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Reserve Bank of India (RBI)’s Committee for Review of Customer Service Standards has proposed a slew of initiatives including a centralised database of KYC documents and a common portal for lodging and tracking complaints
The committee has also suggested extending the Deposit Insurance and Credit Guarantee Scheme to PPIs (prepaid payment instruments), as money in PPI wallets is in the nature of deposits and PPI issuers are also regulated by the RBI.
“The RBI may examine whether Deposit Insurance and Credit Guarantee Corporation (DICGC) cover can be extended to bank PPIs and later to non-bank PPIs based on experience gained,” the committee said in its report, released on Monday.
Also read: Simply put: DICGC cover
To Improve customer service
The committee has suggested progressively moving towards “principle-based” regulation, based on well-recognised and customer-friendly principles, and putting in place a structure of incentives and disincentives to encourage regulated entities to take pro-active steps for improving customer service and systemic strength.
The formulation of the committee was announced in April 2022 to evaluate and review the quality of customer service, examine evolving needs, identify best practices, and suggest measures to improve the quality of customer service and grievance redress mechanisms. It was set up in May 2022 under the chairmanship of former RBI deputy governor BP Kanungo.
Also read:DICGC rejects banks’ request to exempt certificates of deposit from insurance coverage
The central bank has sought comments and feedback on the report by July 7, 2023.
The committee has proposed making the Charter of Customer Rights enforceable and extending it to NBFCs, consolidating customer service regulations for all regulated entities, setting up a common complaint portal, strengthening banks’ grievance redressal mechanisms, developing and publishing a ‘Customer Service and Protection Index’, and conducting periodic and regular thematic studies across entities.
“The Reserve Bank, during its supervisory process, should take a view on the reasonableness of charges levied by REs for the services offered,” it said, adding that RBI may also consider asking the Indian Banks’ Association (IBA) to create a fund to directly compensate banks’ internal ombudsmen to avoid conflicts of interest.
As part of the governance structure for customer service, the committee suggested mandating nomination in deposit accounts, allowing settlement of deceased claims online, defining a timeline for claims settlement beyond which higher interest may be applicable, and maintaining a centralised database of KYC documents linked to a unique customer identifier.
UPI transactions
It also proposed that UPI transactions be kept outside the stipulated limits on debit savings account transactions, the use of digi-lockers be encouraged, a dedicated telephone helpline number be provided for senior citizens and differently-abled customers, standardisation of the ATM interface, the use of Customer Relationship Management (CRM) technology to collect customer-related information to create a central repository, and measures for fraud prevention.
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