The decision of the Reserve Bank of India to permit the sub-agents or a retail outlet of business correspondents to serve customers of more than one bank would invite more trouble to the banking industry, literally undermining its present set up itself, alleged Mr K.S. Bhatt, national secretary of the Syndicate Bank Staff Association (SBSA), an affiliate of National Organisation of Bank Workers (NOBW).
In a statement issued here on Friday, Mr Bhatt alleged that the RBI move lacked far-sightedness, making it more or less a fiasco.
The SBSA leader alleged that the RBI decision was a superfluous step which would lead to incorrigible frauds in the banking sector, besides inviting unhealthy competition among bankers. If the business correspondents were allowed to tie up with more than one bank, there would be laxity at all levels, he added.
Mr Bhatt said RBI should also take into account that a good number of banks were still in a primary stage as far as core banking solution was concerned and many of them have not even updated their technology.
Customers too would find it difficult to identify the bank with which they have made the transactions as they knew only the banking correspondent or his agent. The present relationship between the banker and customer would become a myth and only the banking correspondents would identify the clientele. It would also lead to large scale maneuvering in the banking sector, Mr Bhatt alleged.
As the RBI guidelines, banks would be fully responsible for the actions of the banking correspondents as well as their retail outlets and sub agents. All these aspects should be taken into account before permitting the business correspondents to have multiple services, he said.