Provide cost-effective services, says Chakrabarty

Reserve Bank of India deputy governor KC Chakrabarty today exhorted banks to make their services cost-effective.

Speaking at a function organised here by the State Forum of Bankers’ Clubs  and Bankers’ Club, Greater  Kochi, he said only by making banking transactions cost-effective, banks could establish customers’ rights.

"Our banks have failed to offer quality, cost-effective service to customers. They charge Rs 60 for a DD worth Rs 36, insisting  on the criteria of Rs 60 service charge up to an amount of  Rs 10,000.  For  a cheque that bounces, a fine of Rs 50 to Rs 800 is charged. However, if a cheque bounces even if there is enough balance in the account of the customer,  the bank is not fined," he said.

 

Banks should  leverage technology  to make financial inclusion a reality, he said, adding expanding business and retention were the two challenges before them. Money lenders still held sway in the country as banking penetration is only around 40 per cent.  "The new banking licences would strengthen competition in the industry, which will in turn will help the customers."

Stating that the RBI was not thinking of instituting an inquiry into the private lending industry as a whole; he said it would look into individual cases. Loans given to private lenders by banks would not come under priority lending.

LRR Warrier, president of the State forum of Bankers’ Clubs presided over the meeting.  Amitabha Guha, chairman, South Indian Bank, VA Joseph, managing director and CEO, South Indian Bank, and Abraham Tharian, executive director, South Indian Bank, also spoke.