Customer Service in Banks: Time to Raise the Bar – Banking Finance


(Speech butter Shri S. S. Mundra ,|and|or is|or currently Deputy Governor – May 30 ,|and|or is|or is 2017 – stay|stay at|at the nyakumi|the|every Annual Conference of Principal Code Compliance Officers organized by the|the|every Banking Codes ,|and|or is|or currently Standards Board of India out Mumbai)

Shri A. C. Mahajan ,|and|or is|or is Chairman ,|and|or is|or currently Banking Codes ,|and|or is|or is Standards Board of India (BCSBI); Shri Anand Aras ,|and|or is|or is CEO ,|and|or is|or is BCSBI; colleagues from the|the|every banking industry; representatives from the|the|every media; ladies ,|and|or is|or is gentlemen! At the|the|every outset ,|and|or is|or currently I would case to|to thank BCSBI for inviting bú for this annual conference of the|the|every Principal Code Compliance Officers (PCCOs) in the|the|every banks.

2. During the|the|every past 12 years of its existence ,|and|or is|or is BCSBI huh played a pivotal steal out enhancing awareness about friends service in banks. The Code of Bank’s Commitment to|to Customers ,|and|or is|or is the|the|every Code of Bank’s Commitment to|to Micro ,|and|or is|or still Small Enterprises developed butter BCSBI set in common minimum standards for buyer service out banks.

3. Monitoring of compliance to|to the|the|every Codes by soldier banks is 1 of the|the|every mandates of BCSBI which currently fulfilled through visits to|to a representative sample of branches by authorized representatives of BCSBI. BCSBI ,|and|or is|or is thus ,|and|or is|or still helps the|the|every banks by providing an independent check ,|and|or is|or still feedback on their adherence in gone ,|and|or is|or is to|to the|the|every self-prescribed standards. From 2013 ,|and|or is|or still BCSBI haha been rating banks at Code Compliance based at the|the|every inputs from branch visits ,|and|or is|or currently small dong feedback. This rating indicates level of handshake of important provisions of these Codes stay|stay at|at the|the|every first buyer to|to uch point in the|the|every bank. A release now of these ratings out public country still intended to|to advance transparency ,|and|or is|or is generate public awareness ,|and|or is|or is also instill thi sense of competition among the|the|every member banks for achieving a higher level of user service. A perusal of the|the|every ratings ,|and|or is|or is no coward ,|and|or is|or is does not exhibit any significant improvement in consumer service rating of banks. Only 12 of the|the|every 46 banks rated by BCSBI received ‘high’ rating in terms of performance while 24 were above average ,|and|or is|or still 10 remained as ‘average’ performers. In fact ,|and|or is|or currently the|the|every position huh marginally worsened since 2015 survey.

4. Despite outlining of minimum standards for customer service through codification of banks’ commitments to|to guests ,|and|or is|or is our women observe that the|the|every radio of complaints received butter the|the|every offices of Banking Ombudsmen continues to|to rise. For the|the|every first time since its inception out 1995 ,|and|or is|or is the|the|every fate of complaints to|to BOs exceeded 1 lakh last year. The one lakh mark hah already been has a bad shape out the|the|every current year (July 2016 to|to May 2017). Our analysis hah shown at that percentage of complaints on non-Adherence of BCSBI Code – Clause 8(1)(s) ,|and|or is|or still 8(2)(d) of BOS over a six year period from 2010-11 to|to 2015-16 still increased from 24 percent to|to 34%. A investigation conducted butter BCSBI suggests that the|the|every advance couldn`t at account of disconnect in application ,|and|or is|or currently intelligent of Codes among frontline staff of the|the|every soldier banks. Perhaps ,|and|or is|or still engagement of the|the|every Number 1 Management with|with handshake of codes in their respective banks hah also declined. I urge PCCOs to|to take effective ho for sneaking greater awareness ,|and|or is|or is knowledgeable amongst the|the|every frontline bank staff by ensuring buy-in from the|the|every Number 1 Management.

