There is some good news for bank customers. It may soon be time to bid goodbye to bad memories of being penalised for non-maintenance of the minimum balance, being charged for shifting home loans, or having struggled to recover money after failed ATM transactions.
A high-profile committee on customer services by banks has suggested sweeping changes in banking practices. The report of the committee headed by former Securities and Exchange Board of India (Sebi) chairman M Damodaran has been submitted to the Reserve Bank of India (RBI). It has also been posted on the central bank's website to seek public feedback by August 27.
The committee has suggested a toll-free common call centre number for all banks, which a customer could call and then be diverted to the bank concerned.
On the deposits side, the panel, which emphasised that bank customers be treated fairly, said all banks should offer plain vanilla savings accounts with certain privileges like cheque facility, ATM card, etc without prescribing a minimum balance.
The committee observed that banks offered bundled products not priced in a way that served the customer's best interests. "It's like selling a single flower, or a bunch of flowers or maybe a bouquet at the same price, irrespective of the customer's needs," the report said, while commenting that most often customers never used all the products.
If the balance in the account fell short of the minimum requirement, the penal charges levied should be in proportion to the shortfall, the report said, adding banks must immediately inform the customer.
In addition, all fixed deposit schemes offering different rates for different tenures should indicate the annualised yields so that the customer could take an informed decision.
It has also been suggested that banks not auto-renew deposit accounts without written customer consent. Insurance cover for deposits has been suggested to be raised to Rs 500,000 from Rs 100,000 now.
