Reserve Bank Deputy Governor S S Mundra on Tuesday batted for introduction of bank account number portability saying that it “has come within the realms of possibility” with the technological advancements in the payment system. Mundra, who first advocated account portability a couple of years ago, said, “back then the concept might have appeared somewhat abstract but with technological advancements in the field of payment system such as UPI etc, coupled with massive enrolments under Aadhaar and their linkage to individual bank accounts, it has come within the realms of possibility.”
“As such, the prospect of an aggrieved customer silently moving her account to another bank in the near future has become very real,” he said. As in the telecom sector, portability will allow a customer to transfer his account to another bank. Mundra also warned banks against using charges on maintaining minimum average balance in accounts and offering other facilities as an excuse to deny or deter a few customers from availing some services. “While banks have been granted autonomy in fixing minimum average balance or charging for premier services, it should not be used as an excuse to deny or drive away services to the common man,” he said.
“If a bank is offering premier services, I don’t see anything wrong for them to charge for that but it should be reasonable and not usurious, and it should not be designed to keep some customers away,” Mundra said. The RBI’s concern is limited to ensuring availability of banking services to all customers and it is not looking into amount banks are levying on customers to offer these facilities, he said.
“Despite outlining of minimum standards for customer service through codification of banks’ commitments to customers, we observe that the number of complaints received by the offices of Banking Ombudsmen continues to rise,” he said. For the first time since its inception in 1995, the number of complaints to BOs exceeded one lakh last year. The one lakh mark has already been crossed in the current year.
“Our analysis has shown that percentage of complaints on non-Adherence of BCSBI Code — Clause 8(1)(s) and 8(2)(d) of BOS — over a six year period from 2010-11 to 2015-16 has increased from 24 per cent to 34 per cent,” Mundra said. A survey conducted by Banking Codes and Standards Board of India suggests that the increase could be on account of disconnect in application and understanding of Codes among frontline staff of the member banks.
According to Mundra, the narration in the passbooks/ bank statements at present is quite cryptic and generally inscrutable. This is despite extant RBI guidelines that mandate recoding of intelligible particulars in the statements. “Of late, we have received numerous complaints not only from customers but also from the investigative agencies who find it extremely difficult to understand the transactions during the course of their investigations. The RBI is in the process of reiterating its guidelines to banks to provide essential minimum relevant details in respect of various transactions in the passbook/statement,” he said.
The safety of cheques put in the cheque drop boxes as also the quality of cheque leaves enabling printing of fake cheque leaves is a matter of concern, he said. “Customer service to senior citizens is a major concern. Difficulties faced by pensioners in receiving updated pension, issuance of life certificates, need for periodic KYC etc. Several grievances have also been received from nominees of deceased customers …,” he said.
According to Mundra, documents to serve as an address proof for KYC compliance continues to remain a major irritant even while the customers are permitted to submit a simple declaration about the current address which may be different from the address proof which was originally submitted. “The customers are also allowed to open a small account even without proof of identity and address by submitting a recent photograph and signature,” he said.
“The RBI would be extensively focused on mis-selling of third party products, violation of KYC guidelines, imposition of usurious service charges during the current year’s supervisory cycle. Further as you are aware, RBI has specifically established a department for examining the instances of regulatory violations with a view to taking enforcement actions on the errant banks,” he said.