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Sl. No. |
Para of the Code |
Issues Raised by Member Banks |
BCSBI Clarifications |
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1 |
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There are multiple codes and charters for
customer service from BCSBI, IBA and RBI. There may
be need to move towards unification thereof.
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The contents covered in the Fair Practices Code
are also covered in the BCSBI Code. BCSBI member
banks are required to follow, practice and provide
information on both the codes to customers. Branches
are often getting confused.
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IBA has clarified on its website that the following
codes evolved by them are not applicable to members of
the BCSBI.
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Bankers’ Fair Practice Code
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Fair Practice Code for Credit Card
Operations
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Model Code for Collection of Dues and
Repossession of security.
Member banks are, therefore, required to follow
BCSBI Codes.
A reference is invited to the introductory para in
the Code which clarifies that the Code does not replace
or supersede regulatory or supervisory instructions of
the Reserve Bank of India (RBI) and that banks will
comply with such instructions/directions issued by RBI
from time to time. Provisions of the Code may set higher
standards than what is indicated in the regulatory
instructions and such higher standards will prevail as
the Code represents best practices voluntarily agreed to
by banks as their commitment to customers. |
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2 |
2.1.6 To Publicise The Code We Will:
a. provide you with a copy of
the Code, on request, over the counter or by electronic
communication or mail
b. provide you ( new customer) with a
copy of the Code when you open your account |
As the Code is a large document, portions applicable
to the product opted for may be given to the customer |
The full text of the Code must be given to the
customer as he may avail of different products /
services offered by the bank and he must be made aware
of all his rights. |
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3 |
3.2 'Do Not Call
Service’
When you become our customer, we will
automatically register your name under our 'Do Not Call
' Service. We will not inform/extend to you through
telephone calls/SMS/e-mails any new product /service
unless and until you inform us in writing that you
consent to avail of this information/ service |
Why cannot there be an entry in the DNC only at the
specific instance of the customer?
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The customer is entitled to receive all updated
information on our products / services to enable him
to take a prudent decision.
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It is the responsibility of the bank to inform
the customers also, as to the latest information on
products and services.
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In the era of technology the most convenient way
of marketing is e-mail, telephone, SMS etc. but item
3.2 of the Code says that it should be done only
after seeking specific consent under ‘Do Not Call’
service.
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The underlying principle of the Code is the need for
explicit consent and not implicit consent. The customer
has a right to privacy and should not be taken for
granted.
Member banks can ask the customer to exercise his
option, in writing, as to whether he would like to
receive information about new products / services
offered by the bank over the telephone, through SMS or
e-mail before using these modes for marketing their
products. |
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4 |
3.4.2 Changes in Fees & Charges
If we increase any of these charges
or introduce a new charge, it will be notified one month
prior to the revised charges being levied / becoming
effective. |
The medium through which customers can be intimated
about changes in fees and charges should be included in
the Code. For example: any of the following modes:
i. Notice at the branches
ii. Annexure to the statement of account
iii. Letters
iv. e-mail
v. SMS
vi. Website
vii. Newspaper |
A reference is invited to Para 3.5.1 of the Code
wherein the modes of communicating changes to terms and
conditions have been listed.
Banks need to ensure that changes to terms and
conditions including fees and charges reach the customer
30 days prior to the changes becoming effective. |
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5 |
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Is Email a valid mode of communication for customers
who have given their email ID to the bank for regulatory
purpose - informing that the account is inoperative /
dormant / Nomination confirmation etc |
If a customer has registered an e-mail id with the
bank, communications may be sent to him by e-mail. |
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6 |
4. Advertising, Marketing and Sales
d. We may, from time to time, communicate to you
various features of our products availed by you.
