Customer service at banks—a step forward

While the BCSBI has already laid down standards for the service quality, it has now to go a step further to standardise the systems and procedures that have a direct bearing on the customers to improve the quality of service by harnessing technology to the maximum extent 

It goes to the credit of the Reserve Bank of India (RBI) that it has been constantly goading commercial banks to improve customer service but the general public still feel that a large number of banks in our country are neither customer friendly nor sensitive to the needs of the customers. Though there may be some pockets of excellence in some small rural areas depending upon the exuberance and the initiative of the branch manger concerned, the general impression of the banking public is that the banks today hardly  make an attempt to know their customers and that the bank’s staff in metros and in larger towns have neither the time nor the inclination to solve the customers’ problems by a face-to-face interaction with the customers, who, more often than not, are left to fend for themselves. (Read: “Do banks care for a customer” – Monelylife dated 14 November 2011).

The Banking Codes and Standards Board of India (BCSBI) has done an excellent job of codifying the standards for customer service in banks and making its member banks accept these codes for implementation.  Laying down codes and standards of service to be followed is the easiest thing to do, but making member institutions with a large number of branches in far flung places to follow these codes is totally a different ball game altogether. However sincere the top management of banks may be in agreeing to implement these codes, at the grass root level the problems of the operating staff are totally different and unless these issues are tackled both by the bank managements and regulatory authorities together, service at the branches will not improve and the account holders will continue to suffer, many of them silently with nowhere to go. Hence there is a need to standardise certain critical systems and procedures to ensure a paradigm shift in the way in which banks function today by harnessing technology to the maximum extent and the BCSBI can play a pivotal role in achieving this objective.  

The BCSBI was established with the objective “to plan, evolve, prepare, develop, promote and publish voluntary comprehensive codes and standards for banks, for providing for fair treatment to their customers.” All other activities of BCSBI revolve around this objective. Based on this objective, BCSBI has done the job of preparing and promoting the Banking Code, and banks have implemented the code in right earnest. But that has not made much of a difference in the life of the ordinary citizens who continue to feel that the counter service at the banks leaves much to be desired. 

To strengthen the hands of the operating staff, it is necessary to go beyond the code and standardise certain systems and procedures obtaining in banks which have a bearing on customers and affect the quality of service provided to them. The BCSBI may, therefore, enlarge their role and ensure standardisation of all those systems and procedures that affect the quality of service which has been prescribed in the banking code. Though the objectives of the BCSBI do not spell out this aspect of standardisation in clear terms, this is implicit in its objectives and unless this is done, the very purpose of introducing the code will be defeated.

Here are a few examples of systems and procedures requiring standardisation that will help in improving the customer service in banks. 

1. Presently, savings bank (SB) and current accounts (CA) have numbers ranging from nine digits to 16 digits depending upon the core banking solutions used by each bank. This is causing considerable difficulties at the operational level, particularly while handling NEFT/RTGS and ECS transactions. If either the customer or the computer operator at the bank makes a mistake of omitting one zero in the centre of the account number, the transactions gets bounced, resulting in the branch manager facing the wrath of the customer. If these accounts numbers are standardized into say 12 digits, (or even 14 digits as may be decided by BCSBI) everyone in all the banks will accept customer requests only if they provide full 12 digit account numbers and the computer operator will also be required to punch all the 12 digits, or else the computer will be compelled to reject the transaction, thereby ensuring that the account numbers are correctly entered and fed into the computer. Everyone knows today that a mobile number has to have 10 digits; otherwise it is an invalid number. Similarly if  the SB and CA accounts, too, have a certain number of digits fixed in respect of all banks, the chances of making a mistake are much less. And to distinguish between SB and CA, these numbers can be pre-fixed with letters of SA for savings accounts and CA for current accounts, making it a near fool-proof system for effecting remittance from one bank to another. 

2. As an extension of this uniform numbering system for all operative accounts, it would be of considerable help both to the banks and customers if these account numbers are made portable from one bank to another on the lines of mobile number portability recently introduced in our country. This will obviate the need to comply with the KYC (Know Your Customer) norms once again when a customer wants to move from one bank to another for whatever reasons. The transferee bank, too, need not comply with KYC norms again as it has already been complied by the transferor bank. Besides, this will help those customers who want to take advantage of the different rates of interest on SB account offered by banks now in the wake of deregulation of SB interest rates by the RBI, without having to open multiple accounts.  

3. At present there is no uniformity in the matter of tax deducted at source by banks. A number of banks follow a method of giving net credit after deducting tax, without showing the amount of tax deducted in the account. Only a few banks credit the gross interest and on the same day debit the tax to be deducted there from, thereby showing both the debit and credit in the account for the benefit of the customers. It is necessary for all banks to follow a uniform method of showing both the gross interest and the tax deducted there from to enable the customer to have this information readily available without the need to ascertain from the bank. 

4. The statement of accounts provided by banks today does not give a complete picture of the customer’s relationship with the bank, due to which the customer has to constantly seek additional information from the branch, putting considerable burden on the operating staff in the branches. To obviate this difficulty, a standard system should be devised whereby  every bank will  furnish in a structured format complete information about the customer’s various  deposit accounts and also loan accounts, if any,  with the bank at a stretch once a month while sending the statement of the SB/CA to the customer. This should also include the gross interest credited to the account and the tax deducted at source till the date of the statement on a cumulative basis month after month. This will be of great value to the customers, and will considerably reduce avoidable interaction between the customers and the branch, benefitting both the parties immensely. 

5. The BCSBI can consider setting up a centralised agency to provide a record of compliance of KYC norms, which can be shared by all banks whenever a new customer approaches them to open an account. This will obviate the need for each bank asking for several documents whenever a potential customer approaches them and will facilitate quicker disposal of customers also. This has been successfully done by CDSL Ventures for the mutual fund industry. The banking industry, too, can follow this example and BCSBI could provide the support required set up such an arrangement, which will go a long way in standardising the opening of new accounts by the banks.  

These are only an illustrative and not an exhaustive list of areas requiring standardisation and the BCSBI should go deep in to the functioning of banks and identify areas affecting customer service in banks and need standardisation. The key to improve customer service is only by communicating maximum information to the customer through normal channels, without, however, overloading them with information not relevant to him.  The greatest achievement of the BCSBI will be when the customers of banks feel the perceptible improvement in the quality of service experienced by them, which can only be realised by strengthening the hands of the counter staff of banks by harnessing technology to the maximum extent possible. 

(The author is a banking and financial consultant. He writes for Moneylife under the pen-name ‘Gurpur’)


Nagesh Kini FCA
1 decade ago
Not only bank customers can access their accounts/pass books on the net. The need of the hour is the Pass Book Printing machine that can avoid long Qs.
The Union Bank has the practice of the same clerk punching the pass book as well as issuing tokens for withdrawal of cash. The pass book printing machine can mitigate one unproductive function.
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