Extending the reach of banking services

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the procedure laid down in the law and by the RBI. Banks were also unable to ensure that DRAs work within these guidelines. Defaulting customers are being driven to extreme steps caused due to the threatening and menacing behaviour of recovery agents.

It is the responsibility of banks to make sure that the DRAs follow proper steps to recover dues without causing any type of violence, social unrest, and humiliation. Also, banks need put in place a system to identify ‘willful defaulters’ and ‘situational defaulters’ (defaulters due to unforeseen circumstances such as sudden health expenditure, job loss or death, or a major loss in business, etc) and have separate mechanisms for effective recovery of loans. Borrowers need to be proactive in reaching out to the bank and discussing their problems. Many banks have opened counselling centres for borrowers. These centres help ‘situational defaulters’ to overcome their financial problems. In these centres, banks devise suitable repayment schedules.

Customer service: Customer service forms an integral part of banks’ offerings. Banks need to provide a well-laid and strictly implemented complaint redressal mechanism to all its customers. It has been observed that banks have not been able to put in place an effective mechanism for all its customers. While educated consumers in urban areas have a variety of channels (branches, internet, telephone, etc) to get their complaints resolved, less educated and less aware customers in rural and semi-urban areas have not been educated on the complaint redressal mechanism. It is essential for banks to strengthen their complaints redressal system in rural and semi-urban areas so as to retain these people in the organised financial services sector and hence truly achieve the objective of financial inclusion.

Corporate houses and banks have started working as partners rather than having a client-vendor relationship. The growing need of banks in most transactions and advancement in technology is encouraging more and more investor classes to make use of banking products. This is forcing banks to become competitive and offer customised products.