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>> The Banking Codes and Standards Board of India (BCSBI)

In accordance with the proposal contained in the Annual Policy Statement for the year 2005-06, The Banking Codes and Standards Board of India (BCSBI) was set up on 18th February 2006 as a collaborative effort of RBI and Banks, on the lines of a similar set up in UK to oversee the "Banking Code", a voluntary Code, evolved by the British Bankers Association (BBA), which is adopted by all banks in UK. The proposal for setting up the BCSBI was based on the recommendation made by the Committee on Procedures and Performance Audit on Public Services (Tarapore Committee), in its Report No.6 dealing with Benchmarking, ISO Certification and Performance Audit.

The "Banking Code" of the BBA sets standards of good banking practices for financial institutions to follow when they are dealing with personal customers in the UK. It provides valuable protection for customers on a day-to-day basis as also in the times of financial difficulty. The code applies to savings deposits and current accounts, card products and services, loans and overdrafts and payment services including foreign exchange.
A Governing Council of the BCSBI has been constituted to look after its financial affairs and managerial policies. The Governing Council would consist of members drawn from different disciplines such as banking, law and accountancy. The following is the composition of the first Governing Council of the BCSBI appointed by the Reserve Bank of India:

1. Ms. K.J. Udeshi, Former Deputy Governor, RBI - Chairperson
2. Mr. M.G. Bhide, Former Chairman & Managing Director, Bank of India - Member
3. Mr. M.M. Chitale, Chartered Accountant - Member
4. Mr. S. Divakara, Director General of Forum of Free Enterprise Mumbai & Jt. Hon. Secretary, All India Bank Depositors Association - Member
5. Mr. R.K. Krishna Kumar, Vice Chairman, Indian Hotels Company Ltd. - Member
6. Shri S.R. Kolarkar, Legal Adviser, Reserve Bank of India - Member
7. Mr. V. Baijal, Chief General Manager, Reserve Bank of India - Chief Executive Officer & Member

The tenure of the Governing Council would be five years and the appointment of the Governing Council after five years would be with the concurrence of the RBI. The RBI will fully meet the budgetary requirements of the BCSBI for the first five years while the banks would, during this period, contribute to building its corpus to enable it to eventually become a self-sustaining organisation.
The BCSBI would plan, evolve, prepare, develop, promote and publish voluntary comprehensive codes and standards for banks for providing fair treatment to their customers.

The BCSBI would function as an independent and autonomous watch dog to monitor and to ensure that the banking codes and standards voluntarily adopted by banks are adhered to, in true spirit by banks in delivering the services, as promised, to their customers. The Board will not handle individual cases of complaints and grievances (all such cases will continue to be handled by Banking Ombudsman).

The IBA had brought out its "Bankers' Fair Practice" code in June 2004 and all member banks had adopted it voluntarily. The code was essentially a commitment to be fair and transparent in dealing with individual customers. The IBA had also separately come out with "Fair Practice Code for Credit Card Operations" and "Model Code for Collection of Dues and Repossession of Security" to address specific concerns voiced by customers about banking practices in these areas.

The Reserve Bank of India, while announcing the formation of the BCSBI in the Annual Policy Statement, had requested Indian Banks' Association to set up a Working Group to draft a comprehensive fair practice code covering all the areas of customer service for uniform adoption by banks. Accordingly, the IBA had set up a Working Group to study the international practices and review the existing codes. The Working Group had examined fair practice codes adopted by Bankers in other domains like UK, Canada, Hong Kong, Singapore and Australia and prepared a draft Bankers' Fair Practice Code, duly incorporating some of the finer points from those documents. The Working Group further refined the draft Code incorporating the suggestions from our member banks and submitted it to the BCSBI. BCSBI had made certain further refinements to the Code and the "Code of Bank's Commitment to Customers" was brought out. The Code sets minimum standards of banking practices for banks to follow when they deal with individual customers.

The "Code of Bank's Commitment to Customers" was released by Dr. Y.V. Reddy, Governor, Reserve Bank of India in an inaugural function held at RBI on 1st July 2006.

Banks will be required to register themselves with BCSBI as members and have the Code adopted by their respective boards. Thereafter, when they are ready to implement the commitments contained in the Code, the banks will enter into a covenant with BCSBI binding them to monitoring by BCSBI as far as implementation of the Code is concerned. The banks would also be required to make necessary changes in certain policy and procedural aspects around their products and services. With the adoption of "Code of Bank's Commitment to Customers" by member banks who are members of BCSBI, the following voluntary Codes of IBA would not be applicable to them:

(1) Bankers' Fair Practice Code - effective June 2004
(2) Fair Practice Code for Credit Card Operations
(3) Model Code for Collection of Dues and Repossession of Security

However, member banks who are not members of BCSBI or eligible to become members of BCSBI would continue to follow these Codes.

Grievance Redressal

Member banks of BCSBI would put in place the following grievance redressal mechanism in their banks:

  • Have a Help desk / Helpline at the branch
  • Have a Code Compliance Officer at each Controlling office above the level of the branch
  • Display at each branch name and contact number of Code Compliance Officer
  • Display Name and address of the Banking Ombudsman.

The customer should first approach the help desk of the branch/bank. In case the issue is not resolved, the Code Compliance Officer of the bank may be approached by the complainant. In case the issue is still not resolved to the satisfaction of the customer he/she may approach the Banking Ombudsman. For further details please visit: http://www.bcsbi.org.in

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Monday, December 22, 2014
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