May take up MF issue with Seb.
Piqued by a barrage of complaints about miss-selling of insurance products, the Banking Codes and Standards Board of India (BCSI) has raised the matter of misinformation by some banks with the Insurance Regulatory and Development Authority (Irda).
“Banks are looking at selling financial products as a source of fee-based income. These products include insurance policies, mutual funds and advisory services (wealth management). We have observed that there are a number of complaints about marketing (alleged miss-selling),” said a top official of BCSI.
Banks have made commitment to BCSI for rendering quality banking services of a minimum standard to individual customers and micro and small enterprises.
The official said the board had taken up this matter with Irda. Hyderabad-based insurance regulator is in process of developing a code for insurance agents, including banks.
In 2009, BCSI had revised the pact signed by banks regarding customer services. It now explicitly seeks an undertaking from banks that they will not sell products unless there is a written consent from a customer.
“Bank customers have approached us with grievances about selling of credit cards by direct selling agents of banks without bothering to check if consent was in place,” the official added.
The flow of grievances also covers providing inadequate information about mutual fund (MF) schemes at bank branches. “We will approach the Securities and Exchange Board of India (Sebi) to look into customer-unfriendly practices,” official added.
BCSI has conducted a survey and visited bank branches to review practices relating to display of information on basic banking services, opening of no-frills accounts, provision of basic banking services, lending practices and grievance handling.
While BCSI lays down the code, the offices of Banking Ombudsman (BO) receive public complaints against commercial banks, regional rural banks and scheduled primary co-operative banks. These complaints are tracked by BO offices by using a complaint-tracking software.
During 2008-09, 69,117 complaints were received by 15 BO offices against 47,887 complaints received during the previous year. The maximum number of complaints are related to credit cards, followed by complaints regarding banks’ failure to meet commitments.
