Banks Deprive Seniors of Sops Assured by RBI

Banking, particularly with regards to services, brings the sector squarely within the ambit of the Consumer Protection Act. A customer, a consumer within the Act, could, for non-resolution of issues through processes laid down, approach a Consumer Forum for the ‘deficiency in service’ which, if and when proved, could force the bank to cough up damages.
So, when Delhi resident Radhey Shyam Sharma moved New Delhi Redressal Forum for failing to resolve his issue relating to the issuance of an ‘illegal’ bill of his HDFC Bank credit card, despite a defence put up by the bank attributing the error to the HDFC Bank employee who, they claim, had acted without authorization, the forum upheld the consumer claim back in 2014 and directed HDFC Bank to pay Rs 40,000 to the consumer.

A couple of years later, in 2016, the National Consumer Disputes Redressal Commission (NCDRC) said that HDFC Bank has got ‘no love and respect for India,’ as it put the country’s reputation at stake by not activating the debit card of a couple ‘trapped in a foreign country’ and directed the bank to pay a compensation of Rs 5 lakh to the complainant couple who were stuck in Thailand and Singapore for ‘negligence, inaction and passivity on the part of the bank.’

Cut to today, in 2018, following a series of complaints across banks for failure to comply with an RBI Statement on Developmental and Regulatory Policies laid on October 4, 2017 and pertaining to banking facility for senior citizens and differently-abled persons and published on November 9, 2017, banks – particularly private and multinational – are being charged with discouraging and turning away senior citizens and differently-abled persons from availing banking facilities in branches.

RBI has, through a publicly-available directive, directed all banks to put in place appropriate mechanisms such as dedicated counters providing preference to senior and differently-abled persons, ease of submitting life certificate, cheque-book facility, automatic conversion of status of accounts from fully KYC compliant to senior citizen accounts, additional facilities to visually impaired customers and ease of filing Form 15G/H. For these, instructions had been issued to banks to provide doorstep banking and ensure other facilities by December 31, 2017.

Notwithstanding the need to push digital transactions and use of ATMs, it is imperative to be sensitive to the requirements of senior citizens and differently-abled persons. Banks have been instructed to put in place explicit mechanisms for meeting the needs of such persons so that they do not feel marginalised. In furtherance to the same, Ombudsmen have also been advised to pay heed to complaints in this context.

Now, that said, there are a host of issues regarding senior citizens accounts and ensuing confusion. Where private or multinational banks are concerned, right from the executive up till the manager, the letter and the spirit of the RBI directive is lost.

“A customer’s account cannot be automatically converted into a Senior Citizen Account, once he turns senior, unless s/he makes a request for the same personally,” says Kotak Mahindra Bank’s Colaba (Mumbai) Branch Manager Rajesh Bhalerao. “As for door-step facility too, the customer will have to request for the same and will be provided conditionally to him,” he adds. This, despite the RBI directive according to which: Presently, in some banks, even fully KYC-complaint accounts are not automatically converted into ‘Senior Citizen Accounts’ on the basis of date of birth maintained on the bank records. Banks are advised that a fully-KYC complaint account should automatically be converted into a ‘Senior Citizen Account’ based on the date of birth available in bank’s records.

So, technically what happens is that when the account isn’t automatically converted into a Senior Citizen Account, the customer will automatically be deprived of the benefits of his seniority, despite clear directives by the RBI.

Attempts to ascertain the number of accounts automatically converted by the HDFC Bank from regular accounts to Senior Citizen Accounts and how many of its senior citizen customers, in Mumbai, were offered door-step banking facility failed as despite repeated reminders on phone and through email, HDFC Bank’s officials refused to respond.

At a time when one would imagine that cut-throat competition in banking services would enhance facilities across private and multinational banks, it’s surprisingly the nationalised bank that has been holding its ground and strongly too.

 While the issue of ‘hidden’ charges and ‘non-availability’ of facilities continue to plague private banks, their nationalised counterparts have little to lose yet have been extending ‘personalised’ services as good, ol’ friendly neighbourhood banks for generations on end. And, today, it seems like that’s the best way ahead.

“We have been banking with Dena Bank for years and are very happy with the services,” asserts businessman Mohanlal Solanki whose views are endorsed by son Vinod Solanki who feels that ‘private and multinational banks "loot by way of extra charges" that are invisible and mostly hidden from the customer.’

“Forget senior citizens,” says Vinod Solanki, “Even when one of us is busy with work or simply unable to reach the bank, a bank official drops by to our business place and provides us door-step banking, without a charge too. And this when we don’t even qualify for a Senior Citizen Account.”

Most middle-level business account holders vouch for the service of nationalised banks. “Today, even if a cheque I have drawn is deposited into my bank at a time when there are less funds, the bank manager personally calls me up to inform me about the same and I rush to the bank to deposit the amount to ensure the cheque issued to the third party is cleared,” says Colaba resident Suresh Kanojia. “How many private banks will offer this sort of service? They earn mostly from such lapses and oversights by the customer who doesn’t even realise how he is charged,” he adds.

Nationalised Banks, on their part, provide the services as laid down by RBI through its guidelines and notifications. After all, it just takes an RTI application to obtain details from a nationalised bank that most private or multinational banks will dodge through their maze of ‘communications’, ‘forwards’ and ‘internal’ procedures till the customer is left with little option but to give up. It’s this very attitude of private sector banks that proves counterproductive for business.

“We have been offering door-step banking facility not just for Senior Citizens, even for those who are unable to visit the bank for a personal reason, for over years, even before the RBI issued this notification last year,” says Dena Bank’s Senior Manager Sanjay Gondhalekar. “We offer personalised services to all our customers who have been banking with us for over generations. It’s trust and goodwill that we value more than sheer profit through business,” he adds.

It’s the unwieldy demands of the corporate world and hard deadlines to meet that force most to reach targets by hook or by crook even at the risk of fudging details compromising on trust to achieve deadlines for private sector and multinational banks.

While making loud assurances of ‘personalised’ banking through Dedicated Personal Bankers, it’s the well-orchestrated silence over hidden charges and internal changes to maximise profit for the bank and personal career achievements for the Banker that legally translates into ‘deficiencies in service’ that can be brought by customers before a consumer forum and concurrently ensure compensation and redress. Of the ways to ensure justice and obtain redress, this is the swiftest.

gajanan@draftcraft.in

A version of this story first appeared in Governance Now.