The Tribune, Chandigarh, India

Smart tips for internet banking
Nitin Chugh

For decades, a visit to a neighbourhood bank branch was seen as customary. People approached the branch to transact, enquire about products, update passbooks, request account statements and seek credit approval. At the branch, as trained staff with domain knowledge of online banking worked on requests - customers merely waited for the transaction to be completed. Today, the scene at a branch has changed. No longer do customers throng the bank for routine transactions. Technology has now become an integral part of a customer's way of life too. Most core transactions that were once conducted at the branch are now done by the customer himself from the convenience of his home or elsewhere.

Online or internet banking has not only made this possible, but has helped expand his knowledge of managing personal finances. Routine money matters are thus independent of the good old neighborhood branch.

While adoption of online or internet banking has been underway for some time, its pace is growing at breakneck speed. The convenience of transacting online has increased, and with it - the need to be more cautious while transacting. This convenience also gives an opportunity for fraudsters to use internet banking as a medium to commit frauds. It is important for online users to be aware of such frauds and protect themselves against them.

Listed below are eight smart tips:

1. Change your password regularly

You need to change the internet banking password at regular intervals in order to keep your account safe. Choose a "strong" 6 to 8 digit password (alphanumeric) and avoid obvious password likes date of birth, wife/mother maiden name etc. More importantly, keep the password confidential at all times. Do not store/write your account details and passwords where they are easily accessible, e.g. on paper, in a file on your computer, laptop or phone.

2. Do not use public computers to log in

Avoid logging in to your bank account from common computers in cyber cafes or libraries. These are crowded places and there are more chances of your password being traced or seen by others. If you have to log in from such places, kindly check if appropriate anti-virus is installed and updated with latest virus definition. Also, never allow the browser to remember your ID and password. Do not share your computer with unknown sources and never leave your internet banking session unattended. Make sure you clear the cache and browsing history and delete all the temporary files from the computer.

3. Do not share your details with anyone — even on phone/SMSes

Your bank will never ask for your confidential information via phone or email. So if you get an apparent phone call from the bank or an email or SMS, requesting your details, do not give out your login information (customer ID, passwords, OTP, card numbers and PINs, etc)

4. Check your account regularly

Check your account after making any transaction online. Verify whether the right amount has been deducted from your account. If you see any discrepancies in the amount, inform the bank immediately. If you find your mobile number inactive or are unable to make any calls; call service provider and check reason.

5. Always check SMS alerts

Do not ignore any SMS sent by your bank. If your account is debited with unauthorised transactions, kindly report the case with your bank immediately.

6. Always use licensed anti-virus software on your computer

Always protect your computer using to access internet banking from new viruses, ensure that you always use licensed anti-virus software.

Pirated versions of anti-virus may fail to protect your computer from new viruses. Make sure that you keep your anti-virus updated.

7. Always log out from internet banking session

Log off from internet banking when your session is finished. Do not close the web browser directly without logging out. Use the 'log out' button to log out so that your session is closed and cannot be hijacked by fraudster.

8. Always verify your internet banking URL

Always use bank URL in the address bar of the browser instead of clicking on links sent through emails. There are instances of fraudsters sending emails with fraudulent websites links that are designed similar to bank's original website. Once you enter your login details on such website, they use your credentials to access your account and steal your money. If you click on the link sent through email, verify the URL and check for 'https://' in the URL to ensure that it is your bank's authentic website.

The author is Head of Digital Banking, HDFC Bank. The views expressed in this article are his own

Whose fault is it anyway?
Harsh Roongta

I had booked a flat in Delhi in 2009 for Rs 20 lakh and got a loan sanctioned for Rs 14 lakh. I made the entire down payment of Rs 6 lakh and the lender has disbursed Rs 5 lakh. The builder has finally completed the construction and has asked for the balance amount of Rs 9 lakh on payment of which he will hand over possession of the long-delayed flat. But now the lender is refusing to pay the balance amount of Rs 9 lakh as I work for a company that has been in the news for all the wrong reasons and has also been delaying salaries. The lender claims that it has stopped disbursing loans to employees of our company and has asked me to shift my loan to another lender. The builder is threatening to cancel the allotment and meanwhile he is charging 18% interest p.a. I have tried one or two other lenders but none of them are favourably inclined. Please tell me if the lender is right in stopping the disbursement half-way through the construction process as I have been working for the same company since the past 10 years and it is not my fault that my employer is going through tough times. The market price of the same flat now is around Rs 50 lakh and I will suffer a great loss if the allotment is cancelled by the builder."

This anguished cry for help came via a television show that I was doing and it immediately struck a chord. Many large corporate groups have recently fallen on hard times and the viewer (who had sent this query) and other employees like him were part of the collateral damage which would be catastrophic for their financial lives.

This clearly spelled "unfair treatment" by the lender concerned especially since it had refused to give anything in writing about not making the disbursement. I checked the draft code of conduct laid down by the regulator (National Housing Bank - NHB) for all housing finance companies and it clearly required that "disbursement should be made in accordance with the disbursement schedule given in the loan agreement/sanction letter". Even though NHB required that the standard code of conduct (or better) be adopted by all housing finance companies, the particular HFC's code put up on its website was silent on this issue. Of course, the code of conduct allowed the HFC to ask the borrower to repay the full loan at one shot (called loan recall in legalese) in the circumstances mentioned in the loan agreement.

