Have a complaint against your bank? Here’s how RBI plans to resolve your grievances

• An RBI Committee on customer service standards has proposed setting up of a common complaints portal where customers of any regulated entity can lodge their grievances.
• No need for multiple KYC verifications suggests the committee. Says required documents can be kept in a centralised database instead.
• RBI panel proposes setting up of a dedicated phone line for senior citizens to address their queries on services.
• Lenders must compensate customers if they lose the original home agreement of customers and take responsibility for getting certified copies of the same.

Have a complaint against your bank which is not getting resolved? Worry not. The Reserve Bank of India, plans to come to your rescue by cracking the whip on entities that fail to resolve grievances. The regulator intends to adopt a carrot and stick approach to ensure better service standards. Social media platforms are rife with consumers complaining about service quality banks with some alleging that even writing to the ombudsman does not yield any resolution.

In view of rising complaints by customers, the Reserve Bank of India, which regulates banks and non-bank lenders, appointed a committee last year to review customer service standards. The committee’s report, submitted on 6 June, has listed out several recommendations to improve the quality of customer service and grievance redressal mechanism. The Committee, after extensive deliberations with diverse stakeholders, has since submitted its report and now seeks comments of stakeholders and members of the public.

The RBI surveyed over 5,000 customers to understand the areas where the maximum complaints were ariting from. It found that maximum complaints pertained to account operation services at 22.0%, and internet or mobile banking came second at 16.3% and
ATM or CDM facilities accounted for 16.2% of complaints. The RBI committee has proposed several constructive measures to ensure that consumers are not held to ransom by lenders.

The new proposals

For starters, the committee proposes the setting up of a common complaints portal where customers of any regulated entity can lodge their grievances. The Reserve Bank Complaint Management System (CMS) portal would be brand agnostic so that the customers of any lender can lodge a complaint. The portal would then allocate the complaint to the respective RE at the back-end.

The central bank offers customers the option to escalate their complaints to an internal ombudsman if grievances are not resolved. However, the committee has said that in order to increase the effectiveness of the Internal Ombudsmen (IO) appointed in the regulated entities, the Reserve Bank may nudge the Indian Banks’ Association (IBA) to create a fund to directly pay the salary / compensation to the IOs of the banks. Similar funds can be created by respective Self-Regulatory Organisations (SROs) for other categories of regulated entities. Alternatively, the Reserve Bank itself may consider creating the fund. Cost of the above fund, thus created, may be recovered from the REs, in proportion to the complaints against them referred to the IOs.

The central bank is currently aware of the challenges that consumers face and that the system is focused on complaints and not their redressal. The RBI committee on customer complaints has said that in case of loss of property documents, the regulated entities should not only be obligated to assist in obtaining certified registered copies of the documents at their cost but also compensate the customer adequately, keeping in view the time taken to arrange the alternate copies of the documents.

The committee has also recommended setting up of dedicated telephone numbers by lenders where the senior citizens can call for clarifications, queries and / or guidance with respect to service that they are eligible to avail/want to avail. India has 13.8 crore senior citizens and of this many are immobile, the RBI committee wants to ensure that they are not left out of the financial system.

The KYC headache

If you are a customer of any bank or non-bank lender, chances are you would have had to repeatedly provide KYC documents at regular intervals. Now RBI’s committee has recommended that entities should maintain a centralised database of KYC documents of all customers, linked to a unique customer identifier, say the Customer Information File (CIF), obviating the need for submitting KYC documents repeatedly for availing multiple facilities from the same RE. Whenever KYC documents are updated by the customer, the same should be reflected for all other facilities availed by the customer from the RE.

The regulator is cognisant of the changing landscape of financial services and high levels of digitisation. Currently, banks limit the debits in saving accounts. Basic Savings Bank Deposit Account (BSBDA) holders are allowed four free debit transactions in a month.

In order to give a fillip to digital transactions, the Committee has recommended that transactions undertaken through Unified Payment Interface (UPI) may be kept outside the stipulated limits on debit transactions in saving bank accounts, including Basic Savings Bank Deposit Accounts.

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.