‘Banking Codes and Standards Board of India’ (BCSBI) has been registered as a society under the ‘Societies Regulation Act, 1860’. It is functioning as an independent and autonomous institution to monitor and ensure that the Banking Codes and Standards adopted by the banks are adhered to in true spirit while delivering their services
BCSBI, in collaboration with the Indian Banks’ Association (IBA), evolved two codes
- Code of Bank’s Commitment to Customers
- Code of Bank’s Commitment to Micro and Small Enterprises
The codes are to set minimum standards of banking practices for member banks to follow when they are dealing with individual customers and micro and small enterprises. These above Two Codes are subject to periodical review and revision from time to time.
The main objective of these Codes is promoting good banking practices, setting minimum standards, increasing transparency, achieving higher operating standards and above all, promoting a cordial banker-customer relationship which would foster confidence of the common man in the banking system.
Code of Bank’s Commitment to Customers
BCSBI describes this as a Code of Customer Rights, which sets minimum standards of banking practices, dealing with individual customers. It provides protection to customers and explains how a bank is required to deal with customers in its day-to-day operations.
The Code does not replace or supersede regulatory or supervisory instructions of the Reserve Bank of India (RBI) and BCSBI will comply with such instructions / directions issued by RBI from time to time. In addition to that, the Code may have set higher standards than those prescribed in the regulatory instructions. BCSBI further added that they will endeavour to adopt higher standards of banking practices to extend better customer service and achieve higher levels of customer satisfaction.
The main objectives of the Code
- To promote good and fair banking practices by setting minimum standards in bank’s dealings with customer;
- Increase transparency so that customer can have a better understanding of what they can reasonably expect from bank
- To encourage market forces, through competition, to achieve higher operating standards;
- Promote a fair and cordial relationship between customer and their bank;
- To foster confidence in the banking system;
- Promote safe and fair customer dealing in case of banking in a digitized environment;
- To increase awareness of customers and to enhance customer protection.
Code of Bank’s Commitment to Micro and Small Enterprises
This is a code reflecting the bank’s positive commitment to its Micro and Small Enterprise (MSE) customers to provide easy, speedy and transparent access to banking services for their day-to-day operations and in times of financial difficulty.
This code is not only a Charter of Rights of MSE customers but also their responsibilities vis-à-vis their bank.
The provisions of Code of Bank’s Commitment to Customers will also applicable to Micro and Small Enterprise customers whatever relevant.
This Codes sets the minimum standards of banking practices that banks will follow when they are dealing with Micro and Small Enterprises (MSEs) as defined in the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
Objectives of the Code
- To give a positive thrust to the MSE sector by providing easy access to efficient and appropriate banking services
- Promote good and fair banking practices by setting minimum standards for dealings to MSE
- To increase transparency so that MSE can have a better understanding of what they can reasonably expect of the services
- Improve bank’s understanding of MSE’s business through effective communication
- To encourage market forces, through competition, to achieve higher operating standards
- To promote a fair and cordial relationship between MSE sector and banks
- Eensure timely and quick response to their banking needs
- To foster confidence in the banking system
Monitoring of implementation of the codes
BCSBI is not only setting the codes but also monitors the implementation of the Codes through the following methods
- It obtains an Annual Statement of Compliance (ASC) from member banks
- Incognito Visits branches to find out the status of ground-level implementation of Codes
- Though BCSBI is not a complaint redressal forum it studies complaints received from customers and orders / awards issued by Banking Ombudsmen / Appellate Authority to find out whether there is any system-wide deficiency
- Organizes an annual Conference with Principal Code Compliance Officers of the Member banks to discuss implementation issues.
BCSBI is not for addressing redressal of individual grievances. However, it examines each complaint to identify any systemic issue that may exist and takes up the matter with the respective bank to ensure that systems and procedures are suitably amended so that such complaints do not happen again.