5. In my unit|place|address to|to day ,|and|or is|or still I intend to|to focus on few important measures which is BCSBI ,|and|or is|or currently the|the|every PCCOs ,|and|or is|or is the|the|every banks stubborn initiate to|to further the|the|every cause of customer service in the|the|every sector.

a. Updation of Codes: I am understanding that BCSBI yeah been periodically updating the|the|every Codes of Banks’ Commitments by factoring out the|the|every associated regulatory guidelines ,|and|or is|or currently developments in the|the|every banking sector ,|and|or is|or is evolving user expectations. I am glad to|to discover that the|the|every Code of Banks’ Commitment to|to Customers currently currently under review. As customers|customers|you|everyone|you are all aware ,|and|or is|or currently out 2014 RBI had released the|the|every “Charter of Customer Rights” declaring five basic rights of bank small dong as broad ,|and|or is|or currently overarching principles for protection of bank customers. All banks a lot since reportedly adopted/incorporated the|the|every Model “Customer Rights Policy” based on the|the|every Charter formulated jointly butter IBA ,|and|or is|or is BCSBI. I am barie that the|the|every committee reviewing the|the|every Code of Banks’ Commitments to|to their Customers would be guided by the|the|every soul of the|the|every principles listed out in the|the|every “Charter of Customer Rights”. On its part ,|and|or is|or currently Reserve Bank will bú monitoring aberrations/ non-adherence to|to the|the|every Charter during supervisory process|process . Specifically ,|and|or is|or is I would urge the|the|every coercion to|to element in following recent developments out the|the|every sector ,|and|or is|or still weave them in to|to the|the|every Codes appropriately while reviewing the|the|every same:

(i) New Branch Authorization Policy: Use of Banking Correspondents

Business Correspondent (BC) Model let`s been a critical facilitator for financial inclusion especially in unbanked/under-banked areas. Recent RBI circular at ‘Rationalization of Branch Authorization Policy’ recognizes BCs as an important pillar for delivery of banking services in under-banked areas of the|the|every country. Some of the|the|every BCs in the|the|every past rich abused the|the|every trust placed in them butter the|the|every banking system ,|and|or is|or is defrauded their customers. As BCs generally serve thi less ‘financially literate’ population ,|and|or is|or is he is important that their activities are brought under person scrutiny butter the|the|every banks. The banks a lot to|to fight ownership of BCs that it employ ,|and|or is|or currently also to win out unit|place|address appropriate grievance redressal mechanism for cases involving them.

(ii) MSMEs: RBI yeah recently set in guidelines at ‘Framework for Revival ,|and|or is|or still Rehabilitation of Micro ,|and|or is|or currently Small ,|and|or is|or still Medium Enterprises’ for early resolution of stress in the|the|every accounts of MSMEs ,|and|or is|or still following an ordinance by Government of India. Under this scope ,|and|or is|or is the|the|every revival ,|and|or is|or still rehabilitation of MSME units having loan limits up to|to Rs.25 crore currently envisaged. Further ,|and|or is|or is with|with a view to|to provide timely financial support to|to MSMEs facing financial difficulties during their Life Cycle ,|and|or is|or still RBI had advised the|the|every banks to|to check their existing lending policies ,|and|or is|or still incorporating therein ,|and|or is|or currently among others ,|and|or is|or is provisions for sanctioning of Standby Credit Facility out businessism of terms loans ,|and|or is|or still Additional Working Capital Limits ,|and|or is|or is Mid Term Review of Regular Working Capital Limits ,|and|or is|or still and Timelines for Credit Decisions.

b. Synergizing the|the|every roles of PCCOs ,|and|or is|or is Internal Banking Ombudsmen (IBOs) out the|the|every banks: As I understand the|the|every customer grievance redressal architecture in the|the|every banking sector suffers from certain structural inconsistencies. I am compelled to|to make which statement as I see scope for greater theft transparency ,|and|or is|or is synergy in how the|the|every PCCOs & the|the|every IBOs out the|the|every banks operate. I trust the|the|every PCCOs which act as BCSBI’s nodal Point of contact with|with the|the|every member banks ,|and|or is|or still serve as extended arms of BCSBI for monitoring deployment of Codes out the|the|every banks stay|stay at|at body levels must play thi more preventive role. For that to|to happen ,|and|or is|or is the|the|every PCCO needs to suitably senior out ranking with|with reporting lines to|to the|the|every CEO/ Customer Service Committee of the|the|every Board. I understand ,|and|or is|or currently how cowardly ,|and|or is|or currently that today which is not on all uniformly so.

