It has been more than a year since the monsoon floods devastated Mumbai in July 2005, but ICICI Bank is still grappling with the damage left in the aftermath. Documents submitted by many of the bank's customers for safekeeping were damaged in the floods.
These include papers submitted as part of opening savings and current accounts, demat accounts, home loan and auto loan accounts and ICICI Direct online trading accounts.
The damage was not restricted only to customers based in Mumbai, for certain types of accounts, it touched even customers from other parts of the country. In fact, it has taken ICICI Bank almost 15 months to identify the customers who need to resubmit documents.
For deposit accounts, where the bank follows a regional storage system with documents stored in 25 different locations across the country, the damage was restricted to documents of only Mumbai-based customers.
For demat and home loan and asset accounts, where documents were centrally stored in Mumbai, the bank's customers from various cities were affected.
In a letter to customers, the bank's brokerage arm stated: "As part of the account-opening process you had executed various documents and submitted proofs of identity, address, etc. As a practice, we keep the documents in storage with agencies for safekeeping. We regret to inform you that the documents have been damaged by flooding in the storage areas caused by heavy rains."
While the bank sent the letters to its customers only last month, it has asked the customers to resubmit the papers, necessary to comply with regulatory and legal requirements, before December 15.
"To ensure that the damage impacts only a minimum number of customers, we tried to save documents using freezing and heat drying technologies, page by page. Subsequent to this, time was required to manually sort and assess for which forms we needed to get back to the customers," said Madhabi Puri Buch, senior general manager, ICICI Bank.
The bank has also taken steps to ensure that customer are not inconvenienced while resubmitting the documents.
The bank has couriered account-opening forms to the concerned customers, pre-filled with details as available in the bank's records. The customers are required to complete the forms and submit proofs of identity, address and photographs of all account-holders and nominees, as the case may demand.
"Instead of the customer having to fill up the account-opening forms afresh, we have printed out and reconstructed the forms at our end. The customers just have to approve and sign," she said.
The bank has specified that there will be no charge for re-submission of forms and has provided multiple options to the customers for submitting the documents such as visiting the branch, calling a bank representative to collect the documents and mailing the documents. Identifying this as an important issue, the Banking Codes and Standards Board of India is looking into the system involved in the safekeeping of documents.
In the aftermath of the July cataclysm, ICICI Bank has reviewed its policy to prevent a possible recurrence. First, instead of storing documents for home loan/asset accounts only in Mumbai, the bank has adopted a zonal trifurcation policy - north, south and west - for storage of documents.
Second, Buch said, "While identifying a storage partner, we will check if the storage area is a low lying area or not. If it is and, hence, prone to flooding, we will stay away from such a storage partner. We have already implemented this by shifting our storage facilities in Mumbai to an elevated area in Mahape in Navi Mumbai."
Third, the bank has included in the contracts with storage partners a provision for segmentation of documents. "For example, documents become more important for a current home loan account than for a closed account. For critical documents, storage cannot be done at a level below 12 ft," she said.
The bank has also reviewed the contracts to ensure that the storage partner does not have the right to move documents without the bank's permission.
