Some banks are dragging their feet on service code

The code that has been formulated was finalised in consultation with IBA (Indian Banks' Association). If banks did not send their representatives at the time of formulation, then it is their fault. Unless you put a little pressure on banks, they will never comply. We cannot let the customers suffer because the banks want their own sweet time to adhere to the code. If the banks have any grievances and suggestions, their chairmen can raise issues during our regular meetings.

When the BCSBI was formed, IBA was already functioning. If IBA had been doing a good job, there was no need for BCSBI. IBA is neither a regulatory body nor a self-regulatory body. It is a club of the member banks. The RBI as a banking regulator issues circulars; it does not get into the details of implementation. The regulator thus felt the need to set up a body to monitor the customer services rendered by the banks.

Is the BCSBI flexible enough?

Some banks had difficulty in adhering to the code. They needed time and we gave them time. The BCSBI does not fix any time-frame. The time-frame for compliance is fixed mutually and we monitor what steps the banks are taking to implement the code. All the bank chairmen have been cooperative. For instance, UTI Bank chairman P J Nayak came to us and asked if we were serious about banks sending the code to all customers.

When we told him that we indeed were serious, the bank started despatching copies to all their customers. Some banks are dragging their feet, we will nudge them along. Sending copies of the code not only educates customers of their rights but also empowers them. If the banks can send pamphlets after pamphlets advertising their products that too on glossy paper, then they should have no issue sending this code to customers.

Another issue bugging banks is that there are no practising bankers on the governing council of the BCSBI.......

The BCSBI was formed by the RBI. The memorandum of the association clearly stipulates that the first governing council will have a term of five years. The members shall be nominated by the RBI and the rest at the pleasure of the RBI. Hence, outsiders (practicing bankers) have no role to play in this organisation till then. I abide by the wisdom of the RBI.

After five years, you will have to hand over management of the BCSBI to banks any way, why not do it now?

The RBI feels when the systems are in place, then only it will be right to hand over BCSBI to banks. The RBI has given us five years to put the systems in place and this will be done with the cooperation of banks. Once the systems are in place, there won't be much to change.

It has been over a year since the BCSBI was formed. Can you tell us something on the works done so far and share with us your experience during field visits?

We have not concluded our field visits. We will go public with the findings. These are surveys, which will indicate broad trends of awareness, transparency, and indicate whether there have been any improvements in customer service or gaps still exist. We have just started in the metros. We have seen that there is at least awareness about the code that banks have to adhere to. BCSBI has introduced a compensation policy which did not exist earlier.

What role the BCSBI can play in ensuring that the service charges remain reasonable?

Our role is to have dialogues with banks. If banks say their charges are reasonable, then we will like them to show us how they consider it reasonable. We are in the process of collecting data on charges levied by different banks. We will study the differences and then leave it to the banks to support their statements on reasonable charges. Nothing is dictated top down.

What will be the next leg after the survey findings are made public?

Going ahead, I will say two things. First, we have the bankers who are already convinced and are showing a positive attitude. We will build on this. But we also want the customers to be vigilant. We don't want to spoon-feed them. Second, we want to expand the role to include small and medium enterprises (SMEs) businesses. It will be a code to ensure fair treatment to SMEs.