Tuesday, September 6, 2011

Ten Action Points to improve Customer Service of Banks

By on 7:42 AM

1. Indian Banks’ Association (IBA) will standardise most important terms and conditions (MITC) for at least ten important banking transactions and circulate among banks for adaptation.
2. Banks would initiate the process of providing one view of all bank accounts of a customer including deposits, loans, etc., with the help of available technology, such as, core banking solution. Banks would be complete the process within one year.
3. Banks would convey to the Reserve Bank, a consensus view on the recommendations of the Damodaran Committee Report on Customer Service in Banks that could be immediately implemented.
4. To create awareness about the Banking Ombudsman Scheme, the Banking Ombudsmen will annually share with local media, information regarding complaints received and resolved, including important cases and awards given.
5. A series of town-hall events will be organised by banks to generate awareness about customer service in banks.  Bank customers, bank officials and Banking Ombudsmen will participate in these events.
6. The Reserve Bank/IBA would examine the issues pertaining to monetary compensation for mental harassment suffered by bank customers.  Issues that may receive attention in the analysis would be:
  • Whether only actual loss should be considered for compensation 
  • Whether mental harassment issues can be codified for compensation and whether compensation should be capped
  • Whether the policies of the banks’ boards on compensation should include mental harassment as a ground for compensation
7. Banks should issue tax deduction at source (TDS) certificates duly completed in all respects to the account holders and despatch it to their mailing address.
8. In case of ATM/Internet based banking transactions, in the event of any monetary dispute involving the customer and the bank, the onus should be on the bank to prove the customer’s negligence or mistake.  Customer must be compensated for the losses arising out of customers’ non-authorised transactions.
9. Banks’ should initiate steps to incorporate in their code of  ‘Fair Practices to the Customers’ the following items -
  • Insurance of some reasonable amount  on their customers’ credit and debit card transactions
  • Providing periodical loan statements to small borrowers
  • Borrowers should be conveyed information on the annualised all-in cost (Annual Effective Rate) on their loan accounts.
10. Banks must not recover pre-payment charges in floating rate loans. Banks may also offer long-term fixed rate housing loans to their customers and address their asset liability mismatch (ALM) issues by recourse to the Interest Rate Swaps (IRS) market.  Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it to borrowers and, thus, banks only substitute interest rate risk with potential credit risk. The bank will, however, be free to recover / charge appropriate pre-payment penalties in the case of fixed rate loans.

About Syed Faizan Ali

Faizan is a 17 year old young guy who is blessed with the art of Blogging,He love to Blog day in and day out,He is a Website Designer and a Certified Graphics Designer.