Eleven commercial banks have joined the Reserve Bank of India to set up the Banking Codes and Standards Board of India.
The board would function as an autonomous body that would lay down a comprehensive code of conduct to ensure fair treatment of customers.
Six public sector banks, three private sector banks and two foreign banks have so far come together to form the BCSBI. The public sector banks include State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India and Union Bank of India.
The private sector banks are ICICI Bank, HDFC Bank and Federal Bank. HSBC and Standard Chartered Bank represent foreign banks.
The banks have participated as promoters with RBI since the board is registered as a society under the Societies Registration Act.
In order to become members of the board, they would be required to sign an agreement expressing their commitment to abide by the codes laid out by the board.
The board would be chaired by former RBI deputy governor K J Udeshi. It is in the process of laying down the codes and one of the key issues addressed would be regarding the information sought by banks while opening of accounts.
As per the new set of norms, banks can seek information only on "know your customer" related queries, which basically refer to establishing the residential proof and identity of the person.
RBI has noticed that some of the banks have elaborate account opening forms, which require customers to furnish personal information not related to banking.
Banks are also expected to explain to the customers as to why certain informations are required. Another area of concern is the conduct of direct selling agents employed by banks for various businesses like personal loans, credit cards, etc. The board is likely to make banks responsible for the behaviour of the DSAs.
Similarly, banks are also expected to convey basic details to customers at the time of opening accounts, like how much interest would be charged if the balance falls below the minimum required to maintain the accounts.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
