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Our Bureau

IBA INITIATIVE

Kolkata , June 23

The next time a bank fails to provide you with the right sort of service, it may have to shell out money by way of compensation.

At least, that is what the Indian Banks' Association (IBA) seems to be proposing.

An IBA draft has outlined the compensation payable to clients for losses suffered by them on account of deficient service, indicated Mr K. N. Prithviraj, CMD of Oriental Bank of Commerce, while addressing a meeting organized by Ficci on Friday.

The move reflects a "major change, in line with the global standards", Mr Prithviraj said, adding that the IBA initiative would help enhance credibility of banks and help them gain depositors' trust.

The association, it may be mentioned, pointed out that it had introduced a "formal system of self-discipline" in the early 1970s, the modalities of which were chiefly suited to a fully-regulated environment.

The IBA Web site, underlining the recent changes in the context of financial sector reforms, has also referred to the need for its revision.

Mr Prithviraj also alluded to a recent GOI communication, which has effectively enhanced the lending powers of CMDs and EDs of banks. These have been raised in line with the latest dynamics in the Indian economy, he said.

Financial inclusion, it is pointed out, will play an important role in the days ahead. Banks need to reach out to newer, untapped segments of the market in order to achieve their goals, he said.

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