AIBOC issued its circular No. 135 on customers’ service committee headed by Shri Damodaran. We are reproducing the same here for our readers.
CIRCULAR NO:135 8th OCTOBER, 2010
TO ALL AFFILIATES/MEMBERS:
CUSTOMERS’ SERVICE COMMITTEE HEADED BY SHRI.DAMODARAN - LEADERSHIP OF CONFEDERATION APPEARS BEFORE THE COMMITTEE
Our members are aware that the Reserve Bank of India
Ø Review the existing system of attending to customer service in Banks – approach, attitude and fair treatment to customers from retail, small and pensioners segment.
Ø Evaluate the existing system of grievance redressal mechanism prevalent in banks, its structure and efficacy and recommend measures for expeditious resolution of complaints. The committee may also lay down a suitable time frame for disposal of complaints including last escalation point within that time frame.
Ø Examine the functioning of Banking Ombudsman Scheme – its structure, legal framework and recommend steps to make it more effective and responsive.
Ø Examine the possible methods of leveraging technology for better customer service with proper safeguards including legal aspects in the light of increasing use of Internet and IT for bank products and services and recommend measures to enhance consumer protection.
Ø Review the role of the Board of Directors of banks and the role of Regulators in Customer service matter.
Composition Committee Members:
- Smt. M.Rajyalakshmi Rao, former member, National Consumer Disputes Redressal Commission,
- Shri. Ashok Ravat, Hon. Secretary, All India Bank Depositors’ Association, Mumbai.
- Shri. M.V.Nair, Chairman, Indian Banks’ Association and CMD, Union Bank of
- Shri. B.M.Mittal, Chief Executive Officer, BCSBI, Mumbai
- Shri.M.S.Sundara Rajan, former CMD, Indian Bank, Chennai.
- Shri.S.Gopalakrishnan, former Banking Ombudsman, Chennai and former CMD, Vijaya Bank, Chennai.
Member Secretary:
Shri. Kaza Sudhakar, Chief General Manager Customer Service Department, Reserve Bank of India
The Confederation was also invited to present their views before the Committee. We appeared before the Committee on 7th October 2010. On behalf of our organization Com.P.K.Sarkar, the President and Com.G.D.Nadaf, the General Secretary appeared before the Committee and made their presentations on all the terms of reference. In view of the elaborate issues on which the Committee is expected to come out with their recommendations, we have also submitted a written memorandum and sent in advance copy to them for enabling them to have a focused discussion on the various points raised by us. The Committee not only acknowledged the valuable suggestions that we have made but also appreciated our positive and constructive approach on the subject and indicated that the Confederation can forward further suggestions if any for the consideration of the Committee.
Comrades, the Confederation is known for its positive and practical approach as regards the improvements that is necessary for the development of the banking industry. We have presented a comprehensive view about the Customer Service in the Banking Industry and assured our full co-operation in all the future endeavours of the Committee as well as the RBI in this direction. A copy of the Memorandum submitted is enclosed.
All our affiliates/members are requested to await further developments in the matter.
With greetings,
Sd/-
(G.D. NADAF)
GENERAL SECRETARY
MEETING WITH THE CUSTOMER SERVICE COMMITTEE HEADED BY SHRI.M.DAMODARAN, FORMER CHAIRMAN, SEBI
We thank you on behalf of the All India Bank Officers’ Confederation, the largest representative organization of the Officers’ fraternity in the Banking Industry. The Confederation was founded in the year 1985 and have a overwhelming membership of more than 2 lac officers working in the Public, Private, Regional Rural Banks and Co-operative sector in the country.
The representatives of the Confederation have their nominees in the Boards in over 17 banks being the majority organization in these banks. They have also been participating in the deliberations covering most of the subjects that have figured in the terms of reference given to the Committee and hence the Confederations’ views are reflected in the day to day proceedings while implementing some of these issues in the operations of the banking industry.
The first Customers’ Service Committee was set up under the Chairmanship of late Shri. R.K.Talwar, the doyen of the Banking Industry and the former Chairman of State Bank of India
a) Review the existing system of attending to customer service in banks – approach, attitude and fair treatment to customers’ from retail, small and pensioners segment
The Banking operations have become simple and less time consuming due to the introduction of single window concept. The system has stabilized in almost all banks. The introduction of Core Banking Solutions has brought a revolutionary change as far as the customers’ service is concerned. The ATM net work has brought down the pressure at the counters to a substantial level. However, there is a lot of scope for improving the service in the banks. We need to examine the customers’ service in this background. Thanks to the empowerment of the counter staff who are now in a position to take a very substantial load of the routine work through improved powers. There is a need to encourage the staff to opt for greater autonomy and powers so that duplicity of functioning can be avoided and the manpower can be utilized in an effective manner. There are several areas where we can empower the counter staff to greater extent than the present one. The existing system no doubt affords considerable leverage to the banks.
The existing policies in regard to the career progression needs a review to enhance the utility of the counter staff. The delegation of powers should create a motivation to the staff working in the counters to aspire for greater career progression in the bank.
