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On July 1 this year, the Reserve Bank of India put out on its website, its latest compilation of all instructions given to banks on customer service. It is a lengthy document, but I would recommend it as compulsory reading for all people. In fact it serves as a good reference point for all grievances pertaining to banking services and equips you to be an alert consumer.
Banks, however, do not do this and people are often taken by surprise when they find large debits in their accounts –penalty deducted by the bank for not meeting the revised balance requirement. So how do you deal with such an unfair practice? Well, if you look under the heading ‘Minimum Balance in the SB Account’ in the master circular, you will be in a better position to fight for your rights. The circular says that at the time of opening the account, the bank should inform customers about the requirement of maintaining the minimum balance and the levying of charges for not maintaining the balance. The bank should inform at least one month in advance, any changes in the prescribed minimum balance and the charges that may be levied for not maintaining the minimum balance. Suppose you want to prematurely withdraw the money in your fixed deposit account and the bank tells you that it cannot be done. Is the bank right in saying so? Here again, you get to know the correct position in terms of what the regulator has said on the issue if you see the master circular. Says the circular: "A bank, on request from the depositor, should allow withdrawal of a term deposit before completion of the period of the deposit agreed upon at the time of making the deposit. The bank will have the freedom to determine its own penal interest rate of premature withdrawal of term deposits. The bank should ensure that the depositors are made aware of the applicable penal rate along with the deposit rate. While prematurely closing a deposit, interest on the deposit for the period that it has remained with the bank will be paid at the rate applicable to the period for which the deposit remained with the bank and not at the contracted rate." Similarly, not many customers are aware that banks have to have a proper, well-documented customer grievance redressal policy, duly approved by the board. In addition, banks are supposed to have a customer compensation policy. The policy, says the Reserve Bank in the circular, should 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; (d) other unauthorised actions of the bank leading to a financial loss to clients. Banks, however, neither publicise this nor compensate the consumer. So armed with this information, clients can demand compensation from the bank. Again, very few people know that banks that provide "cheque drop box" facility, cannot refuse to accept cheques at the counters and give an acknowledgement if the consumer wants it that way. In fact, banks are expected to display on the drop box itself, the information that "Customers can also tender the cheques at the counter and obtain acknowledgment on the pay-in-slips" in English, Hindi and the local language. Similarly, whether it is on failed ATM transactions or returning of dishonoured cheques; rules governing safe deposit lockers or the complaint box that banks are supposed to provide, a reading of the master circular would make a lot of difference to the consumers’ understanding of their rights vis-`E0-vis the banking services. Happy reading!
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Let me give some insight
into some of the crucial information that you will get from this
master circular on customer service. Take for example, the minimum
balance that you are expected to ensure in your savings bank account.
This amount varies from bank to bank and so also the penalty that is
levied for not ensuring this. So banks are supposed to inform
clients of this and also any change in the minimum balance
requirement.