The telecom sector is not the only one where the regulator has cracked the whip on service quality. The RBI is planning to follow suit, with regulatory action expected on a charter of consumer rights that the banking regulator has developed after public consultation last year. Under this, the RBI will intensify field visits to check mis-selling as well as the proper functioning of bank infrastructure such as branches and ATMs. There have been mounting complaints from customers on bank infrastructure such as ATMs either not working or being out-of-cash for extended periods of time, especially over the weekends.
Bank boards have already been asked to put in place a broad framework to ensure that consumer rights are protected. Once the frameworks are operationalised by banks, the RBI expects to draw up a list of best practices and potential regulation to get banks to spruce up their consumer interface, officials said.
In December last year, the RBI had released the final charter of consumer rights. The guidelines cover a right to fair treatment, transparency, suitability, privacy, grievance redressal and compensation. The banking regulator has also highlighted that the customer should not be subjected to unfair business or marketing practices.
In case of a violation of the charter, the affected customer can escalate the matter through the chief customer relations officer of the service provider concerned, which can be further escalated to the banking ombudsman, if needed. If a problem is systemic or if the sums of money involved are large, the regulator could step in.
On complaints over mis-selling of products, the central bank has clearly spelt out that the products offered by banks should be appropriate to the needs of the customer and based on “an assessment of the customer’s financial circumstances and understanding”.
The onus of protecting the confidentiality of customers’ personal information has been put on banks, unless the customer gives a go ahead for information to be shared. Banks will also be held accountable to facilitate the redress of grievances stemming from its sale of third-party products.
The focus on improvement in quality of service comes at a time when the RBI is expanding the scope of the spread of banking services and the people that it aims to cover. The government’s Jan Dhan Yojana has already created accounts for much of the excluded population. As a step towards building on this initiative, officials said the RBI is focusing on ease of access to bank accounts through business correspondents, payment banks, and point-of-sales machines so that they are used frequently. Easy payments, access to cash-in and cash-out facilities, and widespread availability of safe savings instruments form the central bank’s next set of objectives in the financial inclusion of households.
The second focus in on easing lending to small producers — farmers, self-help groups, or businesses, for which, the central bank is working on improving the structure and working of credit information bureaus, collateral registries, and debt recovery tribunals.