Tag Archives: customer service

banking ombudsman

RBI has released its annual report on the Banking Ombudsman Scheme for commercial banks, NBFCs & digital banking. Some of the statistics are staggering to say the least.

  1. The volume of complaints received under all the three Ombudsman Schemes increased by 22.27 percent on an annualized basis and stood at 3,03,107 during the reported period.
  2. The BOS (the scheduled commercial banks) accounted for 90.13 percent of total complaints (i.e. 2,73,204) received under the three Ombudsman Schemes. The number of complaints received under OSNBFC and OSDT stood at 8.89 percent and 0.98 percent respectively, of the total number of complaints. I guess OSDT (digital banking) will start growing exponentially in the future.
  3. The major areas of complaints under the BOS pertained to (a) ATM/debit cards; (b) mobile/electronic banking; and (c) credit cards, which collectively accounted for 42.74 percent of the total number of complaints as compared to 44.65 percent in the previous year. Under the OSNBFC, major areas of complaints were (a) non-adherence to Fair Practices Code; (b) non-observance to RBI directions; and (c) levy of charges without prior notice, accounting for 75.32 percent of the complaints as compared to 63.23 percent in the previous year.
  4. The overall disposal rate improved to 96.59 percent from 92.52 percent in the previous year, despite higher volume of complaints, which can be attributed to the end-to-end digitization of complaint processing in CMS. (i will not go much by the disposal rate, because typically banks give a gross unsatisfactory reply and close the complaint at their end, they have not checked whether the compliant has actually been redressed or the customer is fully satisfied with the redressal. For banks, merely sending replies is tantamount to closure, which is not right)
  5. Of the maintainable complaints, 72.67 percent were resolved by mutual agreement i.e. through intervention of the Ombudsman offices / conciliation / mediation efforts.
  6. Lot of issues never get addressed at all, for eg. bank charges on return of cheques is too exorbitant, Why should we pay the charges, when it is not our fault at all, there should be some other mechanism for this, banks should not collect charges from the customers who have deposited cheques payable to them. If the cheque is returned due to any reason, it is not the customer’s fault, it is that of the drawer of the cheque. He should be penalised. Many a times, cheques are returned because the KYC is not done at the drawer’s end. Seriously this is another bug bear and a major irritant, why should clients keep doing KYC time and again. I keep getting notification from banks and other intermediaries reminding me to do the KYC again and again.
  7. Second irritant is that nowadays with Core banking concept, one can deposit the cheques at any branch, not necessarily at the home branch. So what happens is that the customers deposit cheques in our favour in our bank branch nearest to their office, and when that gets cleared, the bank statement gives only the cheque no. & name of the drawer bank. The name of the drawer is never mentioned anywhere. With the result we are unable to know who has deposited that cheque into my account. This is something so basic. Why is that not being done. It will help us in knowing who has deposited the cheque in our favour in some other branch of our bank.

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periodic updation of KYC

RBI has vide its circular dated 30th December, 2021 given relief from the periodic updation of KYC by regulated entities, of its existing customers until 31st March, 2022 in view of the resurgence of covid in certain parts of the country.

Otherwise banks have to do periodic KYC updation and where KYC updation could not be done for any reason, banks had powers to put restrictions on customers’ bank accounts including freezing of bank accounts.

This periodic KYC updation is probably the biggest bugbear of banking customers today. Its needless, its time consuming, with lots of documentation and gives unnecessary tension and headaches to customers. Gone are the days when KYC was rarely sought, and i remember way back in 2004 when i opened a current account, it took all of 5 minutes. Nowadays it takes anywhere from three weeks to 2 months with endless documentation and frustration and delays. Bankers think that every body is a terrorist whereas the bankers themselves are responsible for the global money laundering taking place.

Hypocrisy sucks sometimes.

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grievance redressal mechanism in banks

RBI circular dated 27th January, 2021 on strengthening the grievance redressal mechanism in banks. Details are in the above circular.

Does’nt look like much because banks are being asked to give more disclosures on complaints against banks, recovery of costs from banks for the complaints received against them, undertaking intensive review of the grievance redressal mechanism and supervisory action against banks that fail to redress customer grievances.

For me, it looks like eyewash to fool the gullible public, because banks are totally insensitive to customer grievances. They just don’t care as long as their salaries are given to them.

In my office complex there is on ATM machine of Bank of Baroda, every time i go there to withdraw money, it asks for all the details including the PIN and the amount and then comes the message “unable to dispense cash now”. Bloody hell, if there is no cash in the machine, then why does it not pop a message immediately on inserting the card. Secondly i have tweeted against this to BOB and their MD numerous times, yet nothing seems to move them. They just don’t care.

Now after the merger of public sector banks, the internet banking portals of banks have gone haywire. Allahabad Bank has merged with Indian Bank. Post merger, i find the Indian bank site acting very funny, sometime it loads, and sometimes it does’nt login at all. After login the site hangs up frequently, and that too after entering the transaction password. How the hell are we supposed to do any digital transaction if such is the situation. The so called Digital India initiative of the PM is all crap. Backend infrastructure is all lousy. Again i have tweeted numerous times to the Indian with cc to RBI, but nary any action on this matter.

