The Hindu Business Line : Customer service: RBI wants 4-tier system

Milestone reached: Mr V. Leeladhar (left), Deputy Governor of RBI, and Mr Prakash P Mallya, CMD, Vijaya Bank, at the inauguration of 1001th branch of Vijaya Bank in Mangalore on Monday.

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Mangalore, Jan. 14 The banking system is being asked by the regulator, the Reserve Bank of India (RBI), to become more customer-friendly. The banks have been asked to consider a four-tier institutional machinery, covering all levels from the branch to the board, to improve standards of customer service.

Inaugurating the 1001th branch of Vijaya Bank here on Monday, Mr V. Leeladhar, Deputy Governor of RBI, said that the institutional machinery within the banks in the area of customer service should comprise a customer services committee on the board, a standing committee on customer service, a nodal department or nodal official in the head office and each controlling office, and a branch-level customer service committee.

Committees and services

Giving details, he said the customer services committee of the board — including invitees, experts and representatives of customers — can enable the bank to formulate policies and assess the compliance thereof internally and play a more proactive role with regard to complaints or grievances resolved by the banking ombudsman.

A standing committee on customer service will be a dedicated focal point for customer service in the banks and will periodically review the policies, procedures and working of the bank’s own grievance redressal machinery.

He said that a nodal department or a nodal official at the head office and each controlling office can help customers with grievances.

With this department or official, the banking ombudsman and the RBI can also liaise to enable the banks to take necessary corrective measures at the local level.

The branch-level customer service committee with a representation of customers, preferably senior citizens, is meant to provide a formal channel of communication between the customers and the bank at the branch level, he said.

Scope for improvement

“I hope such an institutional arrangement would provide for effective checks and balances within the banks, and enable them to maintain the highest standards of customer service through appropriate policy interventions,” Mr Leeladhar said.

The regulatory framework created by the RBI has contributed to significant improvement in the quality of customer service provided by banks.

But the very fact that the RBI had to resort to regulatory intervention in many aspects of customer service — which should be ideally be an exclusive domain of the banks as part of their customer relationship management — is a pointer to the considerable scope for improvement in the level and quality of customer service.

It also indicates the need for greater sensitivity to the customer needs and expectations, he added.