Chapter: 7 Role of R. B. I. and Other Agencies in Financial Literacy



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Chapter: 7

Role of R.B.I. and Other Agencies in Financial Literacy

The Economic growth and development can take place only by proper Planning, especially if it has to have poverty removal as one of the goals, for which inclusiveness is the imperative. Thus: The planning objective is –attainment of faster & inclusive growth .financial inclusion is necessary.financial exclusion is still unacceptably large in the country. There is lack of financial awareness, which isa major impediment. Financial literacy/ education is a core method and component in achieving financial inclusion. The challenge is reaching the masses. It is a huge challenge in a country like india, which has following demography: A country of 1.25 billion people with rural population of 71%; living in 625,000 villages approximately, spread over 3.3 million sq. Kms, divided into28 states; 7 union territories with23 official languages; and 2,000 dialects approximately. Average literacy level is 61 % of population while povertywise: 27 % live below poverty line. Unfortunately, taking only State of U.P. present i.e. divided after 2001 or Undivided earlier, the problem of Inclusiveness / Exclusive ness is worse than the country as a whole. An extract from a report covering report on Economic Development in U.P. for almost half a century since Independence evidences this aspect and has been given in chapter 1 (C) above. A glimpse in Demography of U.P. as given in that Report is as follows;

Uttar Pradesh is most populous and 4th largest in the country having almost 9% of India’s geographical area (approximately 1294411 sq./M). (Undivided) Uttar Pradesh had 83 districts, 901 development blocks and 112804 inhabited villages. Density of population stood at 473/per sq. k.m. as against 274/per sq.km. in the country. Decadal (10 years average) growth of populations is higher than average national growth as evidenced by censor reports of 1971, 1981 and 1991. It remained 25% for U.P., while for all India it declined from 25 to 23.8%.

Covering an area of 240,928 square kms, UP is one of the largest states of India. Administratively divided into 71 districts and 820 blocks, the state has 107,452 villages. Ranking first in the country in terms of population, the state is densely populated. As against the national average of 324 persons/sq.km., the state has a population density of 689 persons/sq. km. The other elements of the state demographic profile include its predominantly rural character, high level of poverty and low percentage of working population. About 80% of the population lives in rural areas and more than 30% of the population still lives below poverty line. The state economy is predominantly agrarian and more than 70% of the work force is engaged in agriculture and allied activities. The importance of agriculture in the state economy can be gauged from the fact that share of agriculture in State Domestic Product is 35% as against its 22% share in the National GDP.



Districts vary between original 70 post bifurcation to 75, according to political party in power. It is basically an administrative convenience or political ego play and has no particular economic value atleast in U.P. The obvious fact which peeps from the statistics quoted above is that rise in potential numbers needing financial inclusion in U.P. shall be continuously on rising trend, while level of alphabet literacy being low amongst male and female population, with poverty ridden section being singnificant, the challenge of making them financially literate is tougher in U.P. than at national level. In the above scenario we have to see the role of Institutions like R.B.I./government/banks etc.,which has already been discussed in chapters dealing with concepts of Financial Literacy/Education and financial Inclusion, above, for their national level roles but in case of State of U.P.,there will be required specific and innovative roles , which may be required to be played, though general contours of Financial Inclusion/Literacy will remain same for U.P. also.

Role of R.B.I.:

  1. The Reserve Bank: informing about itsRole and function; how is it relevant to the common person; and Evolution of money, as well as how to take care of your currency including counterfeit currency.

  1. Banks and Banking: Why save in a bank and not under your pillow; Different types of deposit accounts;& other banking products. Preference for Taking a loan from a bank – and why not to go to a money lender. Customers’ rights, Grievance redressal, Banking Ombudsman Scheme

  2. Finance: How to take care of your money and plan for your future. And Learning about coins and notes

Target Audience was Rural folks; Urban poor; Children/ students; Women; Senior citizens.

Defense Personnel:

RBI’S Initiatives to deliver the messages of Financial Literacy were:

  1. Multilingual RBI website for the Common Person In 13 languages;

  2. Financial Education page on RBI’s website

  3. Multi-lingual reading material like Comics books (Raju and Money Kumar series).Comic books are becoming popular among children and even among grownups

  4. Educational games ; Awareness programmes;Films, skits, road shows

  5. Participation in exhibitions - stalls on financial education and Financial Education camps in remote places - Outreach visits

  6. Essay/Quiz competitions; Visits to RBI by school children.

  7. Mandating creationFinancial Counselling & Literacy Centres by all State Level Bankers Commitees in all States.

  8. Talks on Radio/Television

  9. Other Initiatives of misc. nature:- Introduction of Financial Education in Schools and Colleges

Specially incorporating information about Banking Ombudsman Scheme; and Banking Codes and Standards Board of India; and introduction of Young Scholars’ Scheme

Role of Government:

1. Looking Ahead there is distinct Need for Upscaling the Financial Literacy Drive and Pedagogy of Financial Education by encouraging CAPACITY building in educational institutions and among NGOs: and training of trainers programmes and RBI has to remain in forefront in this endeavor complementing the efforts.Virtual Classrooms need to be created andInnovative dissemination channels have to be adopted

2. Financial Inclusion Fund need to have maximum application for financial literacy.

3. Nodal national organisation for financial literacy

Collaboration:

Involvement of grassroot organisations in collaboration with other stake holders need to be given a push and for this Government has to play its role.

Role of Banks:

Banks and financial institutions have a role in promoting financial literacy Adoption of schools by banks and financial institutions. The term ‘Citizen’ in the Citizen’s Charter implies the clients or customers whose interests and values are addressed by the Citizen’s Charter and, therefore, includes not only the citizens but also all the stakeholders, i.e., citizens, customers, clients, users, beneficiaries, other Ministries/ Departments/ Organisations, State Governments, UT Administrations etc. The Citizen’s Charter is not legally enforceable and, therefore, is non-justiciable.  However, it is a tool for facilitating the delivery of services to citizens with specified standards, quality and time frame etc. with commitments from the Organisation and its clients.  Department of Administrative Reforms and Public Grievances in Ministry of Personnel, Public Grievances and Pensions, Government of India, in its efforts to provide more responsive and citizen-friendly governance, coordinates the efforts to formulate and operationalise Citizen’s Charters in Central Government, State Governments and UT Administrations.   It provides guidelines for formulation and implementation of the Charters as well as their evaluation.

Role of NABARD:

This Institution has been given responsibility to manage the Financial Inclusion Fund set up by the Central government. It must be used juditiously to promote Financial literacy in the country and specially in those states where difficult situation exists in this regard. U.P. qualifies in that category.



Role of Banking Ombudsman:

Very important responsibility falls on shoulders of B.O. as the financial literacy efforts on its part will directly help mitigation of consumer grivances, which if successful, increases the pace and depth of Financial Inclusion and avoidance of malpractices in banks functioning. About B.O’s Role, following procedings are appended to get an idea as to what all is being done by B.O. and what all can be and expected of B.O.



The Banking Ombudsman Scheme 2006:

As an effective step towards ensuring best services by banks in India to their customers, The Banking Ombudsman Scheme (BOS) was introduced in the year 1995 by the RBI. The purpose behind introducing the BOS was to provide expeditious and inexpensive redress of customers’ grievances against deficiencies in banking services provided by Commercial Banks, Scheduled Primary Co-operative Banks and Regional Rural Banks. Due to changing levels of expectations of the customers of various banks and the range of new products offered by these banks, the BOS has undergone extensive changes in June 2002 (BOS 2002) and December 2005 (BOS 2006). BOS 2002 introduced “Review Authority” and “Arbitration and Conciliation Procedure” in the Scheme. While augmenting the scope of the Scheme, BOS 2006 removed the above two major provisions of BOS 2002. The BOS 2006 brought in the concept of “Appellate Authority” and made the administration of the Scheme, the responsibility of RBI. In May 2007, the BOS 2006 was amended further to enable appeal against Award or rejection of a complaint for reasons stipulated under the BOS, to the Appellate Authority. The BOS 2006 was amended last in February 2009 to include deficiencies arising out of internet banking. Under this amended BOS, a customer can complain to the Banking Ombudsman (BO) against the deficiencies in almost any banking service including credit cards, ATM and internet banking. In addition, a customer would also be able to lodge a complaint against the bank for its non-adherence to the provisions of the Fair Practices Code for lenders or the Code of Bank’s commitment to Customers issued by the Banking Codes and Standards Board of India (BCSBI). Working group for revision and updation of the Banking Ombudsman Scheme 2006: Introduction of various new banking products coupled with advent of technology in banking warranted a fresh look at the BOS 2006. Further, the Committee on Customer Service in Banks (Damodaran Committee) and the Rajya Sabha Committee on Subordinate Legislation in their report on the BOS had made certain recommendations. In view of this, an internal Working group for revision and updation of the BOS 2006 was constituted by the RBI in July 2012. The Working Group submitted its report in January 2013. Some of the important recommendations of the Working Group pertain to extending the BOS to non-scheduled urban cooperative banks/district and state co-operative banks, modifying the definition of ' bank' in the BOS, pecuniary jurisdiction of BO, opening of new offices of Banking Ombudsman (OBOs), introduction of fresh grounds of complaint, appointment of additional Ombudsman in offices with high volume of complaints, and increasing public awareness about the BOS. The recommendations of the Working Group are being examined by the Customer Service Department of RBI for implementation.



Annual BO Conference:

The Annual Conference of Banking Ombudsmen was held on January 4, 2013 at RBI Mumbai. The Conference was inaugurated by the Hon'ble Governor, Dr. D Subbarao. In his inaugural speech the Governor expressed satisfaction on the commendable job being performed by the Banking Ombudsmen and the banks, within their ambit, resultantly witnessing considerable improvement in the area of customer service and grievance redressal. While highlighting the importance of town-hall events being organised by the Banking Ombudsmen in co-ordination with banks as a valuable source of customer feedback, the Governor stressed that these events should not lose its objectivity and should be executed in its true spirit. Considering that the Banking Ombudsman Scheme remained largely an urban- literate phenomenon, the Governor desired that the senior officers of banks and RBI may make it a point to visit at least a few remote rural and semi urban branches every year to understand ground realities. He urged that requisite efforts be made to reach out to those segments and geographies that remain unserved or underserved. Governor, also urged to identify five best practices for the banks and obtain five commitments from the Banking Ombudsmen during the conference. Speaking on the occasion, Deputy Governor, Dr. K C Chakrabarty said that though the fact that the offices of the Banking Ombudsman receive more than 70000 complaints a year bears a testimony to the credibility of the Banking Ombudsman Scheme, it also reflects on the poor redress system of banks as it shows that the customers repose greater faith in the Banking Ombudsman. He emphasized banks to make efforts to strengthen their grievance redressal mechanism by proactively reviewing their processes, improving efficiency and delivering promised services in a fair, non-discriminatory and transparent manner. He stressed that the banks needed to address issues of safety and security in electronic banking to increase customer confidence and also to bring in uniformity in the service charges levied. The Conference was attended by the Top Management of RBI, Director DFS, Ministry of Finance, GoI, Chairman IBA, SBI, CMDs/CEOs of major commercial banks in Public and Private Sector, BCSBI, CAFRAL, IRDA, SEBI, CIBIL and NPCI.

: Annual BO Conference 2012 - Five commitments by Banking Ombudsmen

1. Quick Turnaround Time - Shorter time taken to deal with the complaints will instil confidence in the people in the grievance redress mechanism of the Banking Ombudsman Scheme. In this regard, Banking Ombudsmen should endeavour to dispose of complaints registered over the Complaint Tracking System (CTS) within a maximum of two months.

2. Access to the complaint tracking system facility to be given to Banks: The banks and the offices of Banking Ombudsmen should fully utilise the CTS feature that supports uploading of documents/queries/clarifications, etc. by banks and the Banking Ombudsmen. Customer Service Department of RBI will create necessary access for the Principal Nodal Officers of the banks to enable them to monitor the position of bank-wide complaints at a single location. This will facilitate quicker action as well as less-paper handling of cases as a part of our ‘go green’ efforts.

3. Inter district mobility of bo within the state - Banking Ombudsmen should be mobile, make efforts to adjudicate cases by taking their office as close to the complainant as possible. This will not only increase awareness but also the faith of the common person in the Banking Ombudsman Scheme, who would feel empowered by the opportunity to present their case in person. The Banking Ombudsmen may hold sittings at districts of their region depending on larger incidence of complaints from a particular jurisdiction.

4. Blog site - The Banking Ombudsmen may exchange information and post important decisions on a dedicated blog-site to encourage greater knowledge dissemination.

5. Iba-Npci Bridge For Resolution Of Atm Disputes - In order to speed up the dispute resolution mechanism in ATM transactions as also to ensure technically competent resolution in the disputes involving two banks, the IBA and NPCI would jointly evolve a platform for dealing with such cases. The offices of Banking Ombudsmen would admit these complaints only if these remain unresolved at the end of this process. In all ATM related disputes before the Banking Ombudsmen, the banks’ submissions should be from a senior IT official designated for the purpose. :



Annual BO Conference 2012 - The five best practices for banks:

1. Acknowledgement of Allapplications/Requests Issuing an acknowledgement of customer level request is not a uniform practice. Consequently, several grievances and service requests as also potential business requests go unnoticed/unacknowledged and unaccounted for. Banks, therefore, must put in place a system of acknowledgment of receipt of all kinds of customer requests. This will ensure that the customers as well as non-customers have access to the banking system and its grievance redress machinery in case of need.

2. Feedback On Quality Of Service Experience - Banks need to evolve a quick and easy way to register feedback on service quality/complaints through such means as text messages viz. ‘SMS Happy/Unhappy’ using mobile telephony. In all such cases, the banks shall revert to the customer early, preferably within 48 hours. This will go a long way to improve the customers’ faith in the redress system and would be an effective feedback mechanism for the banks to assess and further improve their services.

3. No Discrimination between Home/Non-Home Customers - The banks believe that customers should get basic banking services at all the branches, home or otherwise. Banks will decide the basic retail banking services that will be offered to non-home branch customers. These services and charges applicable at non-home branches will be standardised and charges transparently displayed / notified for information of the public and customers. Banks will simultaneously develop safety measures to ward off threats geared against fraudulent machinations.

4. Safety And Security Of E-Transactions - For ensuring safety and security and thereby building customer confidence in electronic banking, banks shall endeavour to work out a policy on zero liability/compensation/insurance at appropriate cost including customer education and hand holding sensitization efforts. Banks shall do all that is required to make electronic banking safe for the customers. These measures inter-alia will include setting appropriate limits in regard to the amount, frequency, number of third party beneficiaries etc.

5. Dedicated Helpline - Misinformation about banking products often gives rise to customer complaints. Banks should set up a dedicated Helpline manned by experienced personnel to impart correct and crucial information about the products to the customers. Frontline staff should also be in a position to explain the features of all Banks’ products to the customers.



26th Conference of State Finance Secretaries:

The 26th conference of the State Finance Secretaries was convened by IDMD, RBI in Mumbai on May 21st, 2013. While inaugurating the Conference, the Governor urged State Finance Secretaries to visit a few districts to get first-hand information on problems faced by pensioners and initiate corrective action. During the Conference, CGM, CSD highlighted certain issues related to pension, cyber-crimes, mis-selling of third-party products. It was decided that the State Governments would endeavour to ensure uniformity in pension regulations and alignment of the same with the central pension regulations, to the extent possible. They were requested to align their identification requirements to the KYC norms of RBI for banks and to partner with banks for prompt and correct payment of pension, wherever direct electronic payment has not been embraced. It was also decided that they would associate themselves with the BOs during the awareness programs and sensitize the police machinery for prompt lodging and investigation of cybercrimes. In order to curb mis-selling of third party products and pre-empting financial frauds, it was decided that the State Governments would coordinate with RBI and provide market intelligence and critical information for prompt regulatory intervention.



Open House Event:

Dr K C Chakrabarty Deputy Governor participated in an Open House event organized in Mumbai on June 03, 2013 by one of the NGOs committed to protection of consumer rights. The major issues discussed/debated were competition not having intended consequences for consumers of banking services, de-regulation of interest rates/service charges had resulted in exploitation/cartelization, mis-selling of third party products by banks, misreporting by banks to CIBIL and the consequent harassment, RBI to decide on reasonableness of charges and not delegate to IBA/Board of banks, simplification of KYC norms, improving effectiveness of grievance redress mechanism and regulating the sale of gold coins by banks.



Regional Conferences of BOs:

The lead OBO of every zone has been entrusted with the responsibility of organising and conducting the Regional Conferences of Banking Ombudsmen in their zone. The main purpose of such Conferences is to ensure uniformity in decision making among the BOs and to exchange views on important systemic issues.During theyear all nodal offices organized such conferences in their zone. On sidelines of these conferences, a meeting is also held with the Zonal Heads of major banks of the region to discuss customer service related issues of topical interest and sharing of regulatory concerns and expectations with banks,, besides discussing practical issues, problems & obstacles impeding prompt resolution of customer grievances. Meetings with Nodal Officers/Controlling Heads of banks In order to ensure quantitative and qualitative resolution of complaints as also to get feedback from the banks, periodical meetings were held by OBOs with Nodal Officers of the banks. Such regular meetings with nodal officers help in ironing out problems in resolution of complaints. Wherever problems persist and adequate responses to complaints are not forthcoming, the matter is taken up with the respective controlling heads.



Offsite sittings of Banking Ombudsmen:

During Annual Banking Ombudsmen Conference held on January 4, 2013, the Governor, RBI had highlighted the need to broaden the reach of BOS by increasing mobility of the BOs within their jurisdiction by identifying districts of the region and putting in place system of conducting sittings at such places. Taking this forward, OBOs organized sittings at district headquarters to resolve complaints pertaining to the branches of that region. During these sittings attempts were made to resolve complaints on-the-spot. Considering the response and the added benefit of reaching out to complainants and making the scheme popular, the initiative has proved very effective.



Efforts of OBOs

As decided in the Annual Conference of Banking Ombudsmen 2011 Town-Hall Events were organized by all OBOs mainly in Tier II cities within their jurisdiction. The objective of organizing such events is to create awareness among the public on how to transact responsibly in their dealings with banks and in the case of a dispute or grievance, the avenues available to the customers under the individual banks’ internal grievance process as well as recourse to the Banking Ombudsman. These events are conducted in local language and Hindi. During the year OBOs conducted (36) Town Hall Events. B.O. Kanpur office,in U.P., it was done in Jhansi District. Considering the fact that the OBOs are mainly located in State capitals only, the OBOs engage in activities to spread public awareness about the BOS in rural and semi-urban areas. During the year 15 OBOs situated across the country organized various awareness campaigns/ outreach activities within the area of their jurisdiction. A large number of villagers, school, college students, bank customers, bank officials of public and private sector banks, representatives from Pensioners’ Association, Depositors’ Association are involved in these awareness programmes. Information about salient features of the BOS, latest guidelines issued by RBI, BCSBI Code, issues related to pension, education loans, precautions to be taken in using ATM cards, genuine vis-à- vis counterfeit currency notes etc. is given to participants and their queries on these issues are also replied. OBOs also participated in the outreach programmes, financial literacy camps organized by the Rural Planning Credit Department of RBI. Documentary films, publicity through local newspapers, All India Radio, Doordarshan, setting up stalls at various public festivals like Pushkar Mela, Kumbha Mela, Bikaner Camel Fair, Winter festival of Mount Abu etc, participating in trade fairs, book exhibitions, live interactive programmes on Doordarshan, AIR were some of the measures initiated to spread awareness about the BOS.



Sharing of Information with Media:

The practice of sharing information on complaints handled by OBOs with local media started after conclusion of the Annual Conference of Banking Ombudsmen 2011, is well received by local press. During such Press Meets BOs share information regarding complaints received and resolved, including important cases and awards given. These Press Meets are extensively covered in several newspapers, including Hindi and vernacular languages.



In-Cognito Visits to Bank-Branches:

During the year, random In-cognito visits of bank branches were undertaken by OBOs. BOs also visited some bank branches during outreach programmes to assess the quality of services extended by the branch to customers and members of public in general. During these visits compliance with the requirements under clause 15 of the BO scheme i.e. Display salient features of the scheme for common knowledge of public, was also ascertained. The findings of such in-cognito visits are discussed with the branch officials as well as Nodal Officers so as to improve upon existing system and procedures and to excel in service rendered to the bank customers.



Knowledge Sharing - Capacity Building: OBOs organized meetings with branch heads / staff of banks, arranged workshops for bank managers, participated in banker-customer meets arranged by banks, meetings of Committees constituted under the Lead Bank Scheme/DCC and SLBC and Customer Service Centres, delivered lectures to bank officials, college students, pensioners army jawans on various provisions of the BOS 2006, arranged Knowledge Sharing Programmes in co-ordination with banks,With a view to up-grading skills of Dealing Officers of OBOs and to help them better understand and appreciate the nuances of the underlying transactions, OBOs arranged in-house training programmes on subjects like net-banking, ATM operations, pension etc. OBOs also arranged sessions with other BOs for sharing of experience with staff of the OBO. With a view to up-grading skills of Dealing Officers of OBOs and to help them better understand and appreciate the nuances of the underlying transactions, OBOs arranged in-house training programmes on subjects like net-banking, ATM operations, pension etc. OBOs also arranged sessions with other BOs for sharing of experience with staff of the OBO.

Important Notifications Relating to Customer Service issued by the RBI in 2012-13



July 02, 2012: Master circular on customer service in Banks -DBOD No. Leg.BC.22//