As regards the specific reference of retail, small and pensioner segment customers, we suggest as follows:-
i) The Banks should introduce pass book printing system by the customer themselves by allotting them code numbers since there are still delays in getting the pass book updated;
ii) The bigger branches should have an exclusive lounge for the Pensioners’ to enable them to transact their business and they are now made to wait in most of the branches thereby causing Pensioners unnecessary hardship;
iii) The Single Window system is still not providing service at one point. There is still division of payment/receipt, remittances etc., this classification is against the spirit of the single window concept;
iv) The opening of accounts should be uniform in all the banks. The current practice of class banking adopted by the new Generation Private Sector and Foreign Banks insisting for holding minimum balance etc., should be abolished;
v) The ATM net work of all the banks should be enlarged; The existing rate of various charges should be reviewed. The customers maintaining the Savings Bank account should have at par service in view of the low cost deposit collected from them;
vi) The KYC norms be simplified.
vii) To encourage savings, rate of interest on Savings Bank account be enhanced.
viii) Adequate manpower be provided at branches to cope up the pressure and to render personalized service.
ix) Timely training and updation of skills on new products be shared with the operating staff etc.
x) Simplification of systems and procedures to reduce delay in transactions.
b) Evaluate the existing system of grievance redressal mechanism prevalent in banks, its structure and efficacy and recommend measures for expeditious resolution of complaints.
i) The existing grievance system is not effective. They relate mostly to the recovery of charges, rate of interest, remittance etc., There is a need to structure the grievance machinery at the branch level. The Branch Managers and the other functionaries should be empowered to sort out these issues with broad delegation rather than following the bureaucratic procedure to sort out the smaller grievances related to the operation of the account, the charges recovered etc.,
ii) The complaints as regards remittances etc., the structure should be strengthened to ensure against the loss of interest to the customer;
iii) The existing time frame for attending to each and every work of the customer needs a review;
iv) The existing customer service committees operating at different levels in each bank has to be reviewed and appropriate measures to be taken to empower them with suitable authority to dispose of the complaints.
c) Examine the functioning of Banking Ombudsman Scheme- its structure, legal framework and recommend steps to make it more effective and responsive;
We are not in a position to comment on the Ombudsmen Scheme in view of lack of adequate materials and information with the organization. We are also not being taken into confidence in the matter of its functioning by the management at any level. We are of the opinion that it is not uniformly effective and appears to be less utilized machinery at the banks in comparison with the huge number of customer complaints. As most of the complaints emanate from the elite class of the society, the utility of Banking Ombudsman is of no consequence for the illiterate, common customers. Moreover, the Banking ombudsman is not the final authority, in disposing the complaints, there is a scope for the cases getting unduly prolonged, causing unnecessary hardship to the customer as well as Bank.
We are of the view that this issue can be discussed separately since a lot depends upon the Government agencies.
d) Examine the possible methods of leveraging technology for better customer service with proper safeguards including legal aspects in the light of increasing use of Internet and IT for Bank products and services and recommend measures to enhance consumer protection
According to us there is a need to be circumspect as regards the expansion of Internet and IT Bank Products. The Banks should be cautious while using these channels since it is for the present, operated by the elite people amongst our valued customers. The younger generation would be glad to use Inter Net in view of the easy access and their attitude in easily using these products. They are no doubt time saving and provides the Banking service at their respective residence, but there is a need for updating the staff through proper training about these products. The technology where the risk involved is lesser can be encouraged. The introduction of these products also depends on the risk appetite of each bank and may not be made uniform in all the banks. However, certain basic facilities where the financial transactions are not involved may be introduced to encourage techno-savvy attitude amongst the workforce and slowly inject the other products into the system.
There has to be a comprehensive training as regards handling of the systems to the frontline staff. The updating of knowledge as regards software and its use with all safeguards is a must.
The Bank managements should encourage and motivate the staff to go for higher studies in the technology related subjects if need be through financial incentives as was done in the case of the CAIIB qualification etc., in order to see that the technology driven products are handled with care by our workforce.
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e) Review of the Role of the Board of Directors of the Banks and the role of Regulators in customer service matter.
The Directors are nominated by the Government of India in all the Public Sector Banks and few are elected by the share holders on the basis of the share holding pattern. The other Directors appointments are not based on the requisite qualification; still it continues to be a political appointment there by causing a serious damage to the functioning of the Boards. We have not brought any change as regards the constitution of the Boards is concerned. The Corporate Governance is more a matter of theory as far as the Boards of the Banks are concerned. The CMD will have a major say and everything depends upon his functioning. The Board including the Nominees from the Government and RBI have a truncated role. They are appointed since they hold some position in the Government as well as the RBI – a question that needs to be considered and debated seriously whether the Government of India and RBI can both decide to appoint professionals based on the capabilities of the persons not necessarily from their own rank and file in the interest of the effective functioning of the Bank. There is a need to review the existing provisions of the Banking Regulation Act and broad base the selection options so that the banking industry is able to get professionals in the Boards to take care of the vastly increasing diversification in the banking sector.
These are our immediate response to the communication received from IBA in regard to our meeting the Committee to express our views. We strongly believe that the exercise needs greater time and opportunity for the Confederation; it cannot be completed within just one hour wherein all the other three officers’ organisations are also participating. We would have appreciated had the IBA/RBI had given more time and inputs to enable us to interact with the committee and come out with our detailed views. In fact, that there are certain issues which need a thorough debate and presentation on behalf of our Confederation. The issues such as IT initiatives in our day to day functioning and the Functioning of the Board are larger issues where we should have taken it out for separate meeting. We have our own grievance as far as the methodology and functioning of the Government as well as RBI is concerned in the matter of Directors on the Boards of the Bank, the outsourcing of the IT related issues and the casual approach of the Managements of the Banks while dealing with these issues. We feel that, majority organisation of Officers at Bank level, be involved at Govt./RBI level, while formulating policy on customer service at Banks. Hence, we would submit that the Committee might consider providing greater opportunity for us to present our views rather simply asking us to submit our views in writing.
Place: Mumbai (G.D.NADAF)
Date: 07.10.2010 GENERAL SECRETARY
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