These are just two of the instances of rotten customer service by banks that come to my mind immediately. I am sure there will be many.

Its as we say in India, ram bharose zindabad!!

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insurance ombudsman

IRDAI circular dated 15th October, 2020 mandating all public sector units general insurance companies to appoint nodal officers in all their ombudsman centres. Nodal officer at each centre will be responsible for co-ordinating and liaisoning with the chief ombudsman of the insurance company.

  1. The lnstitution of lnsurance Ombudsman plays a vital role in providing
    resolution in timely and cost effective manner. lnsurers need to have a greater liaison with every lnsurance Ombudsman office in order to ensure that the complaints are disposed of in a timely manner.
  2. lnsurance Ombudsmen have expressed that they are facing difficulties in
    dealing with cases of PSU General lnsurance Companies in the absence of any responsible Officer who can liaison with their Offices to ensure that the self contained note is filed in time and documents/information sought by lnsurance Ombudsman is submitted without any delay.
  3. To ensure proper and timely disposal of complaints, the following procedure shall be adopted by all the PSU general insurance companies:
    a) Appoint a “Nodal Officer”, not below the rank of Deputy Manager for
    each of the 17 Ombudsman Centres.
    b) The names /Phone No’s including mobile No’s / e-mail id’s of the Nodal
    Officers shall be shared with the Ombudsman/ECOl.
    c) The Nodal Officer shall be responsible for placing self contained notes
    before lnsurance Ombudsman within the specified timeline. He/she
    shall also ensure that all the information/documents called for by
    lnsurance Ombudsman are submitted in a timely manner.
    d) The Nodal officer shall ensure that the concerned officer of the
    lnsurance Company attend the hearing on the date and time specified
    by Ombudsman in the notice for hearing.
    e) The Nodal Officer shall ensure compliance with the recommendation or Award of the Ombudsman as the case may be within the specified
    timeline, and update the details of compliance in Complaints
    Management System of ECOI.
  4. The Public Sector General lnsurance Companies shall designate Nodal Officers for all the offices of lnsurance Ombudsman Office latest by 2010.2020 and forward the list of the same with contact details (e-mail id, Phone no.) by uploading the same in their website. As and when there is a change in the said list, the same shall be notified to ECOI immediately so as to enable them to keep the list updated at all times. The ECOI shall share the updated list with IRDAI from time to time.
    The above procedure shall come into force with immediate effect.

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Levy of penal charges on non-maintenance of minimum balance in savings bank accounts

RBI has vide its circular dated 20th November, 2014 issued new guidelines on levy of penal charges on non-maintenance of minimum balance in savings bank accounts. The circular is available at this link i.e. http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=9343&Mode=0

The salient features of the new guidelines are as follows

Levy of charges for non-maintenance of minimum balance in savings bank account shall be subject to the following additional guidelines:

(i) In the event of a default in maintenance of minimum balance/average minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS/ email/ letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice, penal charges will be applicable.

(ii) In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.

(iii) The policy on penal charges to be so levied may be decided with the approval of Board of the bank.

(iv) The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. A suitable slab structure for recovery of charges may be finalized.

(v) It should be ensured that such penal charges are reasonable and not out of line with the average cost of providing the services.

(vi) It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.

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Customer Service in ATM transactions

RBI has issued circular dated 1st August 2013 regarding enhancement in customer service in ATM transactions. Some new features have been brought into force in this set of instructions to banks. They are:

1) Message regarding non-availability of cash in the ATM should be displayed prominently in the ATM even before the customer initiates the transaction i.e. before he inserts the card in the slot. Many a times we insert the card in the slot but no money comes out and we have to only guess that there is no money in the ATM – so to avoid the guessing work RBI has mandated that information be prominently displayed at the ATM regarding non-availability of cash. This is a good move by the RBI.

2) The ATM Id should be displayed somewhere on the ATM. This is to facilitate the lodging of grievances by customers quoting the ATM id. In the absence of the ATM id, the customers had to give the address of the ATM where it is located. ATM id makes it easier for the bank to locate the ATM.

3) Banks may pro-actively register the mobile numbers/ e-mail ids of the customers to send out alerts to them. I thought this was essential rather than discretionary so RBI should have insisted on this rather than said “may pro-actively”. Today almost everybody who has a bank account does necessarily have a mobile phone and in most cases also an e-mail id.

4) RBI has introduced the concept of time-out sessions i.e. each transaction will have a time out session where within a stipulated time which will be a reasonable time, the transaction will be timed out and if the customer has not finished the transaction by that time, then he has to afresh initiate the transaction. I feel RBI has to proceed carefully in this direction because many ATM users are senior citizens, ladies, physically or mentally challenged persons or functionally challenged persons for whom carrying out transactions may take some time. Therefore the fixing of time limits for time out sessions should be carefully done and reviewed from time to time. I feel many customers may find this process to be cumbersome if they have to keep on re-entering the transactions again and again.

Other instructions are routine in nature. The copy of the circular can be found at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8286&Mode=0

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