The 3rd session of the Consumer Guidance Seminar on Banking Services elaborated the effectiveness of RBI guidelines issued in the interest of consumers. The speakers included Dr Ramalinga Kannan, who has over 30 years of experience in the financial sector - RBI, International Monetary Fund, and IRDA; and Mr. Madhu Srinivas, a policy research analyst from Dvara Research. They pointed out that the RBI is not only responsible for the monetary policy but also the maintenance of financial stability.
In order to protect the interests of consumers, the Reserve Bank of India established a Consumer Service Department (CSD) in 2006, the functions of which included:
Dissemination of instructions/information relating to customer service and grievance redressal (ii) Overseeing the grievance redressal mechanism in respect of services rendered by various RBI offices/departments (iii) Administering the Banking Ombudsman (BO) Scheme (iv) Acting as a nodal department for the Banking Codes and Standards Board of India (BCSBI) (v) Ensuring redressal of complaints received directly by RBI on customer service in banks (vi) Liaison between banks, Indian Banks Association (IBA), Banking Codes and Standards Board of India (BCSBI), BO offices and RBI regulatory departments on matters relating to customer services and grievance redressal
In July 2014, RBI issued a master circular on customer service. Later, in December 2014, the RBI released a Charter of Customer Rights, with overarching principles for the protection of bank customers and enunciating the ‘five’ basic rights of bank customers. These are (i) Right to Fair Treatment; (ii) Right to Transparency; Fair and Honest Dealing; (iii) Right to Suitability; (iv) Right to Privacy; and (v) Right to Grievance Redress and Compensation.
RBI has advised the IBA and the (BCSBI) to formulate a “Model Customer Rights Policy” encapsulating the principles enshrined in the Charter.
Further, while explaining about the role of Banking Ombudsman, they stated that the body cannot reject a complaint randomly, and the reasons for the same must be given in writing. If the customer is not satisfied, s/he may escalate the matter to RBI and/or approach the appropriate Fora to seek justice.
During the Q and A time, participants wanted to know about the steps taken by RBI to address the issue of NPAs and also why RBI did not publish names of wilful defaulters. The panellists stated that the growth of NPAs was not sudden but had evolved gradually and, in their opinion, the reason for not publishing the names of wilful defaulters was that publicising such information would be against the revival of the already distressed business units.
Digital Transactions - How safe are we?
The fourth session started with a case study, with an ex-banker, Ms. Sowmya Balakrishnan, narrating her harrowing experience. Her wallet was stolen in a moving bus and the perpetrators managed to withdraw a huge sum of Rs. 1.75 lakhs from her bank account through ATMs, using her debit cards. She registered her complaints with the banks immediately. She also filed a complaint with the police the same day and shared a copy of the petition with the banks. However, the banks were quite unresponsive and after a long wait and repeated follow-ups, she was told that the liability to keep the PIN numbers safe laid with her. Being an ex-banker, Ms. Sowmya said that she did not have easily traceable characters as PIN and was very conscious about not storing PIN numbers. Despite this, her PIN numbers were hacked and the cards misused! She approached CAG who advised her to approach the cyber crime department of the police.
One of the participants intervened and said that tracking frauds were fairly possible with credit cards but with debit cards, it was difficult as debit card transactions were equivalent to cash transactions.
Ms. Sowmya said that credit card companies and banks should act quickly and block cards as soon as misuse was reported, instead of asking too many questions, as each and every second mattered.
Later, Mr. Prem Anand, Joint Secretary, Cyber Society of India, spoke. He explained the basic concepts of commerce, e-commerce, and the problems associated with e-commerce including consumers’ risks, merchants’ risks and cyber hijacking amongst other issues. He elaborated on why and how the internet could be insecure for online transactions, throwing light on e-payments and cloud storage. Subsequently, he detailed about the significant advancements made towards ensuring cyber security such as the Secured socket layer, Mondex (Mondex, is a smart card electronic cash system, implemented as a stored value card), e-cheques and its working and discussed the advent of technology in this sphere from emerging modes of payment, smart cards, plastic currency, micropayments (a very small payment made online), net bills. He discussed types of cyber frauds including social engineering, malware, which is specifically designed to disrupt, damage, or gain authorized access to a computer system.
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