Last year, the Reserve Bank of India (RBI) had formed a committee to examine the customer services provided by RBI-regulated entities (RE) such as banks, non-bank financial companies (NBFCs), and payment service operators.
This Committee’s mission was to monitor and review the quality of customer service, examine changing demands, identify best practices, and propose actions to improve the quality of customer service and the grievance resolution system in the REs, the RBI said in a press release issued on June 5, 2023. After significant deliberation with varied stakeholders, the Committee delivered its report on June 5. One of the recommendations is to make the Charter of Customer Rights enforceable after reviewing and updating it. Obtaining nomination in deposit accounts may be made mandatory to facilitate hassle-free settlement of claims in case of death of the account holder, is another recommendation. In case of loss of property documents, the regulated entity, should not only be obligated to assist in obtaining certified registered copies of documents at their cost but also compensate the customer adequately.
Here are the major recommendations made by the RBI’s Committee for Review of Customer Service Standards in RBI Regulated Entities (REs).
. The Reserve Bank may consider progressively moving towards “principle-based” regulation with regard to customer service in the REs. These may be based on well – recognised customer – friendly principles, including, but not limited to, Equitable and Fair Treatment, Transparency and Disclosures, Appropriateness and Suitability, Data Protection / Customer Confidentiality, Right to Grievance Redress, etc.
. The Reserve Bank may put in place a suitable structure of incentives and disincentives to encourage REs to take proactive steps towards enterprise-wide improvements in customer service and impart systemic strength to overall customer protection efforts in the financial sector while imposing a regulatory cost for entities where the quality of customer service is deficient.
. The Reserve Bank may consider making the Charter of Customer Rights enforceable after reviewing and updating it. The Reserve Bank may consider extending the Charter to Non Banking Financial Companies (NBFCs) also.
. The customer service regulation should be consolidated on the principle of same activity same regulation and apply to all the REs depending upon the activity being undertaken by them, irrespective of the category of the Res.
. With a view to ensure that there is uniformity in classifying, recording and reporting of complaints by the REs, the Reserve Bank should lay down a definition of a complaint under the IGR mechanism which should also capture the complaints which are outside the purview of RB-IOS. An indicative definition could be: “Any reference received formally through electronic or paper mode flagging a “deficiency in service”, as defined in RB-IOS, pertaining to all the activities which the RE undertakes and services it offers.”…..Read More
Source By:economictimes
