In May 2010, the Reserve Bank of India (RBI) set up a Committee on Customer Service in Banks, with a galaxy of stars from the banking industry, consumer interests and headed by the redoubtable Mr. M. Damodaran who has many significant credits to his brilliant career but he would be remembered by millions of unit holders as the saviour of the Unit Trust of India. The 151 page Report, was to be submitted by the end of September 2010 but was submitted only on July 4, 2011; the undue delay is not explained. Nonetheless, the Report is power packed with a number of vital recommendations and it is hoped that the RBI and banks will give serious attention to time- bound implementation of the Report. It would be the height of public irresponsibility if the vital recommendations are allowed to gather dust as invariably happens to most official Reports.
The first item in the terms of reference relates to ` customer service in banks- approach, attitude and fair treatment to customers from retail, small and pensioners segment' In this short column it is just not possible to do justice to all the breath- taking recommendations, and hence here focus would be to selectively discuss a few issues relating to the first term of reference. It is indeed commendable that the Committee has undertaken considerable footwork across the length and breadth of the country consulting an array of stakeholders. While the Report covers a wide variety of issues, it would have been of great interest for the Common Person to know more about the results of the Committee members several in cognito visits to bank branches. This would have provided vital information on the ground level situation. It is unfortunately the general perception of the Common Person is that the quality of banking service depends on who you are and who you know. While one cannot expect totally flawless service when dealing with a multitude of customers, banks should be able to measure up to the service provided by say the airlines or the railways. The basic tenet of fair treatment should, among other things, be based on minimum courtesy and behavioural standards. It is interesting that the Committee refers to ` rude relationship managers' ( Page 45 of the Report).
What was the experience of the Committee members in the course of their in cognito visits? Dr.Y. V. Reddy, as Governor, would often agonise why we cannot develop a culture in our banking system of saying ` please sit down', ` I will try and resolve your problem' or even say ` sorry'. It is unfortunate that after so much effort at improving customer service ` rudeness' in dealing with the ` Common Person' is the norm rather than the exception.
The Report emphasizes the right of every citizen for a simple deposit account and reasonableness of charges. Witness the recent uproar in the banking industry when the RBI released a Discussion Paper on Deregulation of the Savings Bank Deposit Rate. Banks have vowed that they would unleash a war of terror on small depositors by imposing punitive charges and offer differential interest rates to depositors. Banks have threatened that if the RBI deregulates the Savings Bank Deposit interest rate they would not undertake financial inclusion.
More than customer education is the need for education of bank officials- top downwards that banking is a public service industry and not a private fiefdom. The death of a depositor is an agonizing period for the bereaved family and despite explicit instructions by the RBI on how to handle such cases, there are reports of banks using highhandedness in dealing with such cases. The Committee does well to stress the need for the Banking Codes and Standards Board of India ( BCSBI) to undertake Rating of banks on customer service. A prerequisite for this is that the RBI and banks have to empower the BCSBI to look into the books of banks on issues relating to customer service. In the absence of such empowerment, the BCSBI just cannot undertake the Rating of banks. The Committee makes out a strong case for raising the deposit insurance ceiling from Rs 1 lakh to Rs 5 lakh.
There are two basic prerequisites for this. First, the deposit insurance agency should be empowered to prescribe differential premia. Secondly, the deposit insurance agency should be empowered to regulate and supervise banks on matters relating to bank deposits, akin to the US Federal Deposit Insurance Corporation ( FDIC). This is a matter of the RBI accepting an independent empowered deposit insurance agency. The Committee recommends that there should be an effective grievance redresssal system within banks such as an ` Internal Ombudsman'. This would avoid issues quickly escalating to the Banking Ombudsman or the Consumer Courts. The number of complaints are not reflective of the extent of problems faced by customers as most customers are afraid of reprisals by bank officials. The Committee recommends prioritized service for the disabled and senior citizens by effective crowd management. Again, there is merit in doorstep service for the disabled, especially senior citizens. Providing a Common Call Centre for all banks is fraught with problems. As it is, banks telephone lines are never attended to and a Common Call number would accentuate customers' difficulties. Although single window operations are already mandated, even in the case of techno- savvy banks a customer has to queue up a number of times to update passbooks, draw cash and submit cheques for crediting. It is praiseworthy that some public sector banks excel in this area. While the Committee makes a number of recommendations to facilitate techno- savvy customers, attention should not be diverted from the bulk of customers who need traditional banking services.
FPJ
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