Monday, April 18, 2011
Etiquette rules for banks on way
New Delhi, April 17 (PTI): Bank customers may soon expect better services and speedy redressal of their grievances as the Reserve Bank of India is likely to consider a fresh set of rules to improve customer service practices.
Almost a year after the RBI put in motion a process to improve customer service, a panel set up by the apex bank is ready to submit its recommendations later this month.
Sources said the panel was likely to suggest a tighter vigil by the RBI for banks lacking in customer service, monetary and procedural penalties.
Besides, banks may be asked to resolve various grievances within a pre-determined time.
The committee was constituted in June under the chairmanship of former Sebi chief M. Damodaran.
The panel, which comprises representatives from the banking industry, had completed its draft recommendations by January and was expected to submit the report in February. However, the panel decided to redraft the proposals after receiving fresh inputs from various stakeholders and its final recommendations are almost complete.
It will be the first major report on customer services after one in the early 1990s by the M.N. Goiporia committee, headed by the then SBI chairman.
The panel is also said to be in favour of giving more teeth to the banking ombudsman through legal measures. The Banking Ombudsman Scheme was established by the RBI in 1995 to provide speedy solutions to customer grievances.
The RBI will frame its final guidelines after studying the recommendations.
The banks will have to tell the customers beforehand about the expected time they will take to provide the services. The committee may also suggest reviewing the entire system of attending to customers, including the approach, attitude and fair treatment.
Courtesy : The Telegraph
Settling the dues -Bank
The financial difficulties faced by families on account of delayed settlement of life insurance claims are well known. What’s generally not known is the problems that legal heirs run into when it comes to accessing the bank accounts and lockers of deceased depositors
The banking regulator— the Reserve Bank of India (RBI) — is, however, aware of this and has issued detailed instructions to banks on the subject, aimed at reducing the hassles faced by relatives. Yet, all banks don’t follow the regulator’s instructions in letter and spirit, resulting in considerable hardship for the surviving family members.
Firstly, when a customer opens an account or hires a locker, the bank is supposed to advise him or her on the imperative need for nominations. Similarly, term deposits should have nominations and even if the depositor is unaware of its importance or forgets about it, the banks have a responsibility in ensuring that it is done. Banks, however, never take this task seriously.
In fact, the regulator has also advised banks to educate customers on the importance of the “survivorship clause” in case of joint accounts, as otherwise the surviving joint account holder does not automatically get the right to the account.
Similarly, in respect of term deposits, the RBI says that banks should not insist on completion of the term of the deposit and should allow premature termination on the death of the deposit holder. Yet, there are many cases where banks have refused to cut short the term of the deposit and denied the deposit amount to the legal heirs in urgent need of money.
Even where the deceased depositor has not made any nomination, banks should adopt a simple procedure for repayment to the legal heirs, advises the regulator. In fact, on June 9, 2005, the banking regulator issued detailed instructions to banks on how to simplify and expedite claim settlement following the death of a depositor. Even after six years, such simplified procedures elude family members.
In fact, the RBI circular sets a time limit of 15 days for settling the claims in respect of deceased depositors. I wonder how many banks really stick to this time limit?
Well, in order to keep tabs on this, the regulator suggests banks should report to the customer service committee of the bank’s board the details of the number of claims received and the time taken for settlement and if there has been a delay, the reasons for it. It’s time the regulator asked banks to make this information public.
Courtesy : The Telegraph
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