SUGGESTION TO RBI

Date: 30-06-2010 by email & Courier

Chief General Manager,
Reserve Bank of India,
Customer Service Dept,
Central Office,
Amar Bldg, P. M. Road, Fort,
Mumbai 400 001
Email: helpdoc@rbi.org.in

Respected Sir,

Subject: Suggestion - Customer Service Committee.

I refer to press note No 2009-2010/1712 dated 16-06-2010 and thank RBI for initiating steps to improve customer service in banks.

02. I being proactively interested in improving customer satisfaction would like to humbly submit following suggestions on customer service in banks.

03. I am attaching herewith my letter dated 17-08-2009 addressed to RBI for your kind reference. It was scaled up to Joint Director [Banking], MoF, Govt. of India. In addition to this, I offer my following suggestions:

04. A] Though RBI has made its directives on ATM failed transactions more customer friendly, its implementation on pro-actively paying penalty beyond 12 days is less than satisfactory. I suggest that if a bank does not credit penalty amount of its own along with amount of failed transaction, bank should be required to pay Rs.150/- per day beyond 12 days’ delay instead of Rs.100/-, if customer is required to represent for penalty amount.

B] Customer awareness on this provision is negligible. All ATMs should carry details of this directive prominently near ATM machines for creating awareness in public. RBI needs to release advertisements. Banks may release leaflets in news papers. Statements of account and covering letters of ATM cards should also contain such information.

C] Facility of complaint for failed transactions by sms and email should be arranged, as written complaints may take time, specially if account holder is out of station, where transaction fails. Separate mobile number and email ID should be provided to customers with ATM cards.

D] Alternatively Committee may consider following suggestion:

Some Banks have automated payment of failed transaction penalty by system itself. In this case bank staff can manipulate date of receipt of complaint from customer and bunk penalty or part of it. Banks must be getting information of such failed transactions within a day through system. Hence it is advisable to amend rule that instead of paying penalty after 12 days of receipt of claim of customers, banks of its own should pay penalty if claim is not credited within 12 days from date of failure of transaction. 12 days can be made 15 days if need be. This will solve all operational issues, manipulations by bank staff and repeated intervention of customers.

E] RBI should seek confirmation every six months from bank signed by two of General Managers confirming that penalty of failed transactions have been paid as per RBI circular and no penalty is unpaid as on date of certificate.

05. At present services of Banking Ombudsman are free and hence complainant may not be a consumer under The Consumer Protection Act 1986. To enable complainant to move Consumer Forum/Commissions against deficiency in service [other than quasi judicial decision of Ombudsman] at office of Banking Ombudsman, a nominal fee of Rs.50/- should be charged for filing complaints with it. This will make working of staff of office of banking ombudsman more alert, polite and efficient, as office of ombudsman can be pulled up in Consumer Forum/Commission.

06. RTI is also a part of interface with public and customers of banks.
Following banks have yet not nominated their branch heads as ACPIO under RTI Act 2005:

United Bank of India, Syndicate Bank, Bank of Baroda, UCO Bank, Punjab & Sind Bank, Union Bank of India, State Bank of Patiala, Indian Bank, Corporation Bank, Bank of Maharashtra, Allahabad Bank, and Vijaya Bank.

It makes it difficult for semi literate citizens to locate the office where RTI application is to be submitted or mailed. Normally branches hide notice boards containing details of ACPIO/CPIO, behind posters so that customers cannot read these details. Some branches do not display such information at all in customer lobby. When oral enquiries are made, officers/managers pretend that they do not know any thing about RTI etc. Hence all banks should have uniform nomination of branch heads as ACPIO.

07. In majority of customer service related problems, where employees/officers have harassed and insulted customers [specially common men], by flouting RBI and HO directives, the errant staff are not pulled up and usually system tries to save such staff [like Ruchika case]. This gives boost to such staff as nothing happens to them for enjoying predicament of bank customers. They continue to harass customers with impunity. This is more so in public sector banks at branch level.

I suggest that at least 25 to 30 percent of all complaints should be scrutinized every year by a committee of senior executives at HO level and banks must take strong punitive and corrective action against all such staff who have unduly harassed small customers. Some “outsiders” [like representatives of NGOs of Consumer Protection, management consultants in CRM, educated senior clients of other banks] may also be thought of.

Incidentally, I append below relevant paragraph from e-Times of India dated 08-06-2010 [Ahmedabad edition] for your kind reference on “Outsiders”:

“As part of making the bureaucracy more responsive, a system of outside assessment is now in place. Annual confidential reports (ACRs) are examined by committees of ex-officials who can recommend a change in grading. Though the committees' powers are limited, the move is aimed at ensuring assessment is not an in-house affair………..”

The very existence of such a process will be deterrent for errant officers from indulging in harassing public [mainly due to inflated ego, power [?] of chair and security cover provided by management and unions] with impunity. A note should also be made in annual performance reports of such officers.

08. Whenever judgements of courts and consumer commissions/forums are delivered against bank, it should be made mandatory for banks to conduct in-depth enquiry and punish decision makers whose decisions could not be sustained in courts/consumer commissions/forums. This will decongest courts also and make decision making process at bank level more just and fair. This is what our Hon’ble Prime Minister and Hon’ble Minister for Law and Justice call “Justice in administration”. Reference is also invited to judgement dated 30-10-2009 of Hon’ble Supreme Court of India in SLP[C] 29852 OF 2009 [CC NO.11768] and National Litigation Policy recently declared by Government of India.


09.Banks can also consider appointing retired judge of High or Supreme Court or retired President of NCDRC/State Consumer Commission or retired senior executive of banks as their internal [in-house] ombudsman for the bank itself, who can be approached by customers in all the matters of dispute [except sanction of loans but including delay in loan decisions]. Present banking ombudsman of RBI confines to limited area of customer service only.

This will make resolution of grievances fast, cost effective and will improve customer satisfaction in addition to reducing burden on courts. This internal ombudsman can be paid per case. Present nodal officers [like vigilance officers] mostly are not impartial and try to protect officers and bank, compelling aggrieved customer to resort to banking ombudsman or consumer forums. An element of external/outsider and unconnected element at each bank level, in resolution of customer grievance, will make a difference.

10. Some private banks and mobile companies have facility of automatic scaling up of complaints. Most public sector banks do not have this type of facility, which needs to be introduced for written and e-filed complaints.

11. Some banks [like SBI] provide email IDs of all branches/offices on their websites, while most of banks do not have this information. Some banks do not provide email IDs of field administrative offices [regional/zonal/circle offices] also. Customers find it difficult to send emails to branches or field administrative offices directly. Hence all banks should be advised to have email IDs of all CBS branches and also field administrative offices on their websites.

12. Citizens should be allowed and encouraged to have audio recorder/ spy pen/mobile with recording facility with them, when visiting banks or discussing with bank staff. RBI has permitted such recording facility during visits of recovery agents. This will make bank employees courteous and they will not be in a position to mislead the public. Citizens will be able to substantiate facts in their complaints.

13. Barring president of Depositors’ Association, all other dignitaries on committee seem to be from Govt. sector. Even govt. approved NGOs working for decades in the field of Consumer Protection have not been included. Private sector banks are also not represented. Thus approach of RBI is governmental and not holistic in the matter of customer service in banks. RBI should welcome participative democracy at least in the matters affecting citizens directly. It may get some valuable out-of-box suggestions and solutions from non-govt. members/NGOs also.

14. I have experienced that RBI itself is not serious for getting its own circulars implemented by banks, even in the matter of customer service or illegal hostile methods for recovery of small loans. It does not reply or try to pass on the bucks to others for enforcing compliance of its circulars. This attitude of RBI needs overhaul if it really means business. Citizens are not interested in tons of circulars and reports on customer service, but their effective implementation at branch level. Now some vigilant citizens are forcing banks to implement directives of RBI through RTI punch. The duty that RBI should discharge, is now being taken over by such alert citizens. This issue requires serious introspection and remediation by RBI.

15. Nearly a dozen charters, codes, policy declarations made by banks on their websites, have not made any material change in customer service at branch level. Majority of staff and branch mangers do not even know of it or at least pretend so. These are not enforceable in courts/consumer forums. Majority customers do not also know of such averments of banks. This requires revisit. Some of them should be made enforceable at law as a matter of right. At present it is charity by bank staff.

16. Period of filing complaint with Ombudsman should be extended to two years. Normally customers first represent to branch and on not being satisfied with reply or no reply he resorts to RTI. He requires at least one year to get information and papers under RTI Act 2005 [including second appeal to CIC]. Thereafter he again represents to branch and then scales up to RO/HO, based on information received. It takes 6 to 9 months. Thus by 21st month he gets final decision of the bank. Hence period of one year from first level decision, is too short to effectively present a complaint before Ombudsman.

17. Tracking system should be introduced for complaints with Ombudsman, as is available with Central Information Commission and Passport Offices. Complainant should be periodically informed of status and progress of complaints, by banks through SMS, since villagers now have mobiles.

18. On 12-05-2010 I visited CPIO/Superintendent of Post Offices [SPO], HPO, Junagadh. I came to know that they have a system whereby an officer from office of Chief PMG, Delhi or Ahmedabad can at any time of the day request SPO to show live on computer to that officer actual working of any dept or floor of the building, including customer lobbies, staff working etc. Officer at Delhi/Ahmedabad can record entire position. He also passes immediate instructions to correct deficiency. Officer in Delhi or Ahmedabad has details of sitting of staff of entire post office. The officer raises queries on long queues, dirty look, absence of staff etc. I think this best practice needs attention of RBI for replication by it in its offices and few large bank branches.

19. Installing few CCTVs in bank branches [not only at entrance] will make lot of difference not only for security but customer service.

20. For a common man, it is difficult to decide which RBI circulars are mandatory, informational, advisory etc. I had filed RTI application on 27-10-09 [RIA 1377/2009-10] with RBI, but reply was ambiguous, since there is no clarity at RBI level on this issue. I suggest that RBI circulars on customer service at least, should be prominently marked on its first page as to mandatory, informational, advisory etc. This will be useful for general public.

21. Language of RBI circulars should be such that it can be understood by a graduate who has studied in English/Hindi. Most of branch mangers also fail to grasp RBI circulars due to jargons and technical language used. Most banks have to simplify contents to make their branch managers pickup contents and implement it. Now that common man is also directly reading RBI circulars on net, language should be simple, specially of circulars meant for common users of bank services. Every such circular should at least contain point-wise operative gist which common man can easily grasp.

22. All banks should be advised to upload circulars connected to customer services on their websites, as is being done by RBI. This is otherwise also mandatory as per section 4.1.b.v of RTI Act 2005. Most of banks compel applicants to resort to CIC for copies of their circulars affecting common customers of bank.

23. There is at present no provision for payment of compensation for harassment, damages, delay, mental and emotional agony, insults, loss, expenses under Banking Ombudsman Scheme 2006 [except for credit card complaints]. It is necessary that scheme should include payment of compensation up to Rs.1.00 lakh in case of all complaints. Since there is no such provision, aggrieved customers resort to Consumer Forums, instead of Ombudsman. This will prove to be deterrent to errant bank officers, from whom bank will or should ultimately recover the amount.

24. If on any matter there is decision of State CDRC or NCDRC, then that judgement should be followed for all similar claims at bank level itself, rather than forcing the aggrieved customer to pass through tedious process of getting justice through Ombudsman/Consumer Forum.

25. Banks and RBI should have a system whereby customer can register with them, so that he gets copies of all circulars on a particular subject [specially customer service] by email. This is now possible with IT, where in group emails can be sent instantly. This will save time and inconvenience in visiting websites and searching for circulars, issued by a bank or RBI on a particular subject.

26. Assessment of quality of service at branch level:

At present, banks are relying mainly on internal audit reports to evaluate quality of service at the branch level. It mainly includes filling in few forms casually and as a routine matter. Administrative offices hardly scrutinize such reports on customer service, which are cosmetic in nature.

I suggest that bank HO should prepare a panel of service quality assessors from public, [specially retired persons from government, banks, insurance, telecom, military, management consultants in customer care etc and a team of two of them should visit 2-3 branches anonymously without revealing their identities, as a common man to open account or borrow or exchange notes or purchasing demand draft, lodging complaint, observing time limits, cleanliness, courtesy of the staff etc etc. Selection of branches for a team of 2 assessors should be done by a senior executive not connected with customer service dept at HO for a state or region. He should maintain total confidentiality. Thus every year 10-15% branches of the bank should be covered by various teams. Every year team members should be changed. The assessors should submit detailed report of their live experience at the branch to HO. They may be reimbursed suitably. Even RBI can follow this type of assessment for its own services and services of other banks.

This type of system was followed by public centric kings in olden days. It will factually reveal quality of service being offered at branch level in routine manner. I have found that staff offers better service and courtesies to customers when audits are in progress and once it is over, things dramatically change. Most of the customers who have problem just walk to some other bank without making complaint or giving feed back. Public sector banks do not have system of contacting customers who severed relationship with banks through independent agency/staff from controlling office for their feed back.

The suggestion if implemented will improve day to day customer service on the counter as staff will have apprehension that the person may be assessor from HO and it will give vital feedback to HO to fine tune its policies and procedures.

27. The press-note contains facility for email, but it is difficult to have suggestions running into 10-12 pages emailed through it. Attachment facility is also not available in the link. RBI should have provided separate email ID for getting suggestions.

28. I suggest that per day penalty provision should be prescribed for delay in communication of decision on loan applications, like the one provided for failed ATM transactions. Govt. of Delhi have recently mandated for penalty per day for employees for delays in few depts. This will be extended to all other departments over a period of time.

29. Normally in Govt. offices, importance is given to “WHO made the suggestion” rather than “WHAT is the suggestion”. I am sure Committee will take into account my submission in a positive and open manner. I have invested time, energy and money for this presentation, only to improve customer satisfaction.

Yours faithfully,
J.P. Shah
Encls: as above


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