the company should accept cheques only from a particular bank..thus company can verify the cheque details from the bank before accepting it.. this would also result in a sort of advertisement for the bank n thus the company can take some money from the bank on the basis of promoting the bank..
Basically the problem is Fradulent cheque Unauthorized entry in to the system. Delay in cheque encashment
Option-1 if the people is having credit or debit card.
All the people are need to have to credit or debit card to check their money status online during the transaction Preferable credit card if the cheque is fail to encash then amount will be detected from their credit card automatically.
Option-2 If they dont have card
Whoever buying shares need to register with the firm with completed details about their finance including bank account no so their financial status can be regulary checked with bank and they can rated by the agency about their financial range in which they can trade.
Option-3
Member who is buying the shares are encouraged to take credit card ( Share agencies can partnership with bank for the same- now-a-days life time free card is available )
Only authorized people are allowed to do the cheque entry if the cheques are found to be wrong then whoever entered is need to pay the loss that occured due to that transaction . You should not fix any percentage simply whatever amount your paying for the loss needs to be pay the defaulters about double the times.
If the default is occuring for more than '3' occasion from the same person, he needs to be blacklisted from teh share market.
Basically you need to validate your customer by checking his financial health,give rating based on that his range can be fixed,credit card(as a safety measure).
Create an intermediate software layer that will access the Demat account and display its contents to the clients. Using this don't reflect the stocks purchased by a client unless his payment for that purchase is received. Give an ECS facility for clients to transfer money fast. Increase the interest charges on late payments so that clients do not opt to go for any credits
The employee's of the corporation has found the root cause for the problem and have given the solutions to attack the problem. In addition to the solutions given, the RMS software can be designed such that each person who is interested in buying the stock can create an ID with the company and in that, they have to give their name, username, password and PAN Number or any other Primary identification Number other than typing their personal information. As in this case they cannot cheat the company. They can also add that the payment should be paid strictly by Credit Cards as it will be good for the company as, the amount will reach the company on the click of submit and hence the work load on the relationship managers reduces tremendously. People have very good idea in using credit cards for online transactions as they do it in day to day activities like online shopping, booking flight tickets and also movie tickets. I also see that the relationship managers and others should not encouraged to enter the amount in behalf of their clients, rather they can only guide a client rather they entering the values for them. Since it is almost an automated firm the amount for which the clients wants to buy stock should purchase it online and that through credit cards. Scanning of check takes lot of human hours and will not also help in future if the client population increases in many folds in future. Bonus system should also be revised such that, it should be both performance and honesty linked rather target linked. If bonus system based on target linked then it will force employees to involve in misdeeds. Then strict policies must be framed against misdemeanors and should be penalized with fines.
If i am a Manager, i would do the following things only
Reducing the exposure limits of misbehaving branches and clients Creating a back office automated alert system which alerts RMS whenever franchisees or branches sell their clients' positions Creating a back office alert system where cheque receipt is delayed, or where actual cheque details are incorrect from the data on the system Cheque image upload while punching information Blacklist fraudulent clients, with a pop-up alert system when these clients ask for extra limits. Charging higher interest for the late payments New and innovative payment mechanisms, such as cheque truncation Written permission from clients for any trading by remisers
