Banking watchdog revises codes to drive greater transparency in transactions
23 Sep 2009
Consumers who avail loans from banks are now assured of more transparency in pricing with the newly formed independent and autonomous watchdog, Banking Codes and Standards Board, having issued a directive to member-banks to clearly state their lending policies and practices upfront.
Consumers availing of floating rate home loans will need to be informed of the reference to rate to which the floating rate is anchored and banks will also have to disclose changes in such reference rates on their websites whenever such changes happen, in real time.
Chairman of BCSBI, a joint initiative of the Reserve Bank of India (RBI) and Indian Banks' Association (IBA) clarified the new requirements while unveiling revision in banking codes on Tuesday.
The revised codes will cover almost all major commercial banks in the country which have accepted the baking codes requiring banks to announce minimum service
standards. Banks will now have to clearly specify the charges and the pricing mechanism and they can't charge in excess of what charges they declare.
Speaking on the occasion, RBI deputy governor K C Chakrabarty said the codes would essentially help those vulnerable sections of society which have no other platform for redressal of their grievances. He added that as regulator the central bank has a responsibility towards the customer.
Under the revised code, banks will have to bring greater transparency, further enhancements in systems in banking practices related to customer service a more responsive system for grievance redressal and provide additional protection to customers.
