Target Pressure and an Elderly Fixed-Deposit Customer
Ritika, 26, is a relationship manager in a private bank branch. Her monthly targets are 12 insurance policies, 40 credit cards and 15 new savings accounts; a board displays each relationship manager's score and the branch manager reviews it every morning. With ten days left, she is seven policies short. A 68-year-old retired government teacher, Kamla, visits to place ₹10 lakh in a fixed deposit. She says she needs monthly income for household expenses and ready money for her husband's cataract operation. A colleague suggests selling her a unit-linked insurance plan because it pays higher commission, counts toward the target, and 'she can surrender later if needed'. Ritika knows the product has a five-year lock-in, market risk and charges, and that Kamla has said she wants no risk. Ritika's appraisal is due in ten days.
1. Identify the conduct, suitability and regulatory problems in the colleague's suggestion.
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The suggestion is mis-selling. Kamla has stated a no-risk need and a liquidity need for her husband's operation. A unit-linked insurance plan has market risk, charges and a five-year lock-in; telling her 'she can surrender later' hides the cost and loss of liquidity. She is a senior citizen and may be vulnerable.
Using a bank deposit relationship to push a commission-paying insurance product without a need analysis breaches suitability, disclosure and treating-customers-fairly standards; it can also create mis-selling liability and reputational damage. The target is not a reason to change the recommendation. Ritika should not sign a proposal that records a risk profile she knows is false.
2. What should Ritika recommend and how should she document the conversation?
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Recommend a senior-citizen fixed deposit or a ladder of fixed deposits so that part of the ₹10 lakh matures around the operation, plus a savings or auto-sweep account for contingency. Explain interest, tax deducted at source, premature-withdrawal terms and nomination. If Kamla herself asks about insurance, do a documented need analysis and explain lock-in, charges, market risk and the free-look period; do not present it as a fixed deposit.
Record her stated no-risk preference, the medical contingency, the products discussed, the product literature given, her refusal of the unit-linked plan, and that no signature was obtained under pressure. Give her time and encourage a family member to join. The documentation should be contemporaneous and in her language if possible.
3. How can Ritika respond to target pressure and her manager without simply refusing all sales?
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Ritika should take the manager a factual pipeline: suitable insurance needs identified, credit-card needs, account-opening leads and expected conversions, not a promise to 'close seven policies'. Ask to replace part of the target with activity or quality measures, and point out that mis-selling will create complaints and cancellations that hurt the branch. She can cross-sell only after a need analysis and can seek help from a senior colleague for legitimate closing.
If the manager explicitly directs her to mis-sell, she should record the instruction and escalate to compliance or HR. Meeting a target through unsuitable sales is not a defence; the appraisal should reflect conduct, not only volume.