Banks cannot exist without customers. The banks’ operations are invested to serve customers and not vice versa. A customer looks for certain values like product, quality, reliability, superior service, state of the art technology, low cost, a premium image, etc.; while purchasing anything. In service sector like bank, customer service should not only a critical function, but a way of life also.
Banks can be said as being customer oriented if its various organisational activities like organizational restructuring, staffing, co-ordination are geared to fulfill customers’ needs. So, total customer satisfaction should be the focal point. That alone serves the banks’ objective of maximization of profit. It is obvious that a bank cannot think of making profit without customers.
Customer orientation comprises two factors-customers’ need analysis and banks’ effort to fulfill those needs up to the level of their satisfaction. At present customer satisfaction may be called a complicated mix of hardware (technology, product, price, quality) and software (attitude, responsiveness, deliverance and communications).
In fact customer satisfaction is currently changed into ‘Customer Delight’. The aim is to provide such services at Customer’s door step so that he gets delighted by the service and not merely satisfied of it. Look, how competition brings about sea-change in the attitude of bankers to customers.
ADVERTISEMENTS:
Customer belongs to two categories, the existing or present customer and new customer including potential customer, i.e., children and new class of entrepreneurs. Now banks have two jobs to perform
(i) Retaining the old customers, and
(ii) Attracting new customers.
But finding a new customer is costlier and time consuming business than retaining on old one. In spite of maintaining the old customer, attracting new customer for banks to increase its business. In the fast changing market scenario, old concepts have shattered and new concepts are taking their places. Now, a sale is viewed as the beginning rather than the end of a company’s interaction with the customer.
ADVERTISEMENTS:
The marketing takes off the moment customer declines a product. Because this is the time of SWOT (Strength, Weakness, Opportunity and Threat) analysis. A rejection by the customer provides for the idea to analyze the staff themselves and strengthen them to meet the customer challenges.
With the increase in variety and volume of business and growth of bank branches over the decades customer service has declined in many aspects; at the same time, customer expectations have gone up.
The working group on customer service was first headed by R.K. Talwar, the then Chairman of SBI. The study was pioneering survey on customer service by banks. It has made a number of recommendations to improve service by banks. Most of the recommendations of the working group have been implemented after approval by RBI. The RBI also set up another committee on Customer Service headed by Mr.Goiporia, the then Chairman of SBI. This Committee made important recommendations for improving customer’s service by the staff of banks.
The banks have also set-up committees, carried out surveys, etc. to continually assess the level of customer service in the banks and enhance its quality.
ADVERTISEMENTS:
The customer service is considerably enhanced by the quality and job knowledge of bank personnel. Inexperienced and ill-informed staff tends to postpone decision-making, and their decisions when taken, often turn out to be unsound.
They can be classified under the following categories:
(1) Deposit Accounts.
(2) Remittances.
ADVERTISEMENTS:
(3) Collections.
(4) Loans and Advances.
(5) Discipline and Attitudes.
(6) Complaints.
ADVERTISEMENTS:
Let us discuss these items one by one in detail
Deposit Accounts
(a) Introduction of Accounts:
All Deposit accounts should be properly introduced. Passport and postal identification cards are deemed to be adequate identification. In terms of RBI instructions every account holder is required to produce two passport size recent photographs to the bank for opening any type of account with a bank.
ADVERTISEMENTS:
Similarly, as per Income- Tax Regulations a depositor desirous of opening a Fixed Deposit Account in excess of Rs. 50,000, needs to furnish his/her Income-Tax Permanent Account Number (PAN).
(b) Transfer of Accounts:
The instruction of a customer for transfer of his deposit account from one branch to another should be carried out immediately on receipt of and in accordance with his instructions.
It should be ensured that along with the balance in the account, the relative papers, such as, the account opening form, specimen signature cards, standing instructions, stop payment instructions, etc. are also simultaneously transferred.
After affecting the transfer the customer should be informed of such transfer at his last and new address. On receipt of instructions of the transfer from the transferor branch, the account should be opened as per instructions of the transferor branch and this should be intimated to the customer.
(c) Pass Books/Statements of Accounts:
Pass Books and Statement of Accounts should be written accurately, neatly and legibly.
Statements of Accounts to Current Account Holders should be sent within 5 days from the due date. These due dates should be marked in the relative ledger folios and statements of accounts should be prepared sufficiently early to be sent to the customers on due dates. Entries in Pass Books should be done then and there and Pass Books should be returned to the customers without making them wait long.
(d) Standing Instructions:
Standing instructions refer to an authority given by the customer to the bank to debit his accounts periodically for certain specified purposes like payment of rent, telephone bills, electricity charges, etc.
– Standing Instructions are accepted on all types of Accounts.
