Banks' code compliance falls in 2016-17

Banks in India continue to struggle with the quality of their customer service. The overall average code compliance score on customer service based on parameters such as grievance redressal, transparency and information dissemination fell to 77 in 2017 from 78 in 2015. According to compliance ratings by the Banking Codes and Standards Board of India (BCSBI), State Bank of India improved its credit score to 76 from 70 in 2015.
 
Only one-fourth of the 51 banks in the country are rated 'high' for complying with the norms, which focuses on fair treatment of customers.
 
BCSBI is an independent body set up by the Reserve Bank of India (RBI). The BCSBI code uses five parameters for the rating – information dissemination, transparency, grievance redressal customer centricity and customer feedback. Information dissemination is the parameter where most banks have performed poorly with 15 banks having a ‘below average’ rating. The banks that score below average on parameters of transparency and information dissemination are all PSBs with large number of branches engaging in mass banking.

 

Of the 12 banks rated 'high', only one public sector lender, IDBI Bank, featured in the list and the rest were private and foreign banks, according to the annual code compliance rating released by BCSBI on Tuesday.
 
But major private sector banks saw dip in their aggregate scores. Axis Bank (dip from 89 in 2015 to 86 in 2017). HDFC Bank (92 to 89), ICICI Bank (90 to 87) and Kotak Mahindra (90 to 87). Of the 17 private banks rated, eight banks got a ‘high’ rating while the rest got an ‘above average’ rating. The high rating is for score of 85 and above while above average for 70 to 85. The average rating is for score between 60 less than 70 and below average is 60.

 
BCSBI Chairman A C Mahajan said the body has told public sector banks (PSBs) they should update system information regularly, so it reaches the branches promptly. The BSCBI survey was undertaken across 2,733 branches with 80 per cent of them in urban and 20 per cent in rural and semi urban areas.
 
PSBs, all 26 of which were rated, continued to have poor code compliance. All 10 banks with an ‘average’ rating were from the public sector. Punjab and Sind Bank and Andhra Bank had the lowest compliance scores of 62 and 64, respectively.
 
Mahajan also said that banks often have excellent code compliance at metro branches but failed miserably when it came to rural branches. 

 
BCSBI CEO Anand Aras said the body will revise the code before the end of this year. This revision will take into account the significant changes that the banking industry has undergone, like digital banking. The code had last been revised in 2014.