Banking in G7

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In my first job working for a bank in India, I remember processing a bunch of cheques received from the clearing house in short time limit and send it back to the clearing house by the cutoff time. In those days it used to take 4 to 5 days to clear a cheque and around 3 days to clear a draft (called as bankers cheque here). This was more than 30 years ago. These days in India, they have the new CTS cheques that clear in 2 days.

Here in Canada that prides itself as being at the forefront of many things, it is a shame that we have low competition in Banking, Telecom and many other industries. As a result, it still takes 5 business days to clear a bank draft. Today I got a bank draft from a bank on the other side of the street and deposited it into my bank account on this side of the street. It cost me $7.5 to buy the draft and it was for a large amount and will take 5 days to clear. The bank will not pay me interest for those 5 days. The bank that issued the draft took out the money right away so I don’t get interest there either.

Similarly, PIN based credit and debit cards were in use in Europe many years before it came to Canada. There are other quirks in the system too. Many years ago, my debit card was declined at a merchant. I called the bank and they confirmed my identity and asked me to get a new debit card from the nearest branch as my card had been compromised. The point here is that they should have called me so that I don’t have to be embarrassed at a checkout counter with a declined debit card.

It then happened again within 30 days and this time, I asked them where the card got compromised and they would not let me know. I asked them the amount involved and they would not let me know that either. There is a shroud of secrecy on the whole area involving misuse of cards by criminals. It is important to note that we do not get any interest in the chequing account and in fact have to pay fees for the account. The savings account gives an interest rate that is below the inflation rate. When it comes to foreign exchange that is a different kettle of fish – be it exchanging money or sending a wire.

Well, now that I had my rant; I am feeling better! Thanks!!

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