– Standing Instructions should be carried out on the due dates without fail.
Whenever the Standing Instructions could not be carried out for any reason, the Account-holder should be intimated in time so that the least inconvenience and damage is caused to him.
Whenever any complaint is received of non-compliance of the instructions given by the customer in time and the consequential loss or damage to the customer, appropriate action will be initiated against the employees responsible of such lapse.
Customer Service
(e) Advices of Credits and Debits made to Accounts:
Credits and Debits made to the Accounts of customers including those on account of outstation cheques/bills realized should be intimated to the customers by Post / Local delivery on the date of debit / credit or latest by the next day.
Cheques and Bills returned unpaid should be dispatched along with the debit advices by the local delivery or by Registered Post on the Day on which the debit is made or latest by the next day.
The debit /credit advices and cheques/bills returned unpaid should not be detained at the branches in anticipation of the customers calling on the branch for collecting them.
(f) Timely Issue of Due Date Notices for Term Deposits:
Due Date Notices should be sent to all Term Deposit Account-holders, at least 15 days before the date of maturity of the Deposit. Due Date Notices need not be sent in cases where the Depositors have given specific instructions not to send such notices. Due Date Notices should not be handed over to neighbors of the depositors or any third party.
(g) Safe Custody of Deposit Receipts:
Customers may keep their Term Deposit Receipts in safe custody with the bank free of charge.
(h) Teller System:
Under this system Tellers will pay against cheques drawn on Savings Bank as well as Current Accounts up to certain amount. It is usually up to a maximum of Rs.5, 000 to Rs.10, 000 per payment in an account, per day.
In branches where the average payments handled by the Teller is less than 100 per day, Tellers will also accept cash receipts up to certain limit and hand over the relative counter foils to the customers after signing the challans.
(i) Cash Payment after Normal Banking Hours:
To meet the urgent requirements of customers, in exceptional circumstances, personal cheques for reasonable amounts presented by the drawer himself, may be paid even after the normal banking hours, but within the working hours.
(j) Any Branch Transactions:
Many banks are now providing deposits and withdrawals facility through any of the branches although the account is maintained in a particular branch. This type of operation is usually restricted in metropolitan cities. Few banks like Indian Overseas Bank have introduced this type of facility.
Remittances
(a) Issue of Demand Drafts:
Demand Drafts should be issued to any person who applies for it, irrespective of whether he has an account with the Bank or not. Banks will not accept more than Rs.20000 in cash for issue of drafts as per Income-Tax Regulations. The banks levy a charge for issue of every Demand Draft.
(b) Payment of Demand Drafts:
Payment of Demand Drafts should not be refused for the only reason that the relative remittance advice has not been received. If necessary, the paying branch should contact the issuing branch over telephone and seek confirmation of issue of the Demand Draft.
(c) Issue of Duplicate Demand Drafts:
On receipt of request for issue of a duplicate DD, the issuing branch should send a communication about the loss of the DD, to the drawer branch.
Immediately on receipt of such communication, the drawer branch should go through its records to ascertain whether the said DD has been paid or not, and should inform the position to the issuing branch, by return of post. If not paid, the drawer branch should note to exercise caution.
(d) Beneficiary’s Full Address in Telegraphic Transfers:
The address as well as the name of the beneficiary should be communicated in the TT message so that the receiving branch will be in a position to contact the beneficiary immediately on receipt of the message.
(e) Payment of Telegraphic Transfers under Reserve:
At the discretion of Branch Managers, Telegraphic Transfers may be credited under reserve, to the account of a beneficiary of standing, even if the message or check signal is mutilated in transit. Wherever warranted, a suitable general indemnity should be obtained from the beneficiaries of such Telegraphic Transfers.
(f) Payment of Interest on Delayed Credit of Mail Transfers:
The normal transit period for a Mail Transfer to be credited to the beneficiary’s account is 7 days (10 days for Mail Transfers to and from branches in the Northeastern Region and Sikkim).
In cases where the Mail Transfer advice reaches the destination branch after 7/10 days, as the case may be, branches should pay interest on the proceeds of the Mail Transfer, for the delayed period, at the rate of 2% over the Savings Bank rate, irrespective of whether the Mail Transfer is meant for Current / Savings Bank / Term Deposit / Borrowable Account and also whether the delay occurs in postal transit / due to misplacement, etc.
Collections
(a) Areas of Complaints
Some of the areas in the Collection business where complaints are received are:
(i) Inordinate delay in collection and credit of cheques, bill and other instruments.
(ii) Non-compliance of the instruction of drawers of bills, such as, collection of overdue interest; collection of ‘C’ form; returning of unpaid bills at stipulated time.
(iii) Delay in dispatch of realization advices by collecting branches and consequent delay in giving credit to the customers.
