Thursday, July 8, 2010

Customer Service in Banks

Customer Service Committee - 3

It was Raj Kumar Talwar, the tallest of bankers India ever had, Chairman of SBI, who headed the first Committee on Customer Service in the seventies.  The report and recommendations were implemented by the Government and RBI effectively for over a decade and half.  Followed was another Chairman of SBI, Mr MN Goiporia again headed a Committee on Customer Service in early nineties, when the wave of Economic Reforms and Banking Sector Reforms were ushered in by the Government headed by late Shri PV Narasimha Rao as Prime Minister and ably supported by Dr Manmohan Singh as Finance Minister.

Much water has flown since then.   Banking industry underwent radical changes in terms of interst rates deregulation, Balance Sheet management, NPA management, ALM and Risk Management, Computerisation, Prudential Norms, Branch Licensing Policy, Manpower Management, level playing field between public, private and foreign banks and consolidation of the industry at a large scale.

Committee on Reforms were headed twice by Shri M Narasimham (former Governor of RBI and currently Chairman of ASCI in Hyderabad) in 1992 and 1997 followed by Dr Raghuram Rajan, a former Professor in Chicago University and currently Advisor to the Prime Minister of India.  Several other Committees have also have gone into important aspects of banking and finance during the last two decades to bring the Indian Banking industry to global standards.  A new legislation called Consumer Protection Act was also enacted and amended during this period.  Besides, the mechanism of Ombudsman is now functioning for Banking, Insurance and Microfinance institutions all over the country.  Also, a Banking Code and Standards Board of India has been established over fifteen years back to ensure high standards in the banking industry.

The present announcement of a third Committee on Customer Service headed by former Chairman of SEBI, Shri M Damodaran is a welcome development.  The slogans "Customer is King" or "Customer is always right" can not be merely on paper.  They should always be translated into reality.  Long live Customer Service in the Indian Banking!

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