Banking Codes and Standards Board of India (BCSBI) was set up in February 2006 as a collaborative effort by the Reserve Bank of India (RBI), the Indian Banks’ Association (IBA) and banks to define benchmarks for banking services. Accordingly, BCSBI had evolved two codes — the Code of Bank’s Commitment to Customers and the Code of Bank’s Commitment to Micro and Small Enterprises. Anand Aras, CEO, BCSBI, spoke about them.
How are the banking codes different from norms?
Reserve Bank of India issues regulatory instructions to banks on various matters, including customer service. The codes are a voluntarily declared commitment, as a self regulation, of member-banks to their customers explaining how they will deal with their customers in their day-to-day operations. The codes complement regulatory guidelines. They do not replace or supersede regulatory guidelines.
Why did building awareness among customers become your primary motive?
Our primary objective is to evolve the codes and ensure that member-banks comply to the codes. However, as mentioned earlier, codes explain how banks will deal with their customers in their day-to-day operations. You will appreciate that for [the] implementation of code in its true spirit and effectively, it is necessary that both, the bank staff as service provider and the bank customers as service receiver, need to be aware of it. Thus, BCSBI is making efforts to create and enhance awareness about codes among the customers. Moreover, Codes enshrine rights of banks’ customers in the form of commitments by banks to their customer. In a way, creating awareness about Code is creating awareness about their rights and about what their banks have committed to them.
Is there any specific code for senior citizens?
There is no separate code for senior citizen but the Code of Bank’s Commitment to Customers contains a dedicated section for senior citizen and differently-abled customers of banks. The focus of provisions covered under this section is on ease of availing banking services in a rightful manner. This also contains a specific reference to commitments of member-banks to senior citizens and the recent additional facility of doorstep banking extended to senior citizens [of] 70 years and above.
Some of the facilities extended are personalized services for banking transactions and grievance redressal, convenient physical access to branches and ATMs, seating arrangement in the main banking hall, single window mechanism at branches, acceptance of life certificate at any branch of the Bank, and door step banking for senior citizens above 70 years of age etc.
Have you been getting many complaints from customers?
Although we are not a grievance redressal body, customers do write to us in case of a grievance. We only take up cases which involve a systemic issue or non adherence to the codes. In cases involving a systemic issue, we do a root cause analysis of the complaints and offer our suggestions to the member banks for measures to improve on the service or product.
What is the level of code compliance by banks?
The codes developed by BCSBI are a commitment of our member-banks to their individual and micro and small enterprise customers, representing the best practices voluntarily agreed to by them. Similarly, Code of Bank’s Commitment to Customers, (revised in January 2018) is in essence a charter of rights of the individual customers. Thus, looking at its nature, it may be difficult to indicate level of code compliance in a comparative term. Notwithstanding, I would like to inform you, as a part of onsite monitoring of implementation of codes, BCSBI periodically, conducts visits to branches of member banks and verifies compliance of some of the important code provisions. The output of branch visits is used to derive a bank-wise indicator of level of Code compliance for which BCSBI has developed a rating model with technical assistance from CRISIL. The last such exercise was undertaken in the year 2016-17 when it was found that overall Code compliance in private banks was somewhat better than public sector banks. It may be noted that the rating of banks on Code compliance is a limited exercise of verification of compliance of important Code provisions at bank branches. It does not cover other aspects relevant to customer service like behavior aspects, turnaround time for specific transactions and also customer satisfaction level.
What are the areas that particularly need improvement for better banking standards delivery to customers?
The parameters identified for the verification of code compliance at branches, in the branch visits as indicated above, are grouped into five broad segments. These groups are Information Dissemination, Transparency, Customer Centricity, Grievance Redressal and Customer feedback. It has been found that there is further need of improvement in the implementation of the parameters grouped into the segment of Information dissemination and Transparency, though the average score under these segments was above 70. The reasons could vary from bank to bank, but in general, there is a need for strengthening awareness about relevant code commitments and their importance among the staff at bank branches. The banks, particularly public sector banks, need to strengthen their monitoring and training systems coupled with an element of accountability.
What are the changes you have seen in the standards of customer service and code compliance over the years?
The codes set minimum standards of banking practices that member-banks have to follow. Further, codes are reviewed periodically, keeping in view the need to raise the standards of banking service in alignment with the growing expectations of the consumers of these services. Besides, one of the objectives of the code is to encourage market forces, through competition, to achieve higher operating standards. This is possible with improvement in implementation of Code provisions grouped through better Information dissemination and Transparency, as they enable the customer to compare features and cost of products and services offered by different banks and chose the best one which suits one’s requirement. Thus, over a period, with the improvement in the implementation of the codes, we have been witnessing some improvement in quality of customer service in banks. Furthermore, electronic banking has enabled the customer to transact with ease and at his convenience.
As far as implementation of the Codes, particularly those which are grouped into Information dissemination and Transparency, it has been noticed that there has been greater use of technology for implementation of the Codes under these two groups. Banks are using the telecom systems and engaging with their customers through SMS alerts/ messaging with regards to transaction details and important changes in the terms and conditions related to their accounts. These are the changes we are witnessing over the last couple of years.
Have you recently modified the codes?
The Charter of Customer Rights has been integrated with Key Commitments of the Codes to make it comprehensive. Operational changes have been captured. Also, all the relevant RBI guidelines pertaining to customer service are taken note of. These provisions increase the awareness of the customers, about their rights and explains to the customers how they should take care of their accounts in the wake of increasing digitisation, by following proper “dos and don’ts” and how to stay protected from payment-related frauds.
What are the different initiatives that you are using to create awareness among customers?
BCSBI has been endeavouring to enhance awareness about the codes to customers through various means. BCSBI has been organising customer meets at different parts of country and also participating in customer awareness programmes organized by Banking Ombudsman Offices of RBI as also by member banks. Over a period of last 4 years, BCSBI has either conducted or participated in around 190 such meetings/workshops/seminars/ conferences
BCSBI is publishing a quarterly newsletter “Customer Matters”. The primary objective of the newsletter is to educate and disseminate information/decisions of the Banking Ombudsmen in the areas of complaints and regulatory developments relevant to retail and micro and small enterprise customers. The news letter contains matters of interest to customers specifically under a regular column “Theme of the Quarter” apart from other topics and news items.
BCSBI has prepared a pictorial booklet, particularly for the benefit of newly added customers of banks under Jan Dhan Yojana and Basic Savings Bank Deposit Account (BSBDA) to make them aware about some of the basic but important code provisions from their view point. The same is released in five languages and BCSBI has requested member banks to print and circulate the copies amongst their customers.
BCSBI has recently advised public sector and private sector member-banks to conduct a minimum of 15 customer awareness meetings in a year based on their branch network to update customer on their rights and understanding the grievance redressal mechanism. Hopefully, these initiatives should help in creating awareness amongst the mass banking population about their rights and taking up their issues/grievances with their respective banks