I spoke to a senior official of the lender and he admitted the issue but counter questioned me - what if you were a lender and it had been your personal money - would you have made the fresh disbursement knowing well that it might well turn into a bad loan given that salary payments were so irregular? I countered by saying that as a commercial person it made sense to lend the money to the borrower to get possession of the flat and then help him sell it to not only repay my full loan but for him also to be left with some money in his hand.

In any case they were a responsible lender in a regulated market and they should disburse for that reason alone. If they felt that the borrowers' profile had turned so bad that even their existing loan was at risk then they should recall the loan. They had obviously not done so because they knew that they would have to provide it as a NPA in their books as the borrower would not be able to pay back the existing loan in one shot without getting possession of the flat.

Meanwhile, the borrower was running the risk of suffering a huge loss if the builder cancelled the allotment. The only reason they could afford to ignore the code of conduct was because they knew that the grievance redressal machinery of NHB was slow and did not really penalise the lenders for any resultant losses.This true story illustrates the point that simply requiring lenders to make a code of conduct or regulating a charter of rights for customers is not going to protect consumer interests unless it is backed by concrete action in enforcing the code with large penal consequences for not following the code.

Meanwhile, the viewer should do few things simultaneously.

Immediately talk to a local lender who might charge a little more but would be willing to take over the loan and pay off the builder and then help the consumer dispose of the flat.

Initiate the official grievance redressal machinery with the existing lender

To use the social media (read twitter/facebook) extensively to highlight his plight. This particular lender was very protective of its brand reputation and would surely relent on this deserving case

I am still waiting to know what happened but the above steps would be a good guide for other consumers caught in a similar bind. This example is also food for thought on the distance that we still have to travel to really protect consumer interests.

The author is CEO, Apnapaisa. The views expressed in this article are his own

tax advice
No tax on medical reimbursement
SC VCasudeva

I am a Punjab Govt. employee. My wife was suffering from a chronic disease and had a valid chronic disease certificate issued by Govt. Medical Hospital's Board. She has taken indoor treatment from a local hospital (private) and from Medanta, Gurgaon, from 12/2013 to 3/2014. She died in Medanta hospital. A sum of Rs 17 lakh was spent on her treatment. I arranged this sum by taking loans from relatives on returnable basis. But the state health and family welfare department has sanctioned reimbursement amounting to Rs 12 lakh on government hospital rates i.e. AIIMS, Delhi against an expenditure of Rs 17 lakh. Please let me know whether medical reimbursement amount is to be taken into account for the purpose of calculation of income-tax as the re-imbursement is allowed on Govt. hospital rates of AIIMS, Delhi.

— Naresh Kumar Garg

The amount reimbursed to you by the Punjab Government in respect of the expenditure incurred on the treatment of your wife is not taxable in view of the provisions of Section 17 of the Act.

I fought a legal battle for my constitutional right for pension and other retirement benefits on 'entire service' rendered in a government-aided private school (20 years service) + government schools (15 years). The school was "taken over" by the Haryana Government/Education Department on 31.5.1990 (D.O. Appointment in aided school was 27.7.1970 & date of retirement is 30.4.2005). Please clarify whether the amount of pension and arrears can be bifurcated in year 2005-06, 2006-07, 2007-08, 2008-09, 09-10, 10-11, 11-12, 12-13, 13-14 & 2014-15. The bank has deducted TDS of Rs 1,50,000 out of total Rs 8,85,814.

— Rameshwar Dass

Arrears of pension received by you in respect of preceding years mentioned in your query cannot be brought to tax in those years as it is not possible to file revised income-tax return for those years except for the assessment year 2013-14 (financial year ended 31st March, 2013), which can be filed by 31st March, 2015. It would, therefore, be advisable for you to claim the benefit under Section 89 of the Act in respect of the arrears of pension received by you. Detailed steps for claiming such benefit have been explained in reply to a query of "a reader" published in these columns on September 29, 2014.

I am an ex-servicemen and senior citizen retired from a bank. Please clarify on the following points:

a) I have deposited the Rs 1 lakh in an FDR in bank @10.50% for one year (QTY compound). The bank issued me a receipt showing principal amount 1,00,000 and maturity value of Rs 1,10,651. At the time of maturity, the bank has deducted the TDS of Rs 1,062. Thus net amount to be credited to my account should be Rs 11,065 - 1,062 = 1,09589 but the bank has credited Rs 1,09,544 thus less Rs 45. The bank's version is that they are not paying interest on TDS remitted to income tax authorities. Is it justified?

b) As per Income-tax rule 207, senior citizens are not required to file advance income tax but the bank deducts the TDS on their deposits if the interest component is more than Rs 10,000 in a financial year.

c) If senior citizens are exempted to deposit advance income-tax then why bank is deducting TDS on FDR in advance when interest is more than Rs 10,000 in a financial year? Kindly clarify.

— Rakesh Sharma

a) The logic given by the bank for not crediting the entire amount of interest of Rs 10,651 to your account is not correct. The bank is trying to justify its mistake by giving the aforesaid argument.

b) Tax deducted at source is adjustable against the tax payable by an assessee. However, tax deducted at source cannot be equated with advance tax. There is no provision in the Income-tax Act, 1961 (The Act) empowering banks not to deduct tax at source from the interest earned by a senior citizen. The bank would not deduct tax at source only where a senior citizen files form 15H with the bank. This document enables the bank not to deduct tax at source from the interest earned by a senior citizen. The provisions relating to exemption from the payment of advance tax by a senior citizen do not cover provisions relating to tax deducted at source and therefore the bank is under an obligation to deduct tax at source in case the interest income exceeds Rs 10,000.