Revised code for bank customers to include mobile payments

Given the rising popularity of mobile payments and wallets, the Banking Code and Standards Board of India (BCSBI) will include them in the revised code for individual customers to be released this year. The Code of Bank’s Commitment to Customers could also include some advice regarding capping of charges because maximum complaints received were in this regard, said A C Mahajan, chairman, BSCBI.

Currently, the BSCBI has 136 members, which includes 71 scheduled commercial banks (SCBs), 47 regional rural banks (RRBs) and 18 urban cooperative banks (UCBs).

The BCSBI releases a Banking Code Compliance Rating after carrying out a survey of select branches of member banks to verify implementation of the codes by the banks. In 2015, the level of compliance was 78 per cent and this year the aim is to increase the rating to 85-90 per cent, Mahajan said.

Banks are also given ratings based on parameters like information dissemination, transparency, customer-centricity, grievance redressal and customer feedback. The four categories of ratings are “high”, “above average”, “average” and “below average”. In 2015, public sector banks performed badly with 10 of them getting a rating of “average” and only one getting a rating of “high”.

Against this, 10 private banks and three foreign banks got a “high” rating. “There is a provision to suspend the bank from BSCBI membership if the rating is consistently average. But, that will take more time,’’ Mahajan said. One of the directives prescribed by BCSBI which now has to be followed by all banks is to give customers a copy of the terms and conditions while opening a savings bank account.

By following BCSBI’s code and getting a high ranking, banks would be able to attract customers. “Beyond a point, high interest rates lose their importance. Banks will be able to attract customers only by offering good service.

Code compliance does not cost anything,’’ he said.

The code also empowers customers to deal with sub-standard service. If banks which have adopted the code do not comply with it, customers must lodge complaints. Deficiency in service is a cognisable offence and banks can be pulled up by the Reserve Bank of India (RBI) for it. In fact, of the complaints received against banks, 29 per cent are related to non-compliance of the code. The BCSBI also releases a Code for Banks Commitment to Micro and Small Entrepreneurs. One of the recommendations was with regard to the treatment of “sick” micro and small entrepreneurs (MSEs). Following the BCSBI’s code, RBI had issued guidelines to banks saying that viable accounts of MSEs should be revived.

The code for customers was last revised in 2014. They included rules with regard to ATMs, credit cards, senior citizens, electronic banking and internet banking. One of the recommendations was that in case of a fraud where the customer had not contributed in any way, such as hacking or card-cloning, the liability should be capped at Rs 10,000. Another recommendation asked banks to provide a ramp at branches to make it easier for senior citizens or the physically challenged to access the branch.