Reserve Bank of India (RBI) Governor Sanjay Malhotra asked banks to avoid calling customers repeatedly for ‘know your customer’ (KYC) documents. A PTI report stated that the RBI governor made it clear that submitting the documents to an entity overseen by any financial regulator makes it possible for others to access the same from a common database, and termed the repeat requests as “avoidable inconvenience”. Sanjay Malhotra was speaking at the annual conference of RBI Ombudsmen. The theme of the Conference was “Transforming Grievance Redress: The AI Advantage”.
The RBI governor insisted that the banking sector needs to ensure that once a customer has submitted documents to a financial institution, they do not have to obtain the same documents again. He rued that most banks and NBFCs have not enabled their branches or offices to access information from the central database due to which customers have to face the avoidable inconvenience.
A press release by the RBI said that Sanjay Malhotra emphasised the need for significantly enhancing customer experience so as to obviate any need for grievance redressal. He exhorted the Regulated Entities to strengthen their internal grievance redress framework to effectively address grievances at their level and avoid escalation of grievances to the RBI ombudsman.
The comments come at a time when the banking customers repeatedly complain of inconvenience due to KYC re-submission requests, especially on social media platforms.
Furthermore, the PTI report also stated that Sanjay Malhotra warned banks against misclassifying customer complaints to suppress its numbers, saying doing so amounts to a “gross regulatory violation”. He said in FY24, banks received 1 crore customer complaints and the number will grow higher if one were to include complaints against other regulated entities. He further added that 57 per cent of these required mediation or intervention by RBI ombudsmen. “All of you will agree that this is a highly unsatisfactory situation and needs our urgent attention,” he said.
The RBI governor also advised leadership at banks, starting with the managing directors down to the branch managers, to have to keep time off every week for complaint redressal. This is a “must” for all the banks, he said, adding that CEOs across the world find time in their schedules for this.