RBI panel recommends proposals to improve banks’ customer services

It recommended that there should be a time limit for the return of property documents to borrowers after the closure of the loan account, failing which a penalty should be imposed on the lender.
Image used for representational purpose only. (File Photo | PTI)
Image used for representational purpose only. (File Photo | PTI)

MUMBAI:  A committee appointed by the Reserve Bank of India (RBI) on Monday recommended a slew of initiatives aimed at improving services for the customers of banks and other entities regulated by the central bank. 

The main proposals of the committee, which is headed by former deputy governor BP Kanungo, include a ‘Customer Service and Protection Index’, a centralised KYC database, online settlement of claims by heirs of deceased account holders and a common platform for filing complaints.

The report of the Committee for Review of Customer Service Standards in RBI Regulated Entities (REs) has also suggested that the operations of accounts should not be stopped pending periodic Know Your Customer (KYC) updates.

“The Reserve Bank may develop and publish a ‘Customer Service and Protection Index’ with a view to capture, at the system level, the quality / standards of customer service and extent of customer protection in the REs through a single score,” said the committee.

It recommended that there should be a time limit for the return of property documents to borrowers after the closure of the loan account, failing which a penalty should be imposed on the lender. The committee reviewed the complaints received under the RE’s Internal Grievance Redress (IGR) mechanism in the last three years and observed that the number of complaints has been range-bound in the region of around one crore complaints per annum, the report said.

The REs, it suggested, “may adopt a nuanced approach for risk categorisation of the customers. For example, salary earners with inflows and outflows consistent with the customer’s profile need not necessarily be categorised as high risk, even though they may be ‘high net worth’ individuals”. Similarly, students can also be categorised as low-risk.

The report said till the recommendation for a common complaint portal is put in place, the REs should have a system to enable the complainant to track the progress in the processing of the complaint. “Customer-facing staff and officers should undergo mandatory training in soft skills to reduce instances of misbehaviour by the errant staff/officers,” it said. The committee has also suggested measures for the benefit of pensioners. The pensioners, it said, should be able to submit Life Certificate (LC) at any branch of the bank in which they maintain their pension account.

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