ENS Economic Bureau : New Delhi, Sat May 04 2013, 02:42 hrs | Indian Express |
The Reserve Bank has asked banks to stop differentiating between home-branch and non-home branch for customers, and ensure rates of interest for auto and home loans must not vary between customers without a clear reason.
RBI told banks that variation in pricing for services makes no sense when all of them are connected by a common network. But it has also put riders on gold loans, prohibiting advances against more than 50-gram coins from now.
The set of customer-friendly measures also include a promise to expand non-bank ATMs in rural and semi-urban areas.
Bank customers should be treated “fairly and reasonably”, the RBI has noted, without any discrimination. It has also rapped banks for the observed wide variations in the rate of interest charged to retail borrowers even when such loan is sanctioned on the same day.
“The very wide variation in rates of interest charged by banks on retail loans to different borrowers on the same day cannot possibly be attributed to customers’ risk profiles,” it said, asking banks to take remedial action. Lenders should have management oversight on such practices and should also frame policies to ensure that retail loan pricing is “transparent, realistic, and related to the risk perception of the borrowers,” the RBI said.
Reserve Bank of India Governor D Subbarao has also asked the Indian Banks Association (IBA) to work out a plan to implement the M Damodaran committee recommendations made to improve customer services in banks.
The recommendations include benchmarking of service charges for basic banking services, zero liability for ATM/point-of-sale/internet banking transactions and doing away with differential interest rates for new and old customers. It may be noted that the Damodaran panel report had in August 2011 made as many as 101 recommendations to improve customer service at banks and the regulator has already implemented a score of them. With agencies