Reserve Bank of India’s regulatory prescription makes it difficult for new proprietary concerns to open accounts with banks before being registered / licensed / certified by the appropriate authority.

The regulatory requirements need to be complied with.

11

In terms of Para 8.11.1(l) of the Code of Bank’s Commitment to Customers, compensation is to be paid if securities/ title deeds in respect of advance accounts closed are not returned within 15 days. It is suggested that IBA may formulate a model policy on the amount of compensation payable on the lines of compensation payable in case of delayed collection of cheques, so that member banks can adopt the same.

IBA has evolved a Model Compensation Policy and banks are free to quantify the compensation payable thereunder.

12

“The prescription of writing to individual customers regarding the changes in interest rates can be deleted. The information can be put on the website and made available in the customer information booklet at the branches.

It may be noted that giving information individually to all customers may not be practically feasible. There is a need therefore to evolve a via media to ensure that customers get the needed information while the Bank is able to perform its obligations devoid of operational hassles.”

Please see Para 3.3.1 - Changes in interest rates of the Code of Bank’s Commitment to Customers.

Most customers do not have access /easy access to the bank’s website and in the interest of maintaining transparency in their dealings it is in the bank’s interest to notify changes in interest rates in such a manner that will be accessible to all customers.

13

“In compliance with RBI guidelines banks exhibit ‘Schedule of Service Charges’ on the public domain (websites) giving 30 days notice to public before the same is implemented. Even then the complaints are received from the customer regarding non-serving of notice. We suggest that such notice on public domain - website may be treated as notice given to customers and RBI not take cognizance of complaints from customers for banks not serving individual notices.”

Please see Para 3.5.1 of the Code of Bank’s Commitment to Customers – 2009. While banks are free to communicate changes through any one or more of the channels indicated therein, it would be in the spirit of their commitment to transparency for them to notify the change at least on the notice board in each branch as not all customers have access to the bank’s website.

14

“The current stipulation of advising customers of changes in terms and conditions one month in advance may be reduced to 15 days, keeping in view the evolving changes in the industry.”

Noted.

15

“The information relating to role of credit reference agencies and also the checks the banks will undertake can be disseminated through the website and in the customer information booklet available at the branches.”

The suggestion is not in tune with the spirit behind the bank’s commitment as contained in Para 5.1 (a) of the Code of Bank’s Commitment to Customers -2009and is, therefore, not acceptable.

16

Current system of issue of pass book as well as monthly statement of account may not be insisted upon.

There is no such insistence. Banks are required to provide either Statement of Account or Passbook as per requirement of the customer.

17

The location of the bank’s branch in posh localities and the tight security in these buildings render these branches inaccessible to the common man, making it difficult for the bank to open ‘No Frills Accounts’.

Para 8.3.1 of the Code of Bank’s Commitment to Customers – 2009 provides that the bank shall make available a basic banking facility to any customer who seeks this facility. What is important is that banks do not refuse to open such accounts.

18

Obtaining consent of customers to indicate the name of the nominee in pass books / statements is proving difficult and moreover, it brings no additional benefit to the customer. Indication of the name of the nominee may not be insisted upon.

There is no such insistence. Please see para 8.1 .c of the Code of Bank’s Commitment to Customers, 2009. Banks are required to indicate the name of the nominee only at customers’ request.

19

Banks should be exempted from informing ‘dormant status’ of accounts to NRI clients

This is a regulatory requirement.

20

When there is a reduction in credit card limits, rather than follow-up an SMS/e-mail by a confirmation in writing, it should suffice if it is conveyed in the statement which goes to the customer every month.

The modus operandi suggested by the bank is in conformity with para 8.14.2.e of the Code of Bank’s Commitment to Customers, 2009.

21

“As per the Code banks need to obtain written confirmation from customer on the Insurance sales. But now with the introduction of 3D authentication with additional password, the requirement should be reviewed.”

Debiting customers’ account merely on the basis of telephonic discussions (even if it is  recorded by the bank) is not acceptable. Any other mode, where customers’ consent is obtained in writing or through electronic means wherein the system provides for additional authentication / validation based on information specifically provided by the customer is acceptable.

22

“All banks have a Record Maintenance Policy. Sometime a customer raises an issue pertaining to a period for which even the records have been destroyed as per prescribed time norms. Despite best efforts, in the absence of record, grievance of complainant remains unresolved.

We suggest that there should be a limitation period within which the complainant may be allowed to raise issues.”

Please see Para 8.18 of the Code of Bank’s Commitment to Customers.

23

As per para 9.1 of Code, banks need to install CCTV for close surveillance as part of security arrangements. This may not be required at Rural and smaller towns.

It is for the banks to assess the security environment of their offices and determine their need to install CCTV for surveillance.

24

“In cases where there is delay in collection of cheques for reasons attributable to drawee banks and interest for delayed period is to be paid, to customers by collecting banks, drawee bank must compensate the same to the collecting bankers while remitting the realization proceeds.”

The underlying principle is that the customer should not be put to inconvenience. Therefore, compensation will have to be paid by the collecting bank and any amount payable as a result of delay on the part of the paying bank may be claimed by the collecting bank and the matter settled between the two banks concerned.

25

“Reimbursement on account of failed ATM transactions - Bank should pay the customer @ Rs.100 per day of delay beyond 12 working days - In case of transactions failed on other bank ATMs, there should be a clear guideline that the ATM owning bank should automatically pay the penalty amount to the account maintaining bank if there is delay beyond 12 days since the existing instruction does not lay emphasis on this issue.”

The underlying principle is that the customer must not be made to suffer for no fault of his. It is clear, therefore, that the card issuing bank is required to compensate its customer and settle the matter separately with the ATM owning bank..

26

“Quantum of penalty for non / short dispensation of cash through Debit Card / ATM Card may be reviewed. In some cases the penalty is higher than the amount of the transaction. Compensation rate is not linked to the original transaction amount in respect of non / short dispensing of cash through Debit Card / ATM Card. e.g. for a small transaction of Rs. 100/-, the compensation @ Rs. 100/- per day is exorbitant. It is suggested that compensation clause be suitably amended and may be linked to :

FD interest or bank rate applicable for the period of delay; or

Maximum of transaction amount; whichever is lower.”

These penalties have been prescribed by RBI to ensure quick redressal of such complaints by banks