JAIIB RBWM Paper-4 Module-C Unit 5: Service Standards for Retail Banking

The contents covered in the Fair Practices Code are also covered in the BCSBI Code. BCSBI member banks are required to follow, practice and provide information on both the codes to customers. Branches are often getting confused.

• Bankers’ Fair Practice Code
• Fair Practice Code for Credit Card Operations
• Model Code for Collection of Dues and Repossession of security.

Member banks are, therefore, required to follow BCSBI Codes.

A reference is invited to the introductory para in the Code which clarifies that the Code does not replace or supersede regulatory or supervisory instructions of the Reserve Bank of India (RBI) and that banks will comply with such instructions/directions issued by RBI from time to time. Provisions of the Code may set higher standards than what is indicated in the regulatory instructions and such higher standards will prevail as the Code represents best practices voluntarily agreed to by banks as their commitment to customers.

a. provide you with a copy of the Code, on request, over the counter or by electronic communication or mail
b. provide you ( new customer) with a copy of the Code when you open your account

When you become our customer, we will automatically register your name under our ‘Do Not Call ‘ Service. We will not inform/extend to you through telephone calls/SMS/e-mails any new product /service unless and until you inform us in writing that you consent to avail of this information/ service

i)The customer is entitled to receive all updated information on our products / services to enable him to take a prudent decision.

ii)It is the responsibility of the bank to inform the customers also, as to the latest information on products and services.

iii)In the era of technology the most convenient way of marketing is e-mail, telephone, SMS etc. but item 3.2 of the Code says that it should be done only after seeking specific consent under ‘Do Not Call’ service.

Member banks can ask the customer to exercise his option, in writing, as to whether he would like to receive information about new products / services offered by the bank over the telephone, through SMS or e-mail before using these modes for marketing their products.

If we increase any of these charges or introduce a new charge, it will be notified one month prior to the revised charges being levied / becoming effective.

i. Notice at the branches
ii. Annexure to the statement of account
iii.Letters
iv.e-mail
v.SMS
vi.Website
vii. Newspaper

Banks need to ensure that changes to terms and conditions including fees and charges reach the customer 30 days prior to the changes becoming effective.

d. We may, from time to time, communicate to you various features of our products availed by you. Information about our other products or promotional offers in respect of our products/services, will be conveyed to you only if you have given your consent to receive such information/ service either by mail or by registering for the same on our website or on our phone banking/customer service number.

d. If your loan account has been in default, and thereafter regularised, we will take steps to update this information with the CRA in the next monthly report.

Whenever we give loans, we will explain to you the repayment process by way of amount, tenure and periodicity of repayment. However, if you do not adhere to repayment schedule, a defined process in accordance with the laws of the land will be followed for recovery of dues. The process will involve reminding you by sending you notice or by making personal visits and/ or repossession of security, if any.

 b. We will also make available on request details of the recovery agency firms/ companies at our branches.

 a. To help you manage your account and check entries in it, we will provide you with a monthly statement of account unless you have opted for a pass book.

 e. We will ensure that entries in your pass book / statements are brief and intelligible

ii)Existing systems do not allow such entries.

When you place a term deposit with us, we will

f: obtain Form 15 H / 15 G from you at the time of application if you are not liable to pay tax on your interest income.

For FDs booked through Internet banking/ phone banking the customer will have to walk into the branch and submit Form 15H/15G

If a bank is willing to accept an application for FD through electronic media, it can also transmit Form 15G / 15 H through internet to the customer to enable him to submit the same.

ii) Is it practically possible to assess any account as dormant / inoperative or unclaimed three months in advance? Decision to classify any account as dormant / inoperative or unclaimed could be taken only after the expiry of the stipulated period?

The account opening form should have the provision for address of the joint account holder(s) and the system should be enabled to capture contact details of all the account holders.

Yes.

The Code provides that the account holders be advised that their account is liable to be classified as dormant after a period of inoperation of 1 year and 9 months i.e. three months before the account is classified as dormant / inoperative.

ii)RBI has instructed that a customer should not be inconvenienced in any way, just because his account has been rendered inoperative. In the scenario of ‘Anywhere banking’ cheques drawn on a dormant account may be presented at another centre. The non-home branch may not be able to contact the customer. Hence, it will be difficult for them to honour the cheque which may cause inconvenience to the customer.

In the present CBS environment banks should keep all details of accounts including phone number(s) of customer(s) up-to-date so that the data can be accessed at all branches besides the home branch.

Bankers have to use their discretion and exercise due diligence while allowing operations in such accounts.

d. We will reimburse amounts wrongly debited in failed ATM transactions within a maximum period of 12 days from the date of receipt of your complaint.

f. In case of delay beyond the day when the amount is due for credit, you will be compensated (a) for any loss on account of interest for due period beyond the due date and (b) also for adverse movement of forex rate as per the Compensation Policy of the bank.

 c. We will give you the Most Important Terms and Conditions (MITC) governing the loan / credit facility you have availed.

ii)BCSBI may prescribe a format of MITC so that uniformity is maintained and to avoid subjectivity between most important and important terms of loan sanctioned.

The sanction letter may not contain all terms and conditions of the loan. Some conditions may form part of the loan agreement. The Most Important Terms and Conditions may, therefore, be listed separately.

Banks should be able to decide the most important terms and conditions for each of their products. Terms and conditions of similar products may differ from bank to bank.

l. We will compensate you for any delay in return of securities / documents / title deeds to mortgaged property beyond 15 days of the repayment of all dues agreed to or contracted.

i) A third party makes final payment and the mortgager does not claim the document;

ii)Documents have been mutilated / destroyed due to natural calamity;

iii)The account is closed by intervention of Courts and there is a delay in receipt of the title deeds from the Courts.

The bank should compensate the borrower and assist the customer in obtaining duplicate documents.

Courts have to be made aware of the Code commitment and compensation has to be paid for the delay.

 a. To help you manage your credit card account and check details of purchases/cash drawings using the credit card, we will offer you free of cost a facility to receive credit card transaction details either via monthly mail and, if you so desire, also through the Internet. Credit card statement will be dispatched on a predetermined date of every month free of cost at your mailing address

1) In case no transactions or outstandings are involved

2) In cases after sending the statements the customer is delinquent for over 180 days

3) For oustandings below Rs. 100

Credit card statements are required to be sent in the case of scenarios 2 & 3.

c. We will let you know / notify changes in schedule of fees and charges and terms and conditions. Normally, changes (other than interest rates and those which are a result of regulatory requirements) will be made with prospective effect giving notice of at least one month. The changes will be notified along with the monthly statement of account or copy thereof

• Do we need to obtain a separate nomination for FDR.
• Whether position will change when the account is opened with sweep facility.

When an account is opened with sweep facility the application form itself should clearly specify the position regarding nominee for the deposit.

Banks may please note that a visually impaired person may be able to sign documents just like other customers.

• Trainers’ training: The faculties of training institutes of banks can be trained by BCSBI
• BCSBI can also introduce a system of accreditation for proficiency in customer service like NCFM by NSE or certified by AMFI or IIBF.
• A chapter on banking code should be made a part of course curriculum of any course on banking done by public or private institutions like NIBM, IIBF, NIIT etc.

Matter is being taken up with IIBF to introduce a Certificate Course on Customer service with due emphasis on the Codes.

BCSBI is taking up the matter with NIBM.