Panel to help small customers get a fair deal

In order to improve service standards in banks, the Reserve Bank of India (RBI) has decided to set up a committee to look into banking services to retail and small customers, including pensioners.

“Though there exists a tiered mechanism for customer grievance redressal in banks, its efficacy in terms of attending to customer complaints is far from satisfactory,” RBI said in the annual policy statement.

In addition to services, the committee will look into the grievance redressal mechanism in banks, including its structure and efficacy. It will also suggest steps for quick resolution of complaints and examine international experiences.

The report said the Banking Ombudsman’s offices and RBI had been receiving several complaints regarding levying of excessive interest rates and charges on certain loans and advances.

“The issue of treating customers fairly is assuming critical importance as experience shows that consumers’ interests are often not accorded full protection. Customer service in the banking industry is increasingly becoming important as banks are privileged institutions and banking is a special public utility service,” RBI said.

While banks are allowed to choose the types of services to be offered to customers and fix their costs, RBI said concerted efforts needed to be made to further develop a credible and effective functional system for attending to customer complaints.

The committee will also strengthen the mechanism for implementing RBI’s guidelines on customer service through on-site and off-site inspections. Banks have been asked to devote time to deliberate on customer service in a board meeting once every six months.

The central bank has asked banks to scale up their internal structures to attend to the special needs of the disadvantaged groups such as pensioners and small borrowers, including farmers, along with meeting basic customer needs.

RBI has undertaken a number of initiatives over the past few years such as reining in of recovery agents, introduction of comprehensive display boards, banking facilities for the visually challenged, rationalisation of service charges on collection of outstation cheques and free use of ATMs to ensure that customers get a fair deal.