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)?

Answer:

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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