JAIIB PPB Paper-2 Module-A Unit 17: Customer Service Guidelines

06/03/2023

JAIIB Paper 2 (PPB) Module A Unit 17: Customer Service Guidelines (New Syllabus)

The Institute of Indian Banking and Finance (IIBF) recently announced the updated syllabus and exam pattern for the JAIIB Exam 2023. The JAIIB 2023 will include four papers, with Paper 2 (Principles & Practices of Banking) covering Unit 17: Customer Service Guidelines. This unit is crucial for candidates to understand thoroughly as it will impact their performance in the exam.

To aid candidates in comprehending the topic, we will provide all necessary details related to Unit 17: Customer Service Guidelines of JAIIB Paper 2 (PPB) Module A: General Banking Operations. We highly recommend candidates refer to this article and use our Online Mock Test Series to improve their knowledge of Foreign Currency Accounts for Residents and Other Aspects.

For JAIIB Certification Examination 2023 candidates, understanding each unit in the syllabus, including the Marketing unit, is critical. This unit is essential in the banking industry, and candidates must prepare adequately to excel in the exam and establish a successful career in the banking sector.

Customer Service

The Reserve Bank of India has set up a six-member committee headed by former Deputy Governor, B. P. Kanungo, to review customer service standards in entities regulated by it, in May, 2022.
The committee will evaluate the efficacy, adequacy and quality of customer service in regulated entities (REs) vis-à-vis the existing RBI guidelines on customer service, identify gaps, if any, and suggest measures to improve customer service.
The committee will also review the evolving needs of the customer service landscape, especially in the context of digital/electronic financial products and distribution landscape and suggest suitable regulatory measures.

Customer Service in Banks

Customer Service: Organisational Framework

RBI has emphasized that matters relating to customer service should be deliberated by the Board. Boards need to review customer service aspects in the bank. So a detailed memorandum should be submitted to BoD, once every six months. Prescribed institutional set up for banks includes:

Customer Service Committee of the Board
Standing Committee on Customer Service
Branch Level Customer Service Committees
Nodal department/ official for customer service

Customer Service In Banks: Committees

RBI has emphasized that matters relating to customer service should be deliberated by the Board. Boards need to review customer service aspects in the bank. So a detailed memorandum should be submitted to BoD, once every six months.
Banks are required to have a Customer Service Committee of the Board (CSSB), to which experts and representatives of customers should be invitees, to enable formulating policies and assess the compliance there of, and also ongoing improvements in the quality of customer service.
The Committee on Procedures and Performance Audit of Public Services (CPPAPS) recommended that banks have a permanent Standing Committee on Customer Service that should be a dedicated focal point for customer service and have sufficient powers to evaluate the functioning in various departments.
There should be Branch Level Customer Service Committees. These should include at least a senior citizen. It should meet at least once a month to study complaints/ suggestions, cases of delay; difficulties faced by customers/ members of the Committee and evolve ways and means of improving customer service. The branch level committees should submit quarterly reports giving inputs/ suggestions to the Standing Committee on Customer Service, and provide relevant feedback for necessary policy/ procedural action.
Each bank should have a nodal department/ official for customer service in the Head Office and each controlling office, with whom customers with grievances can approach in the first instance and with whom the Ombudsman and RBI can liaise.

Board Approved Policies On Customer Service

Comprehensive Deposit Policy

It sets out the rights of the depositors in general and small depositors in particular. The policy should cover all aspects of operations of deposit accounts, charges leviable and other related issues to facilitate interaction of depositors at branch levels. It should also be explicit in regard to secrecy and confidentiality of the customers.

Cheque Collection Policy

Banks should have a comprehensive and transparent policy on collection of cheques for that should cover the following three aspects:

Immediate credit for local/ outstation cheques
Time frame for collection of local/ outstation instruments
Interest payment for delayed collection.

Customer Compensation Policy

Banks must have a Customer Compensation Policy that could be based on the model policy of IBA. It should cover following aspects:

Erroneous debits due to fraudulent or other transactions
Payment of interest for delays in collection
Payment of interest for delay in issue of duplicate draft
Other unauthorised actions of the bank leading to a financial loss to customer.

Customer Grievance Redressal Policy

Banks must have a well-documented Customer Grievance Redressal Policy.

