Banking Codes are Here, Don’t Let Banks Take You For a Ride
Experts think that with the burden of guilt likely to shift to the seller, customers should make the most of the code of commitment, which can quickly redress their grievances, says Preeti Kulkarni
Taking your bank to task for mis-selling products and deficiency in services is going to be a little easier. If the Reserve Bank of India (RBI) has its way, your bank’s services framework will make the transition from ‘caveat emptor’ to the ‘caveat venditor’ principle. In other words, ‘let the seller beware’ concept could take centrestage in banking in coming days.
“It is a counter to caveat emptor and suggests that seller can also be deceived in a market transaction. This forces the seller to take responsibility for the product and discourages sellers from purveying products of inferior quality. The principle vests the burden of effort of proving that the shortcoming deficiency of service was absent on the seller of the product,” said Deepali Pant Joshi, executive director, RBI, in a Banking Codes and Standards Board of India (BCSBI) conference last week. Mis-selling financial products, particularly life insurance policies, is a common grievance among customers. While the onus could shift to sellers or distributor banks, a customer should also be aware of her rights and the recourse available. Keep yourself updated of the measures taken by RBI and BCSBI to protect customer interests.
According to BCSBI chairman AC Mahajan, awareness of the code of commitment to customers is low even among the compliance officers at many bank branches. The new BSCBI code of commitment has already incorporated a clause that requires banks to sell ‘suitable’ and ‘appropriate’ products. Moreover, banks cannot force you to buy insurance policies in return for the banking service you may have applied for. If you feel its officials have violated the code, you can file a complaint against your bank.
Relief from Electronic Frauds
Banks have to take the responsibility for electronic frauds, unless they can prove that the customer was negligent. This has been a prime cause of concern for many cardholders, with reports of ATM and Internet frauds on the rise. As long as you inform your bank about any suspected fraud immediately, you need not worry. Your liability ceases the moment you notify the bank. Also, if the fraud has occurred due to a security breach in the bank’s system, you can claim a compensation.
Similarly, in case of card-related frauds, where there is a dispute over the customer compromising the sensitive information, it’s the bank’s responsibility to prove that the customer was indeed at fault.
Updated Credit Information
Many borrowers complain that their credit reports are looked upon as ‘unfavourable’ despite clearing all dues, particularly if they have repaid the loan under a one-time, compromise settlement with the bank or the credit card issuer. The code of commitment specifically assigns the responsibility of updating credit information records of borrowers to the banks. “If your loan account has been in default, but thereafter regularised, we will update this information,” the code says. Keeping yourself abreast of these codes and RBI’s measures on customer service, will help you raise and escalate your complaint in time. The first stop is always at the customer service cells, followed by the grievance redressal officer. “If you do not receive a satisfactory response, you should approach the bank’s nodal officer. Many complaints get resolved at this level,” says VN Kulkarni, chief credit counsellor with the Bank of Indiabacked Abhay Credit Counselling Centre. If it doesn’t, however, you can escalate the matter to the Banking ombudsman’s office.