RBI deputy governor emphasises ethical banking, says it stops small compromises from becoming large problems
MUMBAI: Emphasising the importance of ethics in banking, Reserve Bank deputy governor Swaminathan J has called for customer centricity, saying effective service is rooted in getting the basics right, including clarity in communication, accuracy in execution, fairness in dealings, and timely resolution of issues.
The best customer service, he said, is often "quiet and consistent," marked by "responsiveness rather than grand gestures,” he said while addressing a private event here Wednesday.
He observed that ethics in banking is “sometimes treated as a soft theme. But, it is not. It is the discipline that protects customers, employees, and the institution itself.”
“Every large organisation faces moments of temptation—the temptation to cut corners, to postpone a difficult disclosure, to take a convenient interpretation, or to treat a complaint as an inconvenience," he said.
“Ethics is what stops small compromises from becoming large problems. It is not about being perfect. It is about how you handle grey areas, and how fairly and quickly you correct a mistake,” he added.
The same mindset supports regulatory discipline as well, he said, adding, "Regulatory discipline should never be seen as a box-ticking exercise. It is part of institutional reliability and long-term credibility."
On transparency, Swaminathan said customers must be given clear, unambiguous information, particularly in digital journeys, regarding terms, charges, consent, and authorisations.
"Transparency extends beyond outward communication to fostering an internal culture where employees feel comfortable raising concerns and flagging errors," he said.
Highlighting ownership as the value that makes others tangible, the deputy governor described it as the shift from viewing a task as merely assigned work to embracing it as personal responsibility.
On teamwork, he observed that modern banking risks cut across departmental boundaries and require coordinated responses. Effective collaboration, he said, reduces blind spots and improves response times.
Banks should design digital journeys in such a way that customers are clear about what they are doing, what they are authorising and what they aren’t, he said.
“Terms, charges and consent should be unambiguous. Alerts should be timely and meaningful. And when something goes wrong, customers should know quickly what steps to take, and the response should be predictable and supportive,” he said.
Swaminathan also observed that transparency means customers are given clear information and are not surprised later. It means decisions are recorded in a way that can be explained.
“Transparency is also closely linked to internal culture. When you say dil se open, it means you are internally open as well. In the healthiest of organisations, people are comfortable raising concerns, flagging errors, because the organisation values such early warning signals,” he said.
Transparency is not only about outward communication, it is also about inward honesty, he said, underscoring that modern banking risks do not sit neatly within one department, but cut across departmental boundaries.
“Institutions respond best when information moves across early and teams coordinate without ego. Teamwork is, therefore, a control mechanism. It reduces blind spots and improves response time,” he said.