RBI forms panel to put in place a system for grievance redressal 

Committee Will Also Set Maximum Time Limits For Settling Complaints 

Customer can look forward to a fair treatment from banks with RBI forming a committee to put in place a system for quick grievance redressal. Besides reviewing customer grievance redressal and setting maximum time limits for settling complaints, the central bank wants the panel to propose ways of leveraging technology for better customer service in light of increasing use of Internet and IT for bank products and services. The panel will also recommend measures to enhance consumer protection.

The committee will also examine the functioning of banking ombudsman Scheme its structure, legal framework and recommend steps to make it more effective and responsive. It will also suggest ways to make the bank boards more involved in customer service. In a statement issued here on Thursday, RBI said it has constituted a committee under the chairmanship of former Sebi chairman M Damodaran to look into banking services rendered to retail and small customers, including pensioners. The committee will also look into the system of grievance redress mechanism prevalent in banks, its structure and efficacy and suggest measures for expeditious resolution of complaints, the statement said.

Besides setting up a separate customer services department within the central bank (in addition to the office of Banking Ombudsman ),RBI has also set up a separate Banking Codes and Standard Board, directing banks to adopt fair practices in customer services. But despite all these measures, customer complaints are on the rise. In FY09,the Bank Ombudsman received 69,117 complaints in FY09,up 44% over previous year. Of this,9,433 complains are still pending. The six-member committee under the chairmanship of Mr Damodaran, with representatives from both the consumer forums as well as the banking industry, will review the existing system of attending to customer service in banks approach, attitude and fair treatment to customers from retail, small and pensioners segment.

The committee will also evaluate the structure and efficacy of existing systems and recommend measures for expeditious resolution of complaints. Besides, it may also lay down a suitable timeframe for disposal of complaints, including last escalation point within that timeframe.

RBI proposes mode for effective loan screening 

RBI, in its draft guidelines for securitised transactions by NBFCs, placed on its website, has asked the originators or issuers of securitised products to retain a portion of each securitised pool. Such a practice, according to the central bank, is a mechanism to improve align incentives and ensure more effective screening of loans. In addition, it has also said NBFCs retain loans for a minimum period prior to securitisation and is also considered desirable to give comfort to investors regarding the due diligence exercised by the originator or the issuer of securitised paper.

Economic Times, New Delhi, 04-06-2010