MUST KNOW: 10 important rights of a bank customer

The Banking Codes and Standards Board of India, BCSBI, has stipulated customer rights, which public and private banks have committed to provide to their customers. These 10 are the most important rights every bank customer ought to know.

The Banking Codes and Standards Board of India, BCSBI, was established, as an independent organisation in the year 2006 by Reserve Bank of India for the purpose of providing protection to individual customers and micro & small enterprise (MSEs) customers of banks.

All the scheduled commercial banks, as also, some of the urban cooperative banks and regional rural banks are members of the BCSBI. There are at present 128 member banks of BCSBI.

In order to ensure that member banks provide transparent and fair customer service, BCSBI has come out with two Codes, a) Code of Bank’s Commitment to Customers and b) Code of Bank’s Commitment to MSEs (medium and small enterprises), in the year 2006 and 2008 respectively.

These Codes stipulate customer rights, which member banks have committed to provide to their customers.

Both the Codes are reviewed and revised by BCSBI periodically. Currently, Code of Bank’s Commitment to Customers (2014) and Code of Bank’s Commitment to MSEs (2012) are being followed by the member banks.

Here are 10 rights that customers should be aware of, as provisioned by the BCSBI Code and stipulated by the RBI.

1. No bank can refuse to open an account for you if you are an Indian citizen, who lives somewhere in India, only lacking proof of permanent address. This is called simplified KYC norms. This account may have some limitations.

2. Any walk-in customer in any bank, even without an account in that bank, can send a remittance of up to 50000 by NEFT (National Electronic Fund Transfer).

3. Every account that is designated as a BBA (basic banking account) does not need a minimum balance. This is regardless of whether you are a PSU bank or a private sector bank. However, value added services may not be provided for this account by the bank.

4. The bank has to inform you, through a 30 day notice, of any change in the terms and conditions of your agreement with the bank.

5. The customer has a right to get compensated for late collection of cheques, beyond the period specified by the bank, at a simple rate of interest.

6. The customer should get back any security, against which liability is fully cleared, within 15 days of clearing such a liability.

7. The bank must not force you to buy third party products: For example: a mutual fund or an insurance policy.

8. The bank cannot offer you a product with changed qualities suo moto (on their own accord).

9. No unauthorised debit can be forced on you. The onus of proving the debit lies with the bank. This can be of immense help to customers in case there is a fraud on your bank account.

10. Whatever facility the bank refuses to you, the customer has the right to know the reasons for refusal.

"Though banks have adopted Codes long back, their system for implementation of Codes needs further strengthening and improvement. The key problem in implementation is lack of awareness of Codes among bank officials," Mahajan told Rediff.com.

"Codes are available on banks' website, and are to be made available at bank branches for perusal by customers. However, at many bank branches, the bank officials are not aware of their bank's commitments, as envisaged in Codes, in regard to banking services," he said.

"It is expected of customers to apprise themselves of their rights while dealing with their banks. On the other hand, it is the duty of bank officials to make their customers aware of their rights at the time of providing any bank product or service," Mahajan added.