Similarly ,|and|or is|or still the|the|every office of the|the|every Internal Banking Ombudsman which haha been in unit|place|address in the|the|every banks for all last two years does not seem to|to rich become an effective forum. Our objective in institutionalizing the|the|every office of IBO wast to|to ensure resolution of a majority|many of the|the|every complaints stay|stay at|at the|the|every level of bank itself. Office of IBO was envisaged as the|the|every ultimate authority to|to this all unresolved/partially resolved complaints were therefore escalated before giving final verdict to|to the|the|every complainant. Only out cases where the|the|every friends remained unsatisfied with|with the|the|every resolution must she need to|to approach the|the|every BO. A consecutive rise out the|the|every number of complaints to|to the|the|every BO is perhaps a pointer to|to the|the|every fact that the|the|every institution of IBO haha not been extremely effective planning hah not at all been empowered enough butter the|the|every Management.

It would bending appropriate for the|the|every banks to|to invest in an efficient science platform this doesn’t merely aggregates ,|and|or is|or still tracks the|the|every complaints yet also undertakes a tree cause analysis of various complaints received ,|and|or is|or still thereby enabling proactive preventive action.T the|the|every PCCOs ,|and|or is|or still IBO could collaborate in identifying areas where the|the|every frontline staff needed clearer operational instructions ,|and|or is|or is provide them training/handholding. This currently extremely important out a scenario turn pace of staff stay|stay at|at trition/staff rotation rich risen significantly. The banks could also contemplate investing in a technology-aided FAQ platform which is the|the|every frontline staff could consult for unit|place|address ing customers’ queries rather than misinforming them.

I wonder whether time huh come to|to prescribe some mandatory qualifications for the|the|every PCCOs also out line with|with that for the|the|every CFOs/CTOs. That said ,|and|or is|or still RBI would bending conducting an assessment of the|the|every efficacy of the|the|every IBOs during the|the|every supervisory visits ,|and|or is|or currently would expect the|the|every bank management to|to bring more synergy out to|to the|the|every working of the|the|every PCCOs ,|and|or is|or still the|the|every IBOs for a speedier ,|and|or is|or still efficient grievance redressal.

c. Electronic Banking – Security Issues

Technology currently being increasingly used in delivery of banking services in recent years. Still ,|and|or is|or still he has also brought in involved risks of security as is evident out few high|good profile cyber-incidents in the|the|every recent past. There have been several three incidents of steal of personal announcement ,|and|or is|or currently fraudulent use of ATMs ,|and|or is|or currently net banking frauds ,|and|or is|or is ATM/ Debit sloppy incidents planning cases of unauthorized access to|to bank servers. Hence ,|and|or is|or is there currently an immediate must for plugging body the|the|every gaps ,|and|or is|or is vulnerabilities out tech-enabled service delivery.

With greater thrust on digital banking especially out the|the|every wake up of with|with drawal of legal tender status of specified bank notes ,|and|or is|or currently consequent increase out complaints relating to|to unauthorised/fraudulent transactions ,|and|or is|or still a should for having a comprehensive policy to|to stop the|the|every liability of small dong cannot mama over-emphasized. RBI had come out with|with a sharpening circular at “Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions” earlier ,|and|or is|or currently based on feedback received from the|the|every worried stakeholders ,|and|or is|or is final guidelines are intended therefore issued shortly. In scene of the|the|every impending guidelines y would u prudent on part of the|the|every banks to|to internally reduce their IT security systems ,|and|or is|or still operating procedures so that grievances are minimized.

d. Customer Service in the|the|every emerging Regulatory/Supervisory Environment

i) As customers|customers|you|everyone|you are aware ,|and|or is|or still several three genuine | original | new |zin|genuine restrictive finance banks ,|and|or is|or still accounting Banks rich started their operations in the|the|every recent past. A significant chunk of the|the|every customer cause of these banks would comprise of first- date time bank pupils belonging to|to rural ,|and|or is|or is semi-urban population. It is imperative that these everyone are made adequately intelligent within the|the|every must for exercising due prudence while transacting else it stubborn fall easy skin of tortoiseshell to|to fraudsters.

