RBI gets closer to clients

2007 - THE YEAR THAT WAS: CUSTOMER SERVICE

About 35,000 credit card customers of Citibank received free tickets worth Rs 23 crore in early 2007 under the 'Fly for Sure' promotional campaign undertaken by the bank in 2005.

The customers became lucky after the bank was cautioned by the Reserve Bank of India (RBI) about consequences if customer complaints were not redressed and commitments made under the promotional scheme not honoured, banking sources said.

The RBI stepped in after receiving a deluge of complaints accusing Citibank of not keeping its promise under the "Fly for Sure" scheme.

The bank subsequently owned up its mistakes and decided to provide air tickets to its credit card customers. Citibank has more than three million credit card customers.

The 'Fly for Sure' episode allowed the RBI to go the whole hog in pursuing its customer service initiatives. The central bank had set up a customer service department in July 2006.

'Fly for Sure' was a time-bound promotion by Citibank from October 1-December 31, 2005, promising to reward the customers who spent a specified minimum sum using their credit cards within a specified time.

However, in March/April 2006, the bank realised that there were 'actualisation' issues in the campaign as the third-party service provider, to whom Citibank had outsourced the work, did not adhere to the terms of the agreement. Citibank immediately intervened and decided to undertake the entire process in-house.

The bank's first step consisted in a comprehensive customer contact exercise whereby it contacted all eligible customers through post/phone/email and confirmed their travel preferences and ticketed them.

"We proactively and voluntarily briefed the regulator and kept it abreast of important developments," said Citibank.

The RBI's customer service department has been very vigilant since the Citibank incident. The department conducts impromptu inspections at bank branches to check that customer service guidelines were being followed.

Banks are being asked to submit the names of winners of promotional schemes to verify if promises were actually being kept.

Banks should provide banking services and not get into promotional activities. If they promise freebies under a promotional offer, they should honour the commitments made.

Recently, a bank started a scheme promising Santro cars to its customers. The RBI asked the bank to submit a list of names of customers to whom it gave Santro cars. This was a surprise check to ensure that the bank was honouring its promises, said a senior banker.

The central bank, in a circular dated December 19, directed the bank chiefs to train their branch level staff on customer service related issues. This was after the RBI conducted a random inspection of bank branches to ascertain whether its guidelines were being complied with.

The inspection revealed that the branches were neither aware nor were they implementing the guidelines. Some banks do not even have a customer service committee and where such committees exist, they don't meet regularly.

The central bank has noticed that many banks have not internalised its customer service instructions. Bank officials at some branches still insist that customers open a fixed deposit account to get a locker, don't obtain nominations for deposit accounts and don't accept soiled notes.

To address the issue of growing complaints from credit card holders, the RBI has directed select banks to explain their credit card bills to the customers.

The rising instances of social distress on account of excesses committed by banks' recovery agents also came under the RBI scanner. It was quick to warn banks of strong regulatory actions and also issued guidelines for the collection agents.

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RBI DIKTATS

Banks asked to issue passbooks

Acknowledge cheques deposit over the counter

Display charges and fees on website

Repossession of vehicle and property should be through legal means

Banks should conduct due diligence before employing recovery agents (RA)

Have a grievance redressal mechanism

RA should call from numbers notified to the borrower

Banks have to provide 100 hours of training to RAs

Strict targets should not induce RAs to adopt uncivilized, unlawful and questionable behaviour

Allotment of lockers should not be linked with fixed deposits

Banks directed to exchange soiled notes

Banks asked to accept small denomination coins