First, the committee recommended that the RBI withdraw from the day treasury bills market and that interbank call money and term money markets be restricted to banks and primary dealers. Naik, Business Line, the Goiporiaa. Major Committees R. Jilani Committee and Goiporia Committee Download PDF This complaint book will be used only when the customer calls personally at the branch to lodge a complaint.
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Other Aspects 2. Bundling of products - Product proliferation and an emphasis on incremental growth in fee-based income have prompted many banks to develop and market a bundle of products as one package, not necessarily in a homogenous way. The pricing of products and services in a bundling approach may not necessarily serve the best interest of the customers who need only basic banking services.
This may not make the customers confident about them being treated fairly. The customers in general had expressed a desire to pay only for the product they use, would prefer plain vanilla products and are distinctly unhappy paying for an entire bundle, most of which, they feel they would never use.
Only some banks had implemented the process of sending digitally signed e-mail statements to the customers. Some customers had also complained that the passbook printing was not appropriate as the contents were not readable with inappropriate font size and undefined acronyms used. Instead of recording separately gross interest credited and TDS debited thereon, some banks record only one figure of net interest credited.
Inoperative Accounts - Interactions with customers revealed that the customers have to face a lot of difficulties due to accounts being frozen by banks unilaterally as inoperative without prior intimation or attempts to contact the account holder.
The extant guidelines of RBI in this regard are quite clear and banks need to ensure strict compliance to these. Before marking the account as inoperative, banks must intimate the account holder by SMS and send a mail. If the account holder is not traceable, banks must make efforts to trace the whereabouts of the account holder or his nominees in case the account holder is deceased. Minimum Balance - The Committee came across many complaints about penal charges deducted without intimation by banks for non-maintenance of minimum balance in the account.
Further, the penal charges levied were not in proportion to the shortfall observed. The same had made it necessary that the general public have an access to a basic savings bank account.
Further, the Committee felt that the same has impacted the customers from both the sides as the Government had made account opening mandatory in some of the payments. The Committee is of the opinion that every bank should offer a basic savings bank account with certain basic privileges like limited number of withdrawal transactions inclusive of cheque book facility, ATM Card, interest at savings bank rate etc.
This would be treated like a regular account with full KYC and the bank should clearly indicate in advance the transaction charge for each type of transaction which is made beyond the permissible limited number of such transactions. Banks may then progressively prescribe higher Average Quarterly Balance AQB slabs with offer of increasing number of privileges and facilities beyond the basic previleges for a No Frills Account.
In short, every bank should offer a basic account which permits a minimum number of transactions without penalty for non-maintenance of a minimum balance. Such a penalty is seen by a number of customers as a very broad punishment imposed by a bank. A customer would then have a choice of maintaining a higher balance or paying transaction charges, if the number of transactions exceeds the permissible level.
Uniform Account Opening Forms - Customer relocation is a situation very common these days and this necessitates opening of accounts with multiple banks at different locations. The procedure followed by the banks and the formats for opening of accounts differ from bank to bank.
Customers also felt the need for common KYC documentation that would serve them across banks. The poorer sections of people, migrants etc. This account may be upgraded to a basic account if the customer fulfills KYC requirements. The Committee felt that without timely prior intimation of discontinuance of the existing Scheme, the customer cannot be denied interest in such cases.
Term Deposits - A perusal of maturities offered by the various banks revealed a confusing trend with some banks offering deposits for maturities of , , and various numbers of days, making it difficult for the customers to compare rationally the actual rates of interest offered and also understand the logic of such offerings. As financial product offerings are based on cost of funds, asset and liability management, risk etc.
And, the customers should have the confidence created by a close regulatory oversight on such issues. All deposit rates should indicate the annualised rate of the offering, preferably in a summary box and also indicating penalty for premature withdrawal, so that the customers understand the product and can easily compare the same with similar such offerings by other banks.
Further, the term deposits are normally made for a long period and it would be possible that the customer would have relocated in the interim, before the maturity of the deposit and would not have updated the address in the account. Banks had the practice of sending physical renewal notices to the customers before maturity and it might be possible that such notices may not reach the customers.
Further, in no case, the automatic renewal of term deposit should take place without prior written consent of the customers. As a result, the Committee had observed there was not only no uniformity but also wide unjustifiable disparity in these charges across the banks.
Under these circumstances, the Committee was of the view that the regulation had not achieved its purpose and pricing of these basic banking services, especially for lower category of customers, had not been addressed.
