Four public sector banks slip to ‘average’ in compliance levels

Four public sector banks have slipped in their compliance levels to ‘average’ from ‘above average’ owing to a missing boss.

Without naming the banks, AC Mahajan, Chairman, Banking Codes and Standards Board of India (BCSBI), said: “Four banks have dropped in their extent of compliance…All are public sector banks. It shows also because there was no top boss. Although marginal, the banks have dropped on compliance on transparency and information dissemination.”

BCSBI is an independent body tasked with monitoring and ensuring that banks adhere to the banking codes and standards adopted by them in the true spirit while delivering their services.

According to a survey done in February, Mahajan said, “The compliance levels have improved from 50 per cent in 2009 to 78.3 per cent in 2015. It has been the lowest in transparency (76.7 per cent) and the highest in customer feedback (88 per cent).” The survey will be in public domain after it is submitted to the RBI and banks.

Last year, the RBI had received 85,000 customer complaints through the banking ombudsman. The single largest category of complaints, at 29 per cent, has been on banks’ compliance levels, followed by grievances pertaining to ATMs and credit cards.

“This is a matter of concern to us. It indicates lack of awareness amongst branch level staff about these codes. Even the awareness of both the codes is extremely poor among banks’ customers. It is clear that the banks are not doing enough to publicise the codes,” Mahajan said, adding that the codes are revised every three years, the last being in January 2014. He said, “The problems need to be corrected in public sector banks. The foreign banks are strong with their online mechanism and are performing the best. Some private and public banks are also doing well.”

Besides periodic revision of the Codes, the BCSBI undertakes thematic customer-centric studies, such as pertaining to retail loans, and banking services, among others, based on which it rates the banks.

In the survey conducted by 100 retired RBI and bank officials, BCSBI sought feedback from about 4,100 customers from over 2,100 branches of 47 banks. It rates banks on five parameters — information dissemination, transparency, customer centricity, grievance redressal and customer feedback.

Seeing an improvement from last year, the number of high-level compliance-rated banks has increased to 14 from five last year. Those in the “above average” category have seen a drop of three banks to 23 (26 last year), while 10 banks have hit the “average” rating against 17 last year.

Bank customers suffer from mis-selling of financial products, hidden charges, failure of customer service, no grievance redressal on fraudulent transactions or loss of ATM cards, among others.

Soon, the RBI will come out with operational guidelines as it has asked banks to appoint a Chief Customer Service Officer as Internal Ombudsman.

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