Kanungo Committee Has Practical Suggestions for Bank Customers. Let’s Ensure They Are Enforced https://www.youtube.com/watch?v=t1-ypAxQGZY
Moneylife Jun 15, 2023
The customer services committee headed by former deputy governor of the Reserve Bank of India (RBI), BP Kanungo, has come up with a crisp set of recommendations that have addressed all the important pain points faced by consumers in dealing with banks and other regulated entities (REs) of RBI. Watch this week’s video as Sucheta Dalal talks about the suggestions made by the Kanungo committee and what you can do to ensure the recommendations are implemented.
https://www.moneylife.in/article/kanungo-committee-has-practical-suggestions-for-bank-customers-it-is-up-to-us-to-ensure-they-are-enforced/71091.html A big revelation of the committee is its categorical assertion that regulation does not allow the freezing of customer accounts and dishonouring of cheques for want of know-your-customer (KYC) updation (para 4.4.2). This is a startling revelation, especially since banks have been freezing accounts with impunity and have gone unpunished for years, even when banks have repeatedly failed to inform customers about the need to update KYC.
there is no punitive action or disincentive to bad service and sloppy grievance redress. The committee has three suggestions to deal with this: 1) incentives and disincentives; 2) empowering the banking ombudsman and RBI’s customer services department to take a ‘class action’ approach when there are a set of similar complaints and direct review and corrective action; and 3) compensation of IOs to be independent and paid through and independent mechanism, in response to complaints that IOs often rule in favour of banks.
We had pointed out that technology allows traceability of action, including tracking communication with customers. The committee has said that recourse to technology ‘should be a two-way process’ and insistence of physical visits should be ‘avoided’. Unless RBI takes steps to ensure this is followed, it will only be ignored. The same goes for ‘miss-selling’ of third-party products, continued harassment of senior citizens for life certificates and the need for doorstep services. Without specific rules that make it mandatory for banks to adopt better behaviour, it is safe to predict that the attitude to consumers will not improve.