulous elements. I
have witnessed a case where the perpetrators / kidnappers came to know about
the amount in the bank account from a Bank Statement passed on by the Postman.
Statement of Account: of a Bank account does not only reveals
your bank balance, but a few other personal details about you like PAN No.,
email address, nomination etc.
While the Statement of bank account gives out your immediate
financial position, SOA of your DEMAT account and Mutual Funds are even worse.
They can give out your total financial standing of your lifelong savings to
people. The scenario is indeed scary as it gives a sense of violation.
Primary and secondary system of email : It is also a
relatively common complain that a person’s email has been hacked .To this I had
come up with an idea of Primary and a Secondary system of email.
With this system there is a central email address e.g. yourname@gmail.com. This ID should
never be publicized or given to anyone except family members. Now you can create
few other SECONDARY email addresses for various purposes. 1 email ID for your
bank, 1 for your MFs and demat account, 1 for public domains like promotions
and 1 for your employer etc. Next step is to install a email client like
Outlook, Eudora etc on your PC. Laptop or Tab and have all the above accounts on
the same client for receiving emails. For sending emails you can individually
select the email id from which the email is to go out.
Second method, is to go individually to the particular POP
mail site and the individual email account and create the FORWARDING to your
Primary email address , which was yourname@gmail.com
.
In this way your individual email addresses will not be
known by entities who should not know
that address and you will also be able to know if a particular email
address has been breached.
This will also deal with the data theft of email address
that has become prevalent nowadays with employees of banks, insurance companies
resigning and carrying away the data with them to be misused later.
Conclusion:
Always opt for online Statement of account of banks, Demat
services, Mutual funds, Insurance companies etc.
Have individual email IDs for individual uses and have them
redirected to your unique central account.
Relying completely on emails will not only enable you
to receive and organize them systematically
but also keep a record for an extended period of time.
ELECTRONIC
TRANSACTIONS:
Most of the Seafarers
and expatriates have their salaries remitted to a savings bank account. This is
even today done by depositing cheques in the accounts and the money lies there
for a few days to few weeks till you can access the account or issue a cheque
on it. It is seen that there is always a week or two delay between the money
coming to the account and be invested further. Sometimes this delay can be of
months too.
Considering even a 10-15 days delay with 7-8 months for seafarers
and 12 months for other individuals there is a huge opportunity cost involved
and wasted. Even if you were to use the money for opening a Fixed deposit this
gets delayed by 80-120 days for that amount. If the purpose is for investing in
MFs or stocks the loss in opportunity cost is huge.
I have always gained because of the electronic
transactions. One such instance I distinctly remember. I saw that it was the
last day of the higher interest rate of the bank which they had hiked only for
15 days in 2012 to attract NRE deposits. They obviously do not inform you .So
while I was on ship, I could open FDs on line and gain by locking into a higher
interest rate for a very long time. Similarly, I have gained umpteen times by
investing online in case of large crashes of the market while being on board
the ship.
Hence it is definitely in order that you opt for Internet
transactions. Opt for i-transactions for your bank accounts, mutual fund
investments, access to demat account even if you are not interested in the
online sale-purchase of stocks.
Also opt for DCB (Direct credit to bank) of your Mutual fund
redemptions, share-dividends, insurance paybacks and proceeds and any other
source from where you receive or liable to receive funds.
In India at least the central bank called RBI is making
compulsory to opt for electronic transfers.
You may be surprised that the amount of unclaimed dividends
and bonuses in the capital market is so large that the government body called
SEBI has formed a Investor’s Education and Protection fund.
Similarly, unclaimed amount from PPF and Employees Provident
Fund is well into over Rs. 100 billion.
All this is due to poor record keeping by individuals on
their personal record keeping. Most of the time reason is also that when the
depositor dies the surviving members of the family has no idea about the
financial products that the deceased had invested or saved in.
Similar case is with insurance policies. Due to poor
education of the family members, the only time the money is required is when
the Insured Person is dead. After him mostly there is no one to form the family
as to what they should do.
Few cases have come to my personal attention where after the
person had passed away. Family could not file a claim as they could not get
their hands on the Policy documents. The agent did not inform them since he is
supposed to be paid by the company. The company was not pleased when I sent
them to file their claim after 3 years.
Now there are custodians nominated by government who can do
the safekeeping of your Insurance documents in a demat way, just like your
shares. But for that you must inform your family.
Conclusion and takeaways:
- 1. Opt for electronic fund transfers and internet transactions in your financial dealings.
- 2. Keep a record of all your investments in one place.
- 3. Opt for Direct Credit to bank of ALL your redemptions, sales, dividends, bonuses.
- 4. Opt for SMS information also which is available freely nowadays.
- 5. Keep an electronic record of your insurances.
- 6. Invest in a good antivirus.
- 7. Keep changing your passwords regularly.
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