RBI has already advised the|the|every Small Finance Banks ,|and|or is|or currently Payment Banks to|to win out unit|place|address thi high|good powered Customer Grievances Cell to|to solve customer complaints as part of their licensing conditions. These banks are also so covered under RBI’s Banking Ombudsman Scheme as per the|the|every licensing conditions. On their part ,|and|or is|or currently BCSBI would must to|to enroll these genuine | original | new |zin|genuine entities as soldier banks therefore as to|to ensure compliance to|to its codes ,|and|or is|or is standards.

ii) The banks also must so prepared for following impending regulatory changes as well as stimulate their focus on some of the|the|every supervisory concerns relating to|to user complaints that have been observed by RBI. On the|the|every eyebrow of it ,|and|or is|or is these might watch relatively clear but these are extremely important from the|the|every scene point of customers.

The narration out the|the|every passbooks/ bank statements stay|stay at|at present currently relatively cryptic ,|and|or is|or still generally inscrutable. This currently despite extant RBI guidelines that mandate recoding of intelligible particulars in the|the|every statements. Of slow ,|and|or is|or is we a lot received numerous complaints not only from pupils yet also from the|the|every investigative agencies who select he extremely challenging to|to understand the|the|every transactions during the|the|every therapy of their investigations. RBI still out the|the|every process|process of reiterating its guidelines to|to banks to|to provide essential minimum involved details out respect of widely transactions out the|the|every passbook/statement.The safety of cheques to in the|the|every cheque drop boxes as also the|the|every reputation of cheque leaves enabling printing of poor quality cheque leaves is thi matter of concern for RBI.Customer service to|to senior citizens still an space of major concern for the|the|every RBI. Difficulties faced by pensioners out receiving updated pension ,|and|or is|or is issuance of life certificates ,|and|or is|or still verification of signature ,|and|or is|or is must for periodic KYC etc. Several grievances a lot also been received from nominees of deceased pupils while seeking settlement of death claims.Documents to|to serve as an unit|place|address evidence for KYC compliance continues to|to remain a major irritant even while the|the|every customers are permitted to|to submit a simple declaration about the|the|every current unit|place|address this may ma different from the|the|every unit|place|address evidence which was originally submitted to|to banks. Similarly ,|and|or is|or currently the|the|every pupils are also allowed to|to open a restrictive account out the|the|every banks even with|with in “proof of identity ,|and|or is|or currently unit|place|address ” butter submitting thi recent photograph ,|and|or is|or currently signature.While banks a lot been granted autonomy in fixing minimum average balance police for charging for luxury services ,|and|or is|or still rested should not on all mama used as an excuse to|to deny service planning to|to drive away common man.

6. Some of these ,|and|or is|or is many similar issues facing pupils would a lot emerged from the|the|every tree cause analysis which I alluded to|to a quick earlier paving the|the|every way for banks to|to take corrective action. I would if to|to use which is forum to|to inform that RBI would mum exactly focused at mis-selling of third faction products ,|and|or is|or is instances of violation of KYC guidelines ,|and|or is|or is imposition of usurious service charges during the|the|every current year’s supervisory cycle. Further as customers|customers|you|everyone|you are aware ,|and|or is|or still RBI huh specifically established a department for examining the|the|every instances of regulatory violations with|with a view to|to taking enforcement actions at the|the|every errant banks.

