The Reserve Bank of India has a reputation for being a macro-economic entity. Its smallest of signals have big impacts. No wonder that the Governor and the senior staff at RBI deliberately use language that is measured and sounds obtuse. But the normally reticent Central Banker is swinging its gaze toward the micro, and is saying loud and clear: the individual matters. RBI is in the process of putting regulation in place that will ensure that sharp practices in the banking sector are contained. Says Usha Thorat, Executive Director, RBI: ‘‘We are very committed to the individuals and the problems they face.’’ For instance, this season’s credit policy spoke about two major issues that are of interest to the rights of the individual customer. One, RBI will set up an independent Banking Codes and Standards Board (BCSB) on the lines of the UK body to ensure that the code of conduct for fair treatment of customers are adhered to. Says Thorat: ‘‘The Indian Board will be a not-for-profit entity, though the exact structure is yet to be decided.’’ Indications are that the Board should be operational by end 2005. The Fair Practice Code for banks is already up on the Indian Banks Association website (www.indianbanksassociation.org). The BCSB, however, will be an independent entity (free from the club house mindset of any association) that will ensure that banks comply with the Banking Codes. The Indian body will be styled on its UK counterpart, which has a team that carries out visits and their reports assess the extent of compliance of each subscriber. Adverse reports are followed up to ensure matters have been corrected. In some cases disciplinary action is taken. Two, RBI will issue guidelines to credit card issuing banks to ensure transparency and disclosure of information to customers. These guidelines are already on the RBI site and can be downloaded. The highlights of the guidelines include clarity in communication of the credit card details to the customer in language comprehensible to a layman, prominently displayed, easily displayed, easily readable and crucial items highlighted. There would be a code of conduct for direct sales agents and penalty for firms that violate this code, termination of contract for serious violations. Card companies will have to obtain specific approval of the card holder to disclose their information, and card companies will ensure that the DSAs do not misuse customer information. There’s also a ‘Do Not Call’ registry to be maintained by all card issuing banks, and Indian Banks Association will set up a website where people can register their phone numbers in the Do Not Disturb (DND) list. And perhaps the most important: if a person is billed for an unsolicited card, the billing charges are reversed and a penalty of twice the amount billed is paid to the individual. The exact modalities will be worked out soon.
