The RBI has released a charter of customer rights that lays down five basic rights that bank customers enjoy. Though a framework laying down service standards already exists, industry-watchers feel a direct intervention from the RBI could make the process more robust. "This will also simplify the process for laypersons. Customers can flash this charter and demand that the rights be met," says certified financial planner Harshvardhan Roongta, CEO, Roongta Securities. 

The central bank has also advised the Indian Banks Association (IBA) and the Banking Codes and Standards Board of India (BCSBI) to formulate a 'Model Customer Rights Policy' based on the charter's principles. In case a bank violates any of the rights as laid down by RBI, customers can approach the customer services division of the apex bank. "With this charter, the RBI will have legislative powers to act against errant banks," says a retired head of a large public sector bank. Here are the rights of customers as notified by the RBI. 

Right to Fair Treatment 

This right prohibits banks from discriminating on grounds of gender, age, religion, caste and physical ability while offering products and services. Banks can continue to offer differential rates of interest or products to customers. "The financial services provider may, however, have certain special products which are designed for members of a target market group or may defensible, commercially acceptable economic rationale for discriminating between customers," the central bank had clarified. 

Right to Fair & Honest Dealing 

You can expect documents and language used to be simplified and more transparent. The charter requires banks to ensure that all contracts are transparent and easily understood by the common person. The onus of sending out effective communication in a simple language will rest with banks. Also, information on the product's price, customer's responsibilities and, most importantly, key risks will have to be disclosed upfront. The charter, through this right, will also protect you against unfair business practices and harassment. 

Right to Suitability 

Despite several regulations, complaints related to mis-selling continue to plague the distribution space, particularly in case of life insurance-cum-investment policies. Lured by higher commissions, sales officials tend to push products without ascertaining their suitability for the customer. With this charter coming into force, such officials might find it difficult to palm off, say, market-linked insurance products to senior citizens who are looking for stable returns. 

Right to Privacy 

Banksare duty-bound to keep customers' personal information confidential, unless the disclosure is required by law or customers have given their consent. "Customers have the right to protection from all kinds of communications, electronic or otherwise, which infringe upon their privacy," the charter states. Banks cannot pass on your details to telemarketing companies or for cross-selling. "There have been instances where bank officials, on the basis of transaction details, have asked customers to route their investments through them. This is not ethical," says Roongta. 

Right to Redressal & Compensation 

The right to grievance redressal will come to your aid if your bank fails to adhere to basic norms. The charter makes banks accountable for their own products as well as those of third parties. They will no longer be able to wash their hands off the responsibility once the product is sold. 

As per the charter, banks will also have to communicate the policy for compensating mistakes on their part, lapses in conduct and non-performance or delays in performance. The redressal and compensation policy will have to clearly state the rights and duties of the customer when such events occur. (Economic Times)