About Me

I am A Chartered Certified Accountant who does a bit of gardening.
The Pictures of the flowering and non-flowering plants, fruits, vegetables, culinary & aromatic herbs
in this blog are of my garden.
Most of my garden collections are driven by the Fs: They either Flower, have a Fragrance, provide Flavor, bring Fruit, Food or are air Freshening.

Monday, 19 January 2015

Do not trust your banker! Bank responsibly



Almost went to jail
A friend was held at CPS (Central Police Station) for more than 3 days because a transaction (that he was neither part of nor aware of) went through his account. Since he had no regularly income, he was not keeping an eye on his bank account and it stayed dormant for a long while. There was a fraud in one of the big banks and big chunk of the money was passed through his dormant account and withdrawn. In the process of fraud investigation, he was taken to CPS for questioning as the owner of the account. Unfortunately he was treated as though he was and had to prove his innocence.

Almost had a party
I once went to the ATM to withdraw and as usual I requested for a receipt. Out of habit, I looked at the balance to verify with my mentally calculated balance. Well, if I had taken part in a lottery I would have had a party! The balance was much much more than I expected. Just that weekend, I had done my personal bank reconciliation and therefore knew what I had in the account. So I calculated the difference between what the balance reflected on the receipt and the one I knew I should have. The resultant difference was a figure that rang a bell. It was exactly equal to my net salary the previous year with a previous employer.



This was before the online personal banking was in operation so I called up the bank’s relationship manager to find out where the ‘windfall’ had come from. To make his work easy I informed him of my suspicion. He them confirmed that my account had erroneously been credited with my previous salary! They therefore reversed the entry.

Almost went broke
In a separate but prior incident, my balance was less than what I expected. The difference happened to be equal to a one month’s loan installment. I called up the bank and they found out that they had debited the loan from my account my employer had already deducted it from the payroll before crediting my account. This rather disorganized by budget for the month before they had it sorted.
I remember a time when I put in an over the counter cheque withdrawal. The cashier asked me the currency denominations I would have liked the cash in. When she loaded my preferred currency, the notes were not enough and so she had consider another currency option. These were loaded on the cash counting machine which counted 80 notes. When I did a mental calculation, I realized that 80 of that currency note only gave me half the sum I was entitled to receive. On clarification, I got another batch of 80 notes! It is important to count the money before leaving the counter. If the amounts involved is substantial, request to go to a special counter that will give you ample time to confirm that you have received the correct amount of money.

Almost no savings
Long ago, I opened a savings account that required a certain minimum balance to be maintained. Since it was like and emergency account, I at some point needed some of the money the account balance went below the minimum. Immediately certain charges kicked in that over several months eroded the money in the account. It is therefore advisable to carefully choose the kind of account the suits your circumstances. In the process of teaching a client how to perform a bank reconciliation, she was shocked at how much money went through her account as bank charges! I advised her to look for a bank that would suit her banking needs and this saved her a lot of money.

Bank responsibly
For the business owners #professionalizeyourbusiness by carrying out monthly bank reconciliations and follow up any discrepancies that may arise with your banker. You should maintain the barest minimum number of business accounts to minimize the cost of maintaining them. For instance, should not open a foreign currency account just because you had one foreign currency transaction. The cost of maintaining a foreign currency account is high and should only be done if the volume of business warrants it. It is advisable to only keep open accounts that you will use and close all dormant accounts. Remember, depending on the type of account you have opened, you maybe incurring unnecessary bank charges for various reasons.

I have many instances like the above scenarios, including a stale cheque going through a year later and a whole payroll of 300 staff being paid twice. The unfortunate thing is that we assume that the bank statements that banks issue are the true status of the undertakings in our account. We should check and query even those miscellaneous charges. It is important to take charge of our banking and the banking choices that we make. The bankers are also human prone to make human mistakes sometimes.

Are you putting too much trust on your banker and the bank statement or are you banking responsibly?


Image credit: amazon.co.uk