The average compliance level of Indian banks in communicating to customers on charges, penalties, etc., is now 78% from 49% a decade ago. Adhering to standards of services could further improve service delivery, explains A C Mahajan, Chairman, Banking Codes and Standards Board of India (BCSBI). a body set up by RBI. Exceprts:
What is BCSBI’s mandate?
The RBI has set up the organisation to devise the standards of services, which the banks must adhere to. We monitor and evaluate if these standards are implemented by banks, who adopt the code at their board level.
How are standard of services determined?
The code is based on a few critical parameters. Information dissemination, involving communicating changes to the customer. Knowledge about charges, penalties, shouldn’t come as a surprise, but as information. Second, there should be transparency and services should be delivered without discrimination based on religion, sex, class or colour. Next is customer-centricity.
For banks, customer should be the focus and not income. Revenue generation should be only till the bank covers the cost of services and not for windfall profits and should keep charges reasonable and fair.
How is the Code developed?
A committee headed by BCSBI and comprising representatives of RBI, Indian Banking Association, large public and private sector banks like SBI, and ICICI outlines the standards after seeking suggestions from stakeholders. Final recommendations with due consent from the RBI is circulated among banks.
How often are they revised?
Every 3-4 years. We are finalising standards for the fifth edition that will be released in November. This time, we are including consumer activists to be part of the committee. Until now, they were only giving suggestions.
Are banks compliant while seeking consent for value added services?
If customers do not refuse a service, it is deemed consent and our rules don’t allow such provisions. Because, there’s a possibility the customer hasn’t seen the communication, or ignored it or didn’t understand it. You can’t force someone to say yes or no and not saying anything can’t be considered an acceptance. We will include standards on implied consent in our next edition.