(iv) Delay in sending intimation of receipt of documents to the drawee of bills.
With a view to a avoiding such complaints, it should be ensured that,
1. Instructions in respect of the collection, including the date on which the bills is to be returned if unpaid, are given correctly, clearly and completely by the branch sending the bills / cheques;
2. The proceeds of the cheques /bills collected are dispatched on the day of realization;
3. Intimation of all bills is sent on the day they are received, and in case of local parties, the hand delivery;
4. Proper follow up measures are initiated whenever proceeds of the bills / cheques are not received in time;
5. The collecting branch / bank is contacted immediately through letter / telegram/ telephone when a report of loss of the instrument sent for collection is received, and there is no let up in the follow up;
6. Instructions of drawers of bill for collection of overdue interest, collection of ‘C’ form, etc. are carried out meticulously and unpaid bills are returned to the drawers as per their instructions.
(b) Service Branches
With a view to avoiding delays and to quickening the process of collection of outstation cheques, Service Branches may be set up in important places. Branches should send all the cheques / instruments drawn on these places to Service Branches only for collection.
Clerks will receive and sign in full the challans in respect of cheques /bills tendered for collection, at the counter itself and hand over the relevant counterfoils to the customers. This may relate to transfer / clearing challans up to Rs.1000.
(d) Immediate Credit of Outstation Cheques of Value up to Rs. 5000
Branches, including Extension Counters, will afford immediate credit of outstation cheques of value up to Rs. 5000 to properly introduced Savings Bank and Current / Overdraft accounts in the names of individuals, including joint accounts, provided there is no adverse experience in the past in the particular account. All such cheques deposited in eligible accounts, irrespective of whether or not the customers has made a request for immediate credit, should be purchased and credited to the accounts. The facility is not available for ‘self’ cheques.
The facility of immediate credit is afforded in respect of Dividend Warrants, interest Warrants, Refund Orders and Demand Drafts as well, if the customer so desires.
The Service Charges for immediate credit of cheques will be as applicable for collection of cheques plus charges applicable for Registered post.
On cheques which are afforded immediate credit but returned unpaid, interest at the stipulated rate will be charged from the date of return of the cheque to the date of reimbursement of the amount to the Bank.
(e) Withdrawal Against Salary Cheques of Value up to Rs. 5000
Branches will allow withdrawal against clearing, i.e., without waiting for advice of clearance, for local salary cheques of value up to Rs.5000, issued by Government Department, Quasi-Government Authorities and Public Sector Undertakings. A service charge of Rs.5 per cheque will be levied on this facility.
(f) Payment of Interest on Delayed Collection of Outstation Cheques
Branches will pay interest at 2% over the Savings Bank rate on the amounts of outstation cheques / instruments sent for collection, if the proceeds are not realized / credited to the customers’ account, or the unpaid instruments are not returned to the customers, within the periods specified below:
a) Cheques / instruments lodged with Branches in State Capitals and payable in other State Capitals
(Except Northeastern States and -10 days Sikkim)
b) Cheques / instruments lodged with branches in other places and drawn on banks / branches in other places. -14 days
Where the proceeds of collection instruments are credited to cash credit, overdraft or loan accounts, and the interest payable will be at the minimum lending rate stipulated by the Reserve Bank of India from time to time.
No interest will be paid on instruments lost in transit.
Branches should pay interest on delayed collections, as a matter of routine at the time of crediting the customers’ accounts with the proceeds of the cheques / instruments realized. The period of delay has to be arrived at taking into account the date of lodgments of the cheque /instrument by the customer and not from the date of entry in the Bills Register.
In cases where the delay has been at the collecting Bank’s side, branches should pay interest to the customer for the period of delay and lodge a claim with the collecting bank for reimbursement.
Loans and Advances
Common Guidelines for Priority Sector Advances
(i) Applications Forms:
In areas covered by special schemes like the Integrated Rural Development Programme, the concerned Project Authorities Rural Development Agencies and District Industries Centres, will identify the borrowers and forward to the Bank applications received for loans. In other areas, the Bank staff will help the applicants filling in the application forms.
The Branch Manager should have a dialogue with the applicant for the loan and during the course of the conversation should try to get as much information as is necessary for the purpose of processing the application.
(b) Repayment Schedule:
Repayment installments should be fixed invariably not in relation to the size of the loan or on the basis of willingness of the applicant, but strictly in relation to the applicant’s paying capacity realistically assessed by the bank. The Repayment Programme should take into account the sustenance requirements, surplus generating capacity, the break-even point, the life of the asset, etc., and should not be fixed in an ad manner.
(c) Disposal of Applications:
All loan applications under the Integrated Rural Development Programme and other Programme for the weaker sections of society should be disposed within 15 days from the date of receipt. Loan applications under other Schemes up to the limit of Rs.25, 000 should be disposed within eight to nine weeks.
