Instant blocking of lost ATM cards through SMS and immediate restoration of funds in case of non-dispensation of cash at an ATM are among a host of recommendations made by the Reserve Bank of India's committee on customer service.
If an ATM card has been misused by another person then on receipt of SMS about its use the customer should be able to immediately send return SMS to block it to prevent further withdrawals, the committee suggested.
The committee, headed by Mr M. Damodaran, former Chairman of the Securities and Exchange Board of India, made the SMS recommendation as it found that considerable time is lost in locating the numbers of accounts and phone numbers, which gives the fraudsters more time to commit fraud.
In transactions involving frauds where banks allege negligence by the customer as a reason for the fraud, the onus of proving negligence should be with the bank. Negligence, if any, on the part of the customer does not deprive him of customer/consumer rights, the committee said.
In the case of cash not delivered at ATMs, withdrawal through cloned cards, credit-card debits not authorised by customers, Internet banking frauds, and so on, customers should be afforded a temporary credit immediately, after taking a suitable undertaking.
Compensation
The compensation that can be allowed for transaction deficiencies should be in-built into the core banking system (CBS) software and not left to the discretion of the branch staff. Systems should be in place to ensure automatic credit and there should be provision for double the credit in case a complaint is received.
Call centres
As a measure of risk management, call centres as well as the online systems through Net banking should enable a customer to: fix individual transaction limits for debit/credit card use; debar or fix limits for purchase of electronic or jewellery items.
Further, the centres should allow a customer to manipulate the limits for add-on cards; activate/deactivate use of card internationally; and limit the use of card to any particular state or a defined area.
account opening forms
As customer relocation is possible and common these days, the Indian Banks' Association (IBA) should standardise the account opening form common to all banks, similar to formats available for loans and advances. IBA may consider setting up a trusted third party KYC data bank which can be relied upon for KYC purposes and perhaps hosted under the UID number of the customer.
Service Charges
The committee was of the view that charges for non-home branch transactions are not justified under CBS environment. Further, routine services such as passbook updation which are of informative nature should be made available to the customers free of charge.
Electronic payments
Users (utilities, airlines, and railways) of electronic bank platforms for making collections may offer small discounts to their customers to favour electronic payments. This would result in substantial savings to them in cash management.
Senior citizens
Banks should make arrangements to disburse pension to sick and disabled pensioners at their door steps. Banks may make use of Business Correspondents for this purpose. The committee wants automatic updation of the customers to the senior citizen category based on date of birth. Further, pensioners should get the convenience to submit life certificate in any CBS branch.
Home loans
In a floating interest rate scenario, banks should take steps to stop the practice of discriminating between new and old customers with identical risk profiles on the basis of interest rate offers.
Banks should not impose exorbitant penal rates towards foreclosure of home loans and a policy should be devised to ensure that a customer is allowed to make choices such as switching to other banks/financial entities to enjoy the benefits conferred by market competition.
Banks should automatically provide Annual Account Statement to home loan customers without request from them.
The Banking Codes Standards Board of India should be asked to rate the banks on customer service and also come out with a minimum benchmarking of banking services.
In case of sick banks where the accounts are frozen, a possibility to enable customers to immediately make use of a part of their insured deposit before the final fate of a sick bank is decided may be explored.