Charges on Non-Home Branch Transactions - The Committee has observed a general discontent among all the strata of customers about charges levied by banks for getting certain services at non-home branches like pass-book updation, cash deposits etc.
Customers feel that under CBS environment, these charges are not justified. Ledger Folio Charges - It was a normal practice in a ledger based environment to charge ledger folio charges as manual work was involved in transcribing information from one ledger folio to another. It is common knowledge that in CBS environment, ledgers and their folios are not present and hence, the customers find levy of this charge in a CBS environment as illogical.
TDS Certificates - The customer complaints also revealed that the certificates issued towards tax deducted at source were not complete in all respects.
Committee was of the opinion that all the above information should be provided by banks and in case of denial of credit of TDS by Income Tax Authorities to customer due to deficiency on the part of the bank to provide information, the customer should be adequately compensated by bank.
The Committee is of the view that subject to systemic consent by Income Tax Authorities, a single Form 15 H linked to a customer ID should serve the requirement of Income Tax Authorities for all the deposits maintained by a customer in a bank during a particular financial year instead of taking a separate form for each deposit.
Small Remittances - Students in particular are required to make frequent payments of small amounts related to fees for various competitive examinations or their college fees and all such fees are generally made through Demand Drafts DD. Students who do not have bank accounts face difficulty in obtaining drafts for these purposes. The same applies to any customer who do not have a bank account.
Further, the customer has to pay heavy DD charges for a DD of a very small amount, which the Committee felt as not fair on the part of the banks. It was also observed that all the public institutions coming within the purview of RTI do not collect the required fees online and the same applies to the educational institutions as well as various bodies conducting competitive examinations.
The Committee feels that the same would be an impediment since the customers are made to travel long distances for want of documents and also only very select branches issue the travel visa. Penalty for Returned Cheque - Customers have expressed reservations about the logic of penalty for returned cheques presented in the clearing. While there is a broad based consensus on the need for reasonable penalty on the drawee, payable to both the presenting and the issuing banks, the presenting party should be exempt from penalties.
The customers felt that such a practice impacts them from both the sides as the cheques had already been returned unpaid. There is a clear demand for providing automated receipt so that disputes can be addressed.
Time Schedule for disposing of Loan Application: The Committee came across complaints about undue long time taken by banks in disposing of loan applications. Banks should inform upfront the time schedule for disposal of loan applications to the borrower and take responsibility for not disposing of the loan application within that time-limit.
The customers opined that supervision has not effectively complemented regulation to ensure compliance with guidelines on issues which have been deregulated. The Committee reviewed the various guidelines including those on risk management systems in banks, guidance note on credit risk management, guidelines on reasonableness of bank charges etc.
The risk rating system should be a critical input for setting pricing and non-pricing terms of loans and where the risk for any class of customers is the same, the interest rates for fixed rate loans should not vary at the same point of time and for floating rate loans vary differently for different sets of customers at different points of time.
Regulation should ensure that customers clearly understand the pricing policies of banks, as the Committee in its interactions all over the country has seen that variances in these issues give rise to customer dissatisfaction. The Committee observed that this is a very serious issue having implication on the credit rating of the borrower.
Further, customers also complained that the banks should ensure that any representation from the customer in this matter is processed expeditiously. Customers stated that as inaccurate credit information reports are vitiating loan sanctions, it would be appropriate for that aspect to be checked first and any adverse remark be informed to the customer for necessary clarification upfront itself so that errors, if any, can be corrected.
Rules of the Credit Bureau should clearly differentiate settlements done at a huge loss to the bank, from the routine settlements, where customers dispute on fees, commissions etc. Home Loan issues - Foreclosure charges levied by banks on prepayment of home loans are resented upon by home loan borrowers across the board.
Banks are also found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario. As such, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source. This is especially so when some banks are offering lower interest rate benefit to new customers, also the floating rate is anchored to an internal rate.
Across the country, bank home loan customers who have floating interest rate loans have expressed unhappiness over the discrimination in interest rates offered to the new customers. Several complaints have also been received by the Banking Ombudsman offices. The Banking Ombudsmen have given awards directing the banks to give benefit of lower interest rates to existing customers of such loans. The issue has been discussed with the various stakeholders, but the Committee sees merit in the feeling of the customers that the point of entry should not matter when retail loans are taken on a floating rate basis and when the entire class of customers for a particular loan are of the same characteristic and are treated at the same risk level.
