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Chairman’s Opening Remarks
at the
First Annual General Meeting of the
Banking Codes and Standards Board of India
[ June 07, 2007 on the Occassion of General Meeting of the
Banking Codes and Standards
Board of India at Mumbai ]
Ladies & Gentlemen,
It gives me great pleasure to welcome you all to the First
Annual General Meeting of the Banking Codes and Standards Board of India (BCSBI).
At the outset permit me to introduce to you the members of the Governing Council
of the BCSBI who have been nominated by the RBI for a term of three years from
February 2006.
The BCSBI is, in several ways, a unique institution. It has
been jointly promoted by the RBI and eleven banks-public, private and foreign.
Also, for the first time there exists an organisation to evaluate and oversee
implementation of the Code of Bank’s Commitment to
Customers, more by way of collaborative approach with banks rather than
use of penal action. The Code itself has been evolved by the BCSBI together with
the Indian Banks’ Association (IBA) and the RBI and has been adopted
voluntarily by banks seeking to be members of BCSBI. It is heartening that 69
banks covering 98 per cent of the activity of scheduled commercial banks are
members of the BCSBI. Scheduled Urban co-op. Banks too, have evinced interest in
becoming members.
The Reserve Bank has made improved customer service to the
common man as its’ topmost priority and has spent crores of rupees, in
advertising the full text of the Code in leading dailies in Hindi, English and
12 regional languages. Against this backdrop it is unfortunate that distribution
of the Code, which was released on July 1, 2006, is clearly unsatisfactory.
Apart from a couple of new generation private sector banks and foreign banks
which have made serious attempts at dissemination, there are no signs of the
others having made any serious efforts to provide their customers with the Code
- which is the customers’ Charter of Rights. I would, therefore, urge member
banks to take up the issue of distribution of the Code to your customers in
right earnest and ensure that there is total compliance in this matter during
the course of the current financial year.
An issue on which certain member banks (private sector banks
and foreign banks) have indicated difficulties in complying with the Code
provisions relates to telemarketing. The IBA is now in dialogue with the Telecom
Regulatory Authority on evolving a suitable software package to ensure that
customers are not subjected to telemarketing calls. Other than the issues of
distribution and telemarketing, member banks have not expressed any difficulties
in implementation of the Code. Nevertheless, if member banks do wish to discuss
implementation issues the BCSBI is always open to dialogue. I may mention that,
at the request of the IBA, I have met the members of the IBA Managing Committee
in September 2006 and we at BCSBI have been meeting Chairmen and other top
executives continuously so as to maintain the dialogue.
We have commenced field visits to ascertain the status of
implementation of the Code in the four Metros. The interim feedback is not
encouraging. It confirms that only some of the new generation private sector
banks and foreign banks are taking steps in earnest to distribute the Code and
bring about transparency in their fees and charges. Regrettably, the majority of
the banks are yet to undertake this exercise in any significant manner. One
could surely expect that, initially, banks should have completed dissemination
of the Code to customers at least in the Metros and cities where the bank’s
headquarters are located. If there is a lack of compliance in the Headquarters
itself, it is unlikely that there would be compliance in other parts of the
country. While I recognise that complete dissemination to existing customers
through the length and breadth of the country does take time, there should be
visible signs of action in earnest. I would urge each bank to draw up a PERT
chart setting out the dissemination progress.
Members ought to seize the opportunity to bring about a
fundamental change in their overall approach to customer service, through
collaboration and co-operation with the BCSBI, rather than face regulatory
action.
In the year 2007-08 it would be our endeavour to see that
member banks are compliant with all the provisions of the Code. In addition, we
would be working towards evolving a Code for Small and Medium Enterprises (SMEs)
so that alongwith the common man, SMEs can also look forward to minimum
standards of banking services and increased transparency in banks’ dealings
with them.
It is hoped that 2007-08 will see banks taking bigger strides
in meeting customer service standards especially with regard to transparency,
reasonableness of charges, security repossession procedures etc.
We at BCSBI are optimistic that as we journey forward,
members will not hesitate to continuously dialogue with us so that together we
can rectify the systemic gaps and deficiencies in ensuring hassle-free banking
service to the common man.
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