Sucheta Dalal :‘Most people don’t prefer to fight with their bankers’
Sucheta Dalal

Click here for FREE MEMBERSHIP to Moneylife Foundation which entitles you to:
• Access to information on investment issues

• Invitations to attend free workshops on financial literacy
• Grievance redressal


You are here: Home » What's New » ‘Most people don’t prefer to fight with their bankers’
                       Previous           Next

‘Most people don’t prefer to fight with their bankers’  

March 10, 2010

The questions and answers (Q&As) below are part of a discussion that took place on International Women’s Day at a financial literacy workshop organised by Moneylife Foundation. Kishori J Udeshi, Chairperson of the Banking Codes and Standards Board of India (BCSBI) answered the questions asked by the audience. Earlier, the Moneylife Foundation felicitated three women activists who have made a difference to society, fighting for various causes and standing up for the middle class. Ms Udeshi, the former deputy governor of the Reserve Bank of India, felicitated Ms Indrani Malkani of the Malabar Hill Residents Association, Ms Anandini Thakoor of the Khar Residents Association and Ms Sumaira Abdulali of the Awaaz Foundation. Here is the second part of the Q&A.

Audience (ML): In many cases, there is no cash in bank ATMs. What does the customer do? How do we hold banks accountable for this?

Kishori J Udeshi (KJU): This is unfortunate. I do not have an answer to this. I am sure this not a regular feature that they (the ATMs) don’t have cash every day. If they don’t, then you should file a complaint. I don’t think you’ll have written to the Reserve Bank of India (RBI) on this, which can put it to rest. Honestly, I have never heard of this issue, but since it is of recent nature, we could look into it. What we used to hear, and that was addressed by us, was that customers were withdrawing cash and the debit went through but no cash was dispensed. Sometimes, they would get the cash and then there would be double debits and then the accounts would go below minimum. Therefore, we addressed that issue and said that banks must compensate within 12 days and also pay interest on the delayed portion if necessary.

In an unrelated matter, some banks insisted that all fixed deposit holders must insure. The problem is that people don’t fight for their rights. Only when BCSBI took it up did they (the banks) make it optional. Anything that is forced is violating the code principles. Remember, the principal right of a banking customer is choice.

ML: What is the procedure for getting a complaint resolved with a bank?

KJU: Each bank has a grievance redressal policy. Each bank has some pointers that (spell out) what you should do, if you have a grievance. It is on their websites, if you want to read it. Having said that, if you have a complaint, (and) you take it up with the bank, the branch manager is required to address it within a month. If he does not do so then he is required to escalate the matter to his higher authority. And if he does that and it is still not addressed within say, six weeks’ time, you can take it up with the banking ombudsman. They are all over India, in every state. But if you go to a banking ombudsman without doing the earlier procedure, then they are not required to take (up) your complaint. But now the RBI has said, as most people don’t prefer to fight with their bankers (they prefer to cry on the shoulder of the banking ombudsman), even if they come directly, attend to it. So the banking ombudsman does see to a complaint even if you have not complained to the bank. Now after that if the matter is not settled in your favour, you can appeal because there is an appellate authority. And then after that, if you still are not satisfied, you can go to the consumer court.  

It is only after the BCSBI was set up and only when the codes were evolved that service conditions and negligence has fallen within the banking ombudsman. This was not the case earlier—it was only loans and charges-related disputes between a customer and a bank, which were being considered, but now the whole ambit has widened. So whatever your rights as enshrined in the code, if they are violated, the banking ombudsman has to adjudicate.

You can file a complaint online also. Actually, every branch is required to display the name and address of the banking ombudsman—it is compulsory. And if you don’t find it in your branch, you can complain.

ML: Are transactions through Internet banking safe?

KJU: Let me tell you about credit-card transactions. If you know you have not carried out such a transaction, then I suggest that you see the code. It is written there that the bank will have to prove that you undertook those transactions. Please read the code.
ML: How can we open accounts in the names of say, our maids or servants?
The easiest way would be if one of you (husband or wife) had an account with the bank for six months then if you were to say that I know this person, then from your reference they should be able to open the account. But that account is a no-frills account. But if you have an account with a private bank, let me tell you they don’t want maids to come into their air-conditioned portals. So if you are willing to have an account with a public sector bank or any other bank then maybe your maid will be able to open an account. I am sorry but that is the ground reality. I don’t know how to tackle this issue. It is difficult but that divide and disconnect is still there and they don’t want some class of people to enter. For the present, avail an account from where you can get it.

ML: We have seen cases where bankers have robbed pensioners of their savings through various deductions...
I feel very disheartened by this because we have reviewed the code and in 2009 we have included this point. It had hurt me to the core, when I have seen pensioners come to me with complaints saying that they were never told about the deductions. In the case of one woman who could not walk, she said that she did not know this and that the banker told her to come after five years when she would get her amount. And happily she went after five years, when the banker told her not to worry as the amount is entirely credited to her account. When she got her passbook and checked, she saw that the amount she received was not what was told to her. It was less by at least Rs5,000 or Rs7,000. For a pensioner, even Rs7,000 makes a big difference. So she went from pillar to post—she went to the Indian Banks Association (IBA) and the banking ombudsman. I was so upset with the whole thing, I phoned up the chairman and told him to give her the Rs7,000. But that’s not the way to do things normally. So now, we have reviewed the code and have introduced it as a system. If the banker doesn’t explain and check if the customer has understood it and the customer is given an option form, then they are liable, because they can’t just deduct an amount like that.

ML: What do we do when banks lose our crucial documents?
They are required to not only make good the loss of documents, but also compensate (the customer) if necessary. We have also said that if your dues have been settled, every bank has to return your documents within 15 days or compensate you for the delay.

ML: In my case, one bank asked me to provide my wife’s separate residential address proof under the KYC norms. Is this required at all?
I have not heard of this. But actually, it is not necessary. Some bankers will forget everything and set up accounts. It all depends on that individual. We find many people at the bank counter, people down below with attitude or negligence that contributes to bad service. It is baffling why no action is taken. It is because there is no system of reward and punishment so this continues. No action is taken at the ground level. What is the use of saying we stand for the code or financial inclusion and then you do this? They ask her 50 questions on her age, address and what not, then who would want to hold an account? Something should be done about staff attitude and it can come through training. You need to have the right people operating those posts.

ML: How can single women protect themselves against discrimination while taking loans?
Banks can get (off) by doing this because they do not write (down) such things on paper. They can’t have it is an official policy. They feel there is a risk in lending to women—whether they are credit-worthy, whether they will get their money back. Where there is no proof, it’s very difficult to fight and file a complaint and take it as a grievance redressal, because this becomes a credit decision and I cannot interfere in a credit decision. To say there is discrimination, I need proof. I can take up the case informally, (with) no guarantee of success.

ML: Can banks charge certain fees for updating passbooks?
Banks cannot charge any fee for updating passbooks. Only if you ask for a second statement of account because you have lost your first statement then they may charge some fee. They cannot charge you for the first time. If you go to another branch other than your home branch of the same bank and they are charging some fee for updating your passbook, it is wrong. I will look into it. — Moneylife Digital Team

-- Sucheta Dalal