Regulation is also silent on issues such as teaser rate loans, festival loans and several such promotion schemes. The existing customers of banks who are disadvantaged have questioned the logical basis for giving such concessions to a few new customers and how banking risk becomes more favourable suddenly for such class of customers etc.
The Committee feels that regulation should plug such anomalies which create doubts about fairness regarding pricing which should be transparent, non-discriminatory and also objective. The Committee feels that there should be explicit regulatory prescriptions and a closer regulatory oversight of such actions by banks which raise customer issues clogging the grievance redressal mechanisms. Several cases have been brought to the notice of the Committee where the title deeds of the loan property are not returned immediately after the loan is repaid.
Further, there have been cases of loss of title deeds resulting in creation of duplicate title deeds which is a form of permanent defect in title to property. This particular improvisation seems to be working satisfactorily but consumers still have a lot of grievances in this area.
It may be prudent for every bank to ask the question if this situation was mainly of their own making or otherwise, since they were focusing excessively on achievement of quantitative targets rather than rendering quality service to select customers after having carried out the process of due diligence. The short point of this argument is that there cannot be short cuts in the matter of selection of a customer and achieving the appropriateness of the sale.
The banks must, therefore, develop MITCs for all the important products and services focusing on the items that are of critical importance to the consumers. Educational Loans - International experience in this regard especially in USA and other western countries shows that educational loans are extended by Government or Government bodies. In India, the renewed push given to the educational loan disbursement by banks has benefitted innumerable students to pursue higher studies.
This has raised the expectation level among the students and many have expressed that such a loan should come as a matter of right. The Committee received feedback that though the banks state that they are liberal with the educational loan facility the same has become very difficult as the banks have made the norms very stringent for obtaining such loans. In the meetings, students have expressed a desire that there should be a non-discriminatory and transparent policy for giving educational loans.
Students should have the information about eligibility on the website and also by way of advertisements, so that ineligible students do not waste time, effort and money in seeking loans from banks. Feedback from rural students indicated that preference for high-end professional studies was not benefitting the average student from a rural area to get a loan to pursue higher studies. Customers desired that the bank should explain the benefits or otherwise of switching over to Base Rate so that an informed decision can be taken by them.
Reserve Bank of India has issued guidelines advising banks to allow switch over to Base Rate if desired by the borrower without charging any fee on mutually agreed terms. Banks may bring this Circular to the notice of all the borrowers and explain to them the benefits of switching over to the Base Rate. Visits to rural branches have shown that pensioners sometimes have to go back and come again from faraway places.
A few suggestions given by the customers are: Provision of SMS alert service about balance in the account at periodic intervals and about due dates for submission of important documents. Facility of accepting life certificate from pensioners at any branch of a bank and maintain it in a centralised database.
Automatic updation of the customer to the senior citizen category based on date of birth. Issues of Pensioners - Pensioners also complained that while sanctioning personal loans, different banks are taking different longevity of the life of a pensioner for calculating the loan amount.
Pensioners felt that there should be uniformity among the banks as to the age of consideration of the longevity for calculating loan amount for the pensioner.
It may not always be possible for a pensioner to submit the annual life certificate at the home branch.
GOIPORIA COMMITTEE REPORT PDF
Other Aspects 2. Bundling of products - Product proliferation and an emphasis on incremental growth in fee-based income have prompted many banks to develop and market a bundle of products as one package, not necessarily in a homogenous way. The pricing of products and services in a bundling approach may not necessarily serve the best interest of the customers who need only basic banking services. This may not make the customers confident about them being treated fairly. The customers in general had expressed a desire to pay only for the product they use, would prefer plain vanilla products and are distinctly unhappy paying for an entire bundle, most of which, they feel they would never use. Only some banks had implemented the process of sending digitally signed e-mail statements to the customers. Some customers had also complained that the passbook printing was not appropriate as the contents were not readable with inappropriate font size and undefined acronyms used.
Major Committees 2016: R. Jilani Committee and Goiporia Committee (Download PDF)
Each set of complaint forms is in triplicate. Major Committees R. Jilani Committee and Goiporia Committee Download PDF Staff at the counters may undertake the following transactions during the extended business hours branches to indicate the timings. According to some, the committees failed to recommend measures for faster alleviation of poverty in India by generating new employment. The employees expected to be at their seats at the commencement of the business rrport and attend to all goiporria customers who are in the branch prior to the close of business hours. Non-performing assets had been the single largest cause of irritation of the banking sector of India.