Whenever any loan application is rejected, reasons for the rejection should be advised to the applicant.
Discipline and Attitudes
(a) Staff Members of all Categories will ensure that
1. They are at their respective desks sufficiently in advances to begin work exactly at the commencement of the working hours;
2. They devote entirely to the Bank’s work during working hours;
They are at their desks during working hours except when they go out on Bank work.
(b) Staff Meetings:
To review the level of customer’s satisfaction at the branch and to have a frank and free exchange of views on the working of the branch, each branch should hold a staff Meeting at least once a month, participated by all members of staff.
(c) ‘MAY I HELP YOU’ Counters:
‘May I Help You’ counters should be set up in all branches excepting those categorized as ‘small’, to guide the customers.
(d) Norms for important services in normal circumstances:
The following norms have been evolved stipulating the maximum time required for each transaction in normal circumstances. These norms should not be taken as a rule, but every effort should be made to complete each transaction well ahead of the stipulated time schedule.
(i) Cash Receipt – S.B., C.A/C
(ii) Cash payment- S.B.,C.A/C
(iii) Issue of cheque Book
(iv) Payment of Draft
(v) Issue of Demand Draft
(vi) Opening of S.B.A/C
(vii) Other Norms:
(viii) Collection of cheques
e. Display of Information Posters on Customers Service Information Posters on,
(a) Nomination;
(b) Immediate credit of outstation of value up to Rs. 5000;
(c) Immediate credit of local cheques of value up to Rs. 5000;
(d) Payment of interest on delayed collections; and
(e) Customers Grievances Redressed Cell at the respective Regional / Zonal Office, with the name and address of the Regional / Zonal Manager, and also the address of the Customers Service Cell at Central Office, should be displayed prominently at all the branches.
(f) Awards to Branches for Exemplary Customer Service:
With a view to recognise branches with exemplary customer service, Cash Awards as well as Merit Certificate are presented every year, to the best, second best and third best branches in each Region, and to branches coming under the direct control of the Zonal Office.
Complaints
(a) Complaints / Suggestions of Customers:
A complaint / Suggestion Box is to be provided at a prominent place in each branch. Near the box, blank slips serially numbered should be made available which should also provide for the name and address of the customers and details of complaint or suggestion. Complaints received through the Customer Service Centres also must be attended too quickly.
Reply to any complaint received from customers should be sent within 7 days from the date of receipt. In cases where reply could not be sent within such time, an interim acknowledgement stating the reason for the delay as well as the probable time when a suitable reply may be expected, should be sent.
(b) Customers Service Committees:
Each branch should set up a Joint Customer Service Committee comprising the Branch Manager and representatives of Officers and Award Staff. The Committee should meet at least once a month to study the complaints / suggestions; causes of delay and other difficulties of members; and evolve ways and means of improving customer service.
The Committee should also examine the complaints / suggestions received by the Branch during the month and discuss the action taken / to be taken. At periodic intervals, select customers from a section of the clientele of the branch should also be invited to participate in the meeting.
Other Services
(a) Nomination Facility:
All banks have been directed by RBI to provide nomination facilities in respect of personal accounts like SB Accounts. This facility should be incorporated in the opening form itself. This facility should be extended even without asking for, by the customer.
In the unfortunate event of death of the customer, the bank will be obliged to pay the outstanding balance in the account by the nominee of the account holder. This quickens the pace of settlement of funds after the death of the account holder without involving any hassles. The nomination facility is also available for deposits made with registered NBFCs.
(b) Exchange of Soiled Notes/Torn Notes:
Many times we come across badly soiled currency notes or torn notes. What shall we do with these currency notes? As per RBI instructions all branches of public sector banks must accept soiled notes and torn notes (not exceeding two pieces and subject to certain other conditions) for exchange against good currency notes without any charges.
The RBI from time to time issues advertisement in this regard for the knowledge of public. These notes can also be given along with good notes while depositing money into the accounts. It should, however, be made clear that a soiled or torn note should not be a forged note.
(c) Mutilated Currency Notes:
Supposing we happened to have mutilated currency notes with more than two pieces or the note is cut through a number panel on the currency note. Can we get value against such currency notes? Yes, it is possible to get value meaning good notes against such mutilated notes. The RBI has prepared guidelines known as “RBI Note Refund Rules” for paying value against mutilated notes.
Public sector and Private sector bank branches having currency chests have been directed to accept the mutilated notes and give good notes in exchange subject to fulfillment of certain conditions. We must remember that mutilated notes should properly be pasted on the back side with a special brown paper and submitted to the bank. If a bank does not accept such notes one can write to the RBI.