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I do not know how many of you have seen the master circular on customer service on the Reserve Bank of India website. I would strongly recommend that every consumer goes through this 92-page document, which is a compilation of all the circulars issued by the regulator to the banks on customer service. The information will empower every bank customer, and eventually force banks to comply with the directives of the RBI. Today, they find comfort in the customers' ignorance of these circulars and violate them with impunity. One of the circulars, for example, says that every bank has to have a customer service committee of the board and include experts and representatives of customers as invitees to bring about improvements in the quality of service. The RBI gives a long list of the functions of such a committee, which includes an annual survey of depositor satisfaction and a triennial audit of such services. The RBI also wants such committees to play a pro-active role vis-`E0-vis the various complaints resolved by the banking Ombudsmen in different parts of the country and bring about systemic improvements in their policies in so far as customer service is concerned. Another important circular pertains to the need for banks to have a well- documented customer compensation policy duly approved by its board. Says the RBI: " Banks policies should, at a minimum, incorporate the following aspects: (a) erroneous debits arising on fraudulent or other transactions; (b) payment of interest for delays in collection; (c) payment of interest for delay in issue of duplicate draft; and (d) other unauthorised actions of the bank leading to financial loss to customer." Banks, says the RBI, should also have a well-documented customer grievance redressal policy duly approved by its board. The banks should give wide publicity to all these policies so that customers are aware of these. If a survey were to be conducted, I am sure most customers will say that they have no knowledge or information about these policies. On fraudulent withdrawal of funds from accounts, the RBI says that if the branch is convinced that an irregularity/ fraud has been committed by its staff towards any constituent, the branch should at once acknowledge its liability and pay the just claim. But the ground reality is that banks do not even accept their faults, let alone acknowledge their liability and pay the claims. Similarly, the Reserve Bank mandates that banks return within a maximum period of 12 days from the receipt of a complaint, any money wrongfully deducted from the accounts of consumers on account of failed ATM transactions. Banks which fail to keep to this time schedule shall pay a compensation of Rs 100 per day to the aggrieved consumer, and the compensation shall be credited to his account automatically without any claim from the customer on the same day when the bank affords the credit for the failed ATM transaction, the regulator says. Non-adherence to this directive will also attract penalty as prescribed under the Payment and Settlement Systems Act, 2007. Yet customers are forced to fight for months and sometimes even years to get back their money. In fact a look at the number and the nature of complaints received by the banking Ombudsmen reveals blatant violation of many of these directives by the banks. It is only when consumers start quoting from the RBI directives and also start complaining to the regulator on violations that the banks will be forced to mend their ways, comply with the RBI circulars and also respect the rights of consumers. Having said that, I must say that the regulator, too, needs to take a more serious view of violations by banks of its circulars on customer care and service. In fact, the RBI should independently audit compliance by banks of its directives, rate the banks accordingly and make it public. This would not only help people choose the right bank but will also put pressure on banks to perform the way they should. I must mention here that
in New Zealand, the banking Ombudsman conducts every year a mystery
shopping exercise to determine banks' compliance with the Code of
Banking Practice. University students seeking vacation employment are
deployed to assess the banks' commitment to customer service and rate
them. A similar exercise here would go a long way in strengthening the
rights of consumers vis-`E0-vis the banking services.
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