Information about our other products or promotional
offers in respect of our products/services, will be
conveyed to you only if you have given your consent to
receive such information/ service either by mail or by
registering for the same on our website or on our phone
banking/customer service number. |
In spite of DNC registrations, we (the bank) will
continue to intimate changes in product features and
send email/SMS alerts for security purposes. |
Please see clarifications at items 3 & 4 above. |
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7 |
5.1 Credit Reference Agencies
d. If your loan account has
been in default, and thereafter regularised, we will
take steps to update this information with the CRA in
the next monthly report. |
This para needs to be modified to read as “If your
loan account has been in default, and thereafter
regularised, bank will take steps to update this
information as applicable with the CRA in 60 days in
the format as per guidelines issued by CRA/RBI from time
to time |
As per Regulation No.10 (a) (ii) (A) to the Credit
Information Companies (Regulation) Act, 2005 credit
information is to be updated on a monthly basis or at
such shorter intervals as may be mutually agreed upon
between the credit institution and credit information
company. |
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8 |
6. Collection of Dues
Whenever we give loans, we will
explain to you the repayment process by way of amount,
tenure and periodicity of repayment. However, if you do
not adhere to repayment schedule, a defined process in
accordance with the laws of the land will be followed
for recovery of dues. The process will involve reminding
you by sending you notice or by making personal visits
and/ or repossession of security, if any. |
‘Calling and SMS alerts’ should be included as
modes for contacting the borrower. |
It is preferable for the bank, in its own interest,
to send reminders in writing or through personal visits. |
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9 |
6. Collection of dues
b. We will also make
available on request details of the recovery agency
firms/ companies at our branches. |
The provision should be amended to read as “these
details are available on the website and can also
be obtained by writing to the Nodal officer of the Bank.” |
The bank is committed to have details of recovery
agents on their websites. Therefore, if a customer
requests the branch for details of the recovery agency
firms the same can be provided to the customer at the
branch. |
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10 |
8.1.1 Savings/Current Accounts -Statements (a)
a. To help you manage
your account and check entries in it, we will provide
you with a monthly statement of account unless you have
opted for a pass book. |
Banks should have the freedom to decide periodicity
of sending physical statements to customers. However,
the customer can walk into the branch to collect monthly
statements free of cost. |
According to RBI regulations banks must issue monthly
statements of account, free of cost to those customers
who opt for statements of account. |
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11 |
8.1.1 Savings/Current Accounts Statements
e. We will ensure that
entries in your pass book / statements are brief and
intelligible |
Entry of the name of the
payee of a cheque in case of debit entries need not be
entered as the customer is expected to keep a record
of the cheques he issues.
Existing systems do not allow such
entries.
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This is a fraud-prone area and the source of several
complaints. It is, therefore, imperative that member
banks modify their procedures and systems to enter the
name of the payee in the pass book / statements of
account. |
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12 |
8.1.2 Term Deposit
When you place a term deposit
with us, we will
f: obtain Form 15 H / 15 G from you
at the time of application if you are not liable to pay
tax on your interest income. |
The provision may be
modified to read as We will accept Form 15 H / 15
G from you at the time of application if you are not
liable to pay tax on your interest income. Additionally
it needs to be mentioned that:
For FDs booked through Internet
banking/ phone banking the customer will have to walk
into the branch and submit Form 15H/15G |
The bank is committed to explain the IT rules and
obtain Form 15 G /15H, at the time of placement of Term
Deposit.
If a bank is willing to accept an application
for FD through electronic media, it can also transmit
Form 15G / 15 H through internet to the customer to
enable him to submit the same. |
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13 |
8.1.6 Dormant / Inoperative accounts
We will
b. notify the joint holder/s also
before an account is classified as inoperative / dormant |
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How can the bank notify the joint account holders
before an account is classified as dormant, when the
address of the joint account holders are different?
The system only captures the address of the 1st
account holder.
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Is it practically possible to assess any
account as dormant / inoperative or unclaimed three
months in advance? Decision to classify any account
as dormant / inoperative or unclaimed could be taken
only after the expiry of the stipulated period?
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It is important to advise the joint account holder(s)
that the account is proposed to be classified as dormant
/ inoperative. The joint account holder(s) has the power
to operate the account, except if mandated otherwise.
The account opening form should have the
provision for address of the joint account holder(s) and
the system should be enabled to capture contact details
of all the account holders.
Yes.
The Code provides that the account holders be advised
that their account is liable to be classified as dormant
after a period of inoperation of 1 year and 9 months
i.e. three months before the account is classified as
dormant / inoperative. |
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14 |
8.2 Clearing Cycle / Collection Services
b. We will pay you compensation as
per our Cheque Collection / Compensation policy for any
delay in collection of instruments, without waiting for
a demand. |
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With regard to
collection of cheques, it is mandated that the
collecting bank should compensate its customer for delay
in collection. No liability is fixed on the paying bank,
for delay, if any, at its end. The paying bank is
expected to remit the proceeds of the inward instrument
as early as possible, but in any case by the following
day of receipt. Time limit and compensation amount
should be set for delays at the paying bank and such
amount should be remitted voluntarily.
- RBI has instructed that a customer should
not be inconvenienced in any way, just because his
account has been rendered inoperative. In the scenario
of ‘Anywhere banking’ cheques drawn on a dormant
account may be presented at another centre. The non-home
branch may not be able to contact the customer. Hence,
it will be difficult for them to honour the cheque which
may cause inconvenience to the customer.
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A person who deposits a cheque to be collected from
another bank is a ‘customer’ of the
collecting bank. Compensation for delay, must,
therefore, be paid by the collecting bank. The customer
has a relationship with his bank and not with the paying
bank.
In the present CBS environment banks should
keep all details of accounts including phone number(s)
of customer(s) up-to-date so that the data can be
accessed at all branches besides the home branch.
Bankers have to use their discretion and
exercise due diligence while allowing operations in such
accounts. |
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15 |
8.3 Cash Transactions
d. We will reimburse amounts
wrongly debited in failed ATM transactions within a
maximum period of 12 days from the date of receipt of
your complaint. |
While RBI has set a limit of 12 working days for
settling these transactions, many a times there is a
delay beyond 12 working days when the ATM is owned by
some other bank. In such cases, the compensation to be
paid should be shared by the other bank and time limit
for responding to other bank ATM failed transactions
should be specified. |
Compensation should be paid by the card issuing bank
to its customer. The customer has a relationship
with his bank and not with the ATM owning bank. |
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16 |
8.3.1 Direct debits and standing instructions
We will
b. act upon mandates given by you
for direct debits [say Electronic Clearing Service (ECS)]
and other standing instructions. In case of any delay or
failure in executing the mandate resulting in financial
loss or additional cost, we will compensate as per the
compensation policy of the bank. If the mandate cannot
be executed due to insufficient balance in your account,
we will levy charges as per the Tariff Schedule as
amended from time to time |
In case of pensioners’ account Life Certificate is
obtained during November every year. In the event of
death of pensioner say during December and bank not
being informed, the bank shall continue to pay pension
till October (till due date for next Life Certificate).
Standing Instructions accepted under such accounts will
allow transfer of funds even after death of the
pensioner. Pension paid after death cannot be recovered
under such circumstances. |
“The paying branch before commencement of pension
obtains an undertaking from the pensioner in the
prescribed form for this purpose and therefore, can
recover the excess payment made to the pensioner's
account due to delay in receipt of any material
information or due to any bonafide error. The bank has
also right to recover the excess amount of pension
credited to the deceased pensioner’s account from his/
her legal heirs/nominees.” (c.f http://www.rbi.org.in/scripts/FAQView.aspx?Id=68) |
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17 |
8.9 Foreign Exchange Services
f. In case of delay beyond the day when
the amount is due for credit, you will be compensated
(a) for any loss on account of interest for due period
beyond the due date and (b) also for adverse movement of
forex rate as per the Compensation Policy of the bank. |
Compensation would be
paid provided the beneficiary details are correctly
mentioned by the remitting bank |
The beneficiary of the remittance is a customer of
the receiving bank. Compensation for delay, must,
therefore, be paid by the receiving bank. The customer
has a relationship with his bank and not with the
remitting bank. The receiving bank has to make efforts
to ascertain correct beneficiary details. |
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18 |
8.11.1 Loan products Applications for loans and their
processing
c. We will give you the
Most Important Terms and Conditions (MITC) governing the
loan / credit facility you have availed. |
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The various terms of the loan are provided to the
loan applicants while applying for a loan and also
clearly indicated on the sanction letter which is
accepted by the applicant / borrower. In view of the
above the MITCs may not be insisted upon
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BCSBI may prescribe a format of MITC so that
uniformity is maintained and to avoid subjectivity
between most important and important terms of loan
sanctioned.
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The MITC must necessarily contain the most important
terms and conditions including those which affect the
customer adversely.
The sanction letter may not contain
all terms and conditions of the loan. Some conditions
may form part of the loan agreement. The Most Important
Terms and Conditions may, therefore, be listed
separately.
Banks should be able to decide the most
important terms and conditions for each of their
products. Terms and conditions of similar products may
differ from bank to bank. |
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19 |
8.11.1 Loan Products Applications for loans and their
processing
l. We will compensate you for any
delay in return of securities / documents / title deeds
to mortgaged property beyond 15 days of the repayment of
all dues agreed to or contracted. |
Compliance with the provision may not be possible
under the following circumstances:
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A third party makes final payment and the
mortgager does not claim the document;
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Documents have been mutilated / destroyed
due to natural calamity;
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The account is closed by intervention of
Courts and there is a delay in receipt of the title
deeds from the Courts.
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The mortgager should be advised to collect the
documents.
The bank should compensate the borrower and assist
the customer in obtaining duplicate documents.
Courts have to be made aware of the Code commitment
and compensation has to be paid for the delay. |
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20 |
8.14.3 Credit Card Statements
a. To help you manage
your credit card account and check details of
purchases/cash drawings using the credit card, we will
offer you free of cost a facility to receive credit card
transaction details either via monthly mail and, if you
so desire, also through the Internet. Credit card
statement will be dispatched on a predetermined date of
every month free of cost at your mailing address |
Some banks may choose not to send
statements in following scenarios-
1) In case no transactions or outstandings
are involved
2) In cases after sending the statements
the customer is delinquent for over 180 days
3) For oustandings below Rs. 100 |
Item No. 1 has been noted for consideration at the
appropriate time.
Credit card statements are required to be sent in the
case of scenarios 2 & 3. |
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21 |
8.14.3 Credit Card Statements
c. We will let you know /
notify changes in schedule of fees and charges and terms
and conditions. Normally, changes (other than interest
rates and those which are a result of regulatory
requirements) will be made with prospective effect
giving notice of at least one month. The changes will be
notified along with the monthly statement of account or
copy thereof |
Besides monthly statement we can let a customer know
of changes through emails or SMS or letters. However it
is also the customer’s responsibility to have latest
address/mobile number and email id updated with the bank |
A reference is invited to para 3.5.1 - Changes in
terms and conditions. (Account statements is one of the
modes) |
