RBI Governor for highest priority to customer service

Mumbai: Banks should give the highest priority to customer service and reduce their transaction cost as well as procedural inconveniences to the customers as a matter of priority. Banks should also be prepared in terms of systems and skills to meet theof systems and skills; capital adequacy for this purpose was less of a concern at this stage. Dr. Y.V. Reddy, Governor of RBI has exhorted bankers on these lines at a meeting held at the Reserve Bank of India last Saturday. The Reserve Bank meets Chief executives of select banks every six months in order to share ideas and concerns of mutual interest.

Chairmen and Managing Directors of all public sector banks and chief executives of some select private Indian and foreign banks were present at the meeting. Smt. K.J. Udeshi, Deputy Governor, Smt. S. Gopinath, Smt. Usha Thorat, Shri A.V. Sardesai, Executive Directors and other senior officials of the Reserve Bank of India were also present.

The Governor informed the banks that the Reserve Bank has appointed a Standing Advisory Committee under Shri S S Tarapore, former Deputy Governor of the Reserve Bank, to advise the central bank on auditing of its procedures and practices with a view to making them simpler from the viewpoint of enabling banks to render better customer service. The Reserve Bank had advised banks to set up ad-hoc committees on similar lines at their level to look into their own procedures and practices. The Governor urged banks to ensure that the ad hoc committees set up in banks also keep in mind the objectives of customer service of international standard and reduction of transaction costs.

The Governor pointed out that the Reserve Bank was considering the suggestion of appointing relationship managers in banks on a pilot basis to deal with any queries and to coordinate with the Reserve Bank and others. It was also considering developing a mailbox concept to store the clarifications given by the Reserve Bank to individual banks so that other banks could also access those clarifications.

The Governor further urged banks to evolve their loans and investment policies with more initiative and on an interactive basis so that there was transparency, particularly in the area of interest rates. Interest rates charged by banks to their borrowers should be based on individual credit risk assessment rather than deal with them on a category-wise basis. "The Reserve Bank could move out of prescription if banks have transparent loan and investment policies," he stated.