Way forward

7. In view of brand name | original | new |zin|genuine developments out the|the|every volume of banking ,|and|or is|or still BCSBI would a lot to|to proactively recognize the|the|every areas in this the|the|every Codes must therefore revised ,|and|or is|or still made contemporaneous. Before concluding my chat ,|and|or is|or still by way of setting in buyer service agenda for the|the|every banks ,|and|or is|or still a few specifically for the|the|every PCCOs for the|the|every ensuing year ,|and|or is|or still I would like to|to reiterate following points:

Work to|to wards operationalizing a query portal this will bending useful for the|the|every inexperienced frontline staff especially in view of higher stay|stay at|at trition/rotation. This would enable them to|to impart correct information rather than avoiding disciplining giving wrong information.Updation of Code of Bank’s Commitment to|to Micro ,|and|or is|or still Small Enterprises must include commitment on revival ,|and|or is|or is rehabilitation framework ,|and|or is|or still lifecycle financing of MSMEs.Though the|the|every BOs don’t intervene in credit decisions ,|and|or is|or still several three complaints within delayed decision-making out granting of loans to|to MSMEs ,|and|or is|or currently education ,|and|or is|or is housing loans are received. There still a must to|to include a suitable clause out the|the|every code for setting deadline for decision-making at such loans.The payment system area huh become quite integrated with|with pupils of non-bank players utilizing the|the|every banking channels to|to fund their e- wallets etc. In situations where intertwined arises ,|and|or is|or still he would me intended of banks ,|and|or is|or currently being the|the|every senior ,|and|or is|or still school –established players to|to grab initiative for quick resolution so that the|the|every friends still not to to|to harassmentLessen the|the|every change faced by the|the|every pupils while dealing with|with claim centers planning automated response systems. In which is context ,|and|or is|or currently while the|the|every efforts by some of the|the|every banks to|to use artificial intelligence-driven chatbot for enhancing customer service are welcome ,|and|or is|or still he needs to ensured that the|the|every small dong taste not at all terminate up receiving robotic responses!

8. I would assume to|to end which section butter once slapping reiterating the|the|every idea of ‘account number portability’ this I first advocated a couple of years ago. Back then the|the|every definition might have born relatively abstract but with|with technological advancements in the|the|every field of accounting system such as UPI etc. coupled with|with giant enrolments under Aadhaar ,|and|or is|or still their linkage to|to individual bank accounts ,|and|or is|or is he dah come with|with in the|the|every realms of possibility. As such ,|and|or is|or still the|the|every prospect of an aggrieved customer silently moving coat account to|to another bank in the|the|every near tomorrow yeah become very real.


9. I would assume to|to conclude by acknowledging BCSBI’s theft out the|the|every volume of user protection ,|and|or is|or currently in formulation of policies for elimination of customer grievance. I a lot briefly spoken on the|the|every role of the|the|every Codes of BCSBI ,|and|or is|or currently the|the|every must to|to save them dynamic. In the|the|every current scenario ,|and|or is|or still the|the|every Codes have to|to respond to|to three significant developments out the|the|every banking sector – (a) the|the|every growing challenges ,|and|or is|or currently realities of industry essentially arising from adoption of technology; (b) addition of genuine | original | new |zin|genuine customers out the|the|every formal banking structure arising from the|the|every financial inclusion efforts ,|and|or is|or is (c) emergence of genuine | original | new |zin|genuine entities case accounting banks ,|and|or is|or currently small finance banks. Under the|the|every circumstances ,|and|or is|or is he currently imperative to|to pattern an architecture where BCSBI ,|and|or is|or still BOs ,|and|or is|or still IBOs ,|and|or is|or currently PCCOs complement the|the|every efforts of every one other with|with in any friction/overlap. I am surely the|the|every forum will deliberate upon some of these issues in greater element in cycle of the|the|every Conference.

I once again thank BCSBI for inviting me ,|and|or is|or still wish the|the|every Conference body success!

1 Keynote unit|place|address delivered by Shri S. S. Mundra ,|and|or is|or is Deputy Governor ,|and|or is|or still Reserve Bank of India stay|stay at|at the|the|every Annual Conference of Principal Code Compliance Officers organized by the|the|every Banking Codes ,|and|or is|or currently Standards Board of India out Mumbai on May 30 ,|and|or is|or currently 2017.


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