Emphasising on the need to treat customers fairly, the Reserve Bank of India (RBI) today said the average time of six months taken by banks to redress customer grievance needed to be improved.
"We have always emphasised that customers should be treated fairly. The average time taken by banks to redress grievances is six months. This is not fairness," said RBI Deputy Governor K C Chakrabarty, who is in charge of the customer service department of the central bank.
Chakrabarty said bankers often raised the question that in a free market why the regulator should always step in regarding customer service. "In the normal course, competition will take care. But it does not happen in a regulated market."
"If regulations open up the market, banks will not survive. Because we have restricted the market, entry norms are very strict, we have an obligation to the customer," he said. He also said globally the trend is that regulations are being made stringent in the area of customer service.
Chakrabarty pointed out RBI was also facing criticism from customers of being soft towards banks. He admitted RBI was 'little bit soft' because banks were increasing penetration, albeit challenges, and being harsh at this point would deter financial inclusion.
Complaints against banking services rose 14.63 per cent to 79,266 in the last financial year, as against 69,117 the previous year. Majority of these were regarding credit-cum-debit cards, followed by failure on commitments by banks.
The central bank had constituted a committee under M Damodaran, former chairman of the Securities & Exchange Board of India, to look into the issue of banking services to small and retail customers, including pensioners.