Reserve Bank of India (RBI) deputy governor KC Chakrabarty has said that the efficacy of the mechanism for redressing customer grievance in Indian banks is far from satisfactory, despite having undertaken a number of initiatives for ensuring fair treatment to customers.
?It is necessary to further develop a credible and effective functional system of attending to customer complaints by strengthening banks? internal structures to attend not only to the basic customer needs, but (also) the special needs of disadvantaged groups, such as pensioners and small borrowers, including farmers,” he said at the Annual Conference of the International Network of Financial Services Ombudsman Schemes ? INFO 2011 at Vancouver, Canada on Tuesday.
Moreover the challenge of financial education, in a multi-lingual and multi-ethnic country like India, poses many operational difficulties, given the low levels of financial literacy and a population of 30% which is uneducated, he added.
?We are trying to tide over this situation by adopting multi-disciplinary and multi-channel strategies. Taking into account these considerations, a committee was constituted by the RBI,” he said.
The committee was to look into the banking services rendered to retail and small customers and pensioners, structure and efficacy of the existing grievance redress mechanism, the functioning of Banking Ombudsman Scheme, possibility of leveraging technology for better customer service in the light of increasing use of Internet and IT for bank products and services, etc. and to recommend steps for improvements.
Chakrabarty further said the lessons that the global financial crisis have been expensive and painful.
?Let us not blindly believe in the ability of the markets and competition to take care of all segments of the population,? he said.
?There are sections of financial consumers who always have the highest sense of protection and there are the vulnerable sections of the society who feel left out. We have to move to an order where the market forces, competition, effective regulation and a vibrant Ombudsman scheme all co-exist and handle matters concerning financial consumers? protection in a harmonised way,? said Chakrabarty.
