What is the role of Banking Codes and Standards Board of India (BCSBI)?

May 20, 2019




What is the role of Banking Codes and Standards Board of India (BCSBI)?


About Banking Codes and Standards Board of India (BCSBI):

  • Reserve Bank of India (RBI) in November 2003, constituted the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S.S.Tarapore (former Deputy Governor).
  • It aimed to address the issues relating to availability of adequate banking services to the common person.
  • It is an independent banking industry watchdog that protects consumers of banking services in India.
  • The Committee was mandated to included identification of factors that inhibited the attainment of best customer services and suggesting steps to improve the quality of banking services to individual customers.
  • Committee concluded that there was an institutional gap for measuring the performance of banks against a bench mark reflecting the best practices (Code and Standards).
  • Therefore, the Committee recommended setting up of the Banking Codes and Standards Board of India (BCSBI).
  • BCSBI was set up to ensure that the common person as a consumer of financial services from the banking Industry is in no way at a disadvantageous position and really gets what he/she has been promised.
  • BCSBI was registered as a society under the Societies Registration Act, 1860 in February 2006.
  • It functions as an independent and autonomous
  • Membership of BCSBI is voluntary and open to scheduled banks.
  • Initially the membership of BCSBI was open to scheduled commercial banks and has now been extended to include Regional Rural Banks and select Urban Co-operative Banks.

Objectives of BCSBI:

  • To plan, evolve, prepare, develop, promote and publish comprehensive Codes and Standards for banks, for providing for fair treatment to their customers.
  • To function as an independent and autonomous body to monitor,
  • To ensure that the Codes and Standards adopted by banks are adhered to, in letter and spirit, while delivering services to their customers.
  • To conduct and undertake research of Codes and Standards currently in use around the world.
  • To enter into covenants with banks on observance of codes and standards and to train employees of such banks about the Codes.
  • To help people affected by natural calamities.

BCSBI codes:

  • BCSBI has in collaboration with the Indian Banks’ Association (IBA), evolved two codes:
    • Code of Bank’s Commitment to Customers and
    • Code of Bank’s Commitment to Micro and Small Enterprises.
  • These codes set minimum standards of banking practices for member banks to follow when they are dealing with individual customers and micro and small enterprises.
  • These Codes are subject to periodical review and revision.
  • The central objective of these Codes is:
    • promoting good banking practices, setting minimum standards, increasing transparency, achieving higher operating standards and above all, promoting a cordial banker-customer relationship which would foster confidence of the common man in the banking system.

BCSBI Functions:

  • Undertakes campaigns and initiatives to spread awareness of the Codes amongst customers and banks
  • Provides faculty support to training establishments of banks
  • Participates in on-location workshops held by / for member banks to increase coverage
  • associates with customer awareness programmes conducted by Banking Ombudsmen
  • provides credit counselling services in Mumbai
  • publishes quarterly newsletter entitled ‘Customer Matters’, containing matters of interest to customers
  • It is not a forum for redressal of individual grievances, but it examines each compliant to identify any systemic issue that may exist and takes up the matter with the respective bank.
  • Thus, it ensures that systems and procedures are suitably amended so that such complaints do not recur.

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