Policy For General Management Of The Branches

Banks should have Board approved policy for general management of the branches covering:

Infrastructure facilities at branches (adequate space, proper furniture, drinking water, facilities for pensioners/ senior citizens/ disabled persons, clean environment, etc.).
Enquiry counters at large/ bigger branches in addition to reception counter.
Multi-lingual indicator boards at all the counters.
Roving officials to ensure responsiveness of employees, and helping customers in their transactions.
Providing multilingual booklets on services and facilities.
Use of Hindi and regional languages in transacting business with customers.
Reviewing and improving the security system.
Branch staff training with customer service orientation.
Periodical visits by senior officials from Controlling/ Head Office for on the spot study.
Customer service audit, Customer surveys.
Holding Customer relation programmes and periodical meetings to interact with different cross sections of customers.
Having a New Product and Services Approval Process that stipulates Board approval on issues which compromise the rights of the Common Person.
Appointing Quality Assurance Officers to ensure that the policy is translated into proper procedures.

ATM Operations

Free transactions in ATM

Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres.

Transactions at ATM – Pin Validation for Every Successive Transaction:

The process should require pin validation for every transaction, including balance enquiry through ATM. Also, the time-out of sessions should be enabled for all screens/ stages.

Lodging of ATM related Complaints

At all ATM kiosks banks must display:

Telephone numbers of help desk/ contact persons of the ATM owning bank to lodge complaint/ seek assistance
Uniform Template prescribed by RBI for lodging of complaints relating to ATM transactions.

Measures to enhance efficiency in ATM operations

Message of non-availability of cash to be displayed, before transaction initiation on screen
To display ATM-ID in the ATM premises
Complaint forms with name and phone number of the officials, to be available at ATM
Sufficient toll-free phone numbers for lodging complaints/ reporting and blocking lost cards
Mobile numbers/ e-mail IDs of the customers be registered to send alerts
To inform customers failed ATM transaction complaints must be lodged with the card issuing bank, for all failed transactions.

Scheme of Penalty for non-replenishment of ATMs

Cash-out at any ATM of more than ten hours in a month attracts a flat penalty of Rs. 10,000/- per ATM. In case of WLAs, the penalty is charged to the bank meeting cash requirement of that WLA. Bank may recover the penalty from the WLA operator.

Disputes regarding ATM failed transactions

These shall be settled by the issuing bank and the acquiring bank through the ATM System Provider only. No bilateral settlement arrangement outside the dispute resolution mechanism of the system provider is permissible. This is meant to avoid disputes between the issuing and acquiring banks in payment of compensation.

Reconciliation of transactions at ATMs failure – Time limit

RBI has advised banks to resolve customer complaints regarding wrongful debit on account of ATM transactions within T+5 working days of receipt of customer complaint. In case of delay the card issuing bank must compensate the customer Rs. 100/- per day of delay. This amount shall be credited to the customer’s account automatically without any claim from the customer.

Security Issues and Risk Mitigation Measures

Online alerts for usage of credit/debit cards
Card Not Present (CNP) transactions
Electronic Payment Transactions
Limiting Liability of Customers in Unauthorised Electronic Banking Transactions

Service At Counters

Business and working hours:

Employees should be at their seats at the commencement of business hours. Following regular hours and continuous availability of counter services is basic requirement. Following norms need to be followed in respect of business and working hours.

Reporting Time of Staff: For starting exactly at the commencement of business hours, the working hours of staff is fixed 15 minutes earlier, especially at metropolitan and urban centres.
Business Hours: Branches are required to function for public at least 4 hours on week days and working Saturdays.
Banking Timing: No particular banking hours have been prescribed. A bank may fix business hours for its branches at its discretion.
Rural Branches: The branches in rural areas can fix the business hours and the weekly holidays to suit local requirements.
Legal Provisions: Other relevant local laws Shops and Establishment Act, etc. and obligations, to staff under the Industrial Awards/ Settlements need to be observed.
Uninterrupted Service: No counter should remain unattended during the business hours for uninterrupted service.
Declaration of Holiday under the Negotiable Instruments Act, 1881: In terms of Section 25 of the NI Act, the expression “public holiday” includes Sunday and any other day declared by the Central Government by notification in the Official Gazette to be a public holiday.

Information To The Customers

Comprehensive Notice Board by branches
Booklets/Brochures
Display on Website
Other Modes of Display
Information relating to Interest Rates and Service Charges
Information in public domain
Timeline for credit decisions
Service Charges
Customer Education

Special Arrangements At Branches

Provision of ramps at ATMs/ branches
Facility to sick/ old /incapacitated account holders
Providing banking facilities to Visually Impaired Persons
Talking ATMs with Braille keypads – Persons with visual impairment
Opening/ operating bank accounts of Persons with Autism, Cerebral Palsy, Mental Retardation, Mental Illness and Mental Disabilities