Moneylife Campaign - RBI asks banks to provide details of transactions to customers
Taking cognizance of several complaints from customers, letters and memorandums, the Reserve Bank of India (RBI) has once again asked banks to record details of transactions in the passbook or statement of accounts of customers. The RBI had issued similar instructions some 13 years ago, which banks have not been following.
In a notification issued on 22 June 2017
, the central bank says, "It has come to our notice that many banks still do not provide adequate details of the transactions in the passbooks and/or statements of account to enable the account holders to cross-check them. In the interest of better customer service, it has been decided that banks shall at a minimum provide the relevant details in respect of entries in the accounts."
RBI expects banks to share transaction details like the name of the payee, mode of transaction and name of transferee bank. For bank charges, the lenders have to provide nature of charges, like fee, commission, fine or penalty and reasons for the charges. (See details of entries that banks have been asked to record and share with customers below this article)
"Banks shall also incorporate information about ‘deposit insurance cover’ along with the limit of coverage, subject to change from time to time, upfront in the passbooks," RBI has said.
As part of its advocacy efforts, Moneylife Foundation has led the effort to fight for customer rights. Despite our efforts, we have seen very little evidence on the ground of concrete action by the regulator.
One of the key points of the petition is about capturing and sharing with customers the details of bank transactions, like name, branch and account number of sender and receiver. "...even a single digit mistake in the 10-digit account number causes a person to lose money with no practical remedy. This has a very simple solution, which is to capture the name, branch and account number of the sender and receiver. RBI must modify its systems to capture and share details of both sender and receiver and ensure effective grievance redress," the letter given to Mr Moily says.
However, what is shocking is that though on 10 April 2004 banks were advised to avoid making inscrutable entries in passbooks or statement of accounts, 13 years later banks were still not following the advice.
In 2004, the RBI-appointed Committee on Procedures and Performance Audit on Public Services, in its Report No. 3, had stated, "...banks invariably show the entries in depositors’ passbooks/statement of accounts as ‘By Clearing’ or ‘By Cheque’. Further, in the case of Electronic Clearing System (ECS) and RBI Electronic Funds Transfer (RBIEFTR) banks invariably do not provide any details, even though brief particulars of the remittance are provided to the receiving bank. In some cases computerised entries use sophisticated codes which just cannot be deciphered."
"With a view to avoiding inconvenience to depositors, banks are advised to avoid such inscrutable entries in passbooks or statements of account and ensure that brief, intelligible particulars are invariably entered in passbooks or statements of account. Banks may also ensure that they adhere to the monthly periodicity prescribed by us while sending statement of accounts," the Committee had said.
It would be interesting to see if banks follow RBI’s advice this time or continue to ignore it, as they have been doing these past 13 years.
Here are the details of transactions banks will record and share with customers: