The Reserve Bank of India has initiated a series of measures to make banking a customer-friendly experience. While, earlier, it was the M Damodaran Committee that had come out with a report on customer services in banks, now, the Banking Ombudsman Conference has made a host of recommendations to protect the interests of small investors and bank customers.
Banks have been asked to examine the methods of leveraging technology for better customer service with proper safeguards, including legal issues, especially with the increasing use of the Internet for banking. The ombudsmen committee had suggested that banks initiate the process of providing one view of all bank accounts of a customer, including deposits and loans, with the help of available technology, such as core banking. It has also proposed that banks should complete the process of core banking within a year.
Analysts say the use of core banking should be extended across the country and across banks, which will make it easier for customers to avail the various facilities of a bank and conduct transactions from anywhere. The committee has suggested that the banking ombudsman should, once a year, share with the media data regarding complaints received and action taken by the banks. This, experts say, will bring in transparency in the way grievances are addressed.
The Damodaran Committee report has underlined that the widespread use of technology raises customers’ expectations on speed and quality of service delivery. Technology implementation has made branch banking redundant in many aspects, redefined several of the existing services and raised expectations regarding service charges.
?The bankers hold a view that the introduction of a core banking solution entails huge costs and the passing of benefits will take some more time till substantial portions of customers start using technology-based products,? the report said. Experts say as the profile of banking customers is changing fast, banks will have to take a giant leap in technology.
In case of any dispute regarding ATM transactions or Internet banking, the ombudsmen committee has suggested, the onus will now be on the bank to prove the customer’s negligence or mistake. Customers will have to be compensated for the losses arising out of transactions not authorised by them. Citing complaints from depositors, the Damodaran Committee has said that customers have complained that accounts had been hacked from remote locations and simultaneous hacking transactions had been reported from multiple locations, too. The committee has said that banks defend themselves by stressing that the customer would have compromised with the PIN and the password of the Internet banking access.
However, circumstantial evidence of misuse show that such locations had no direct relation with the customer. In fact, at times, frauds are committed by people through identity theft, such as phishing and pharming, where the customers are innocent parties to such transactions. With no definite grievance redressal process to address such complaints, it becomes very difficult for them to get quick redressal. Now, with the Banking Ombudsman Committee’s proposals, the customers can get speedy redressal to disputes related to ATM or Internet banking.
For additional safety, the Damodaran panel has suggested that the customer’s photograph be laminated on the ATM card. The laminated signature has to be the same as in the bank records and if the address of the card-holder is present on the laminated portion, which could also have the provision for including the UID number, the card issued by the bank would become a tool for KYC (know your customer) compliance.
Customers have complained that banks restrict the amount that can be transferred online by way of a day cap or ceiling amount per transfer. The Damodaran Committee felt that additional factors of authentication should be taken and higher amounts should also be permitted for online transfers.
One of the major grievances of bank customers is the delay in getting certificates showing tax deducted at source (TDS). The Banking Ombudsman Conference has suggested that banks should issue TDS certificates, duly completed in all respects, to account-holders and dispatch it to their mailing address.
The Damodaran Committee, too, has highlighted customers’ complaints about how certificates issued towards TDS were not complete in all respects and details, such as BSR Code, acknowledgment number and the challan number. Similarly, the report also highlighted that details on interest such as sweep-in/ sweep-out accounts or term deposit account number, for which interest was paid, were also not available to the customers. The committee suggested that in case of denial of credit of TDS by the income-tax authorities to the customer due to deficiency on the part of the bank, the customer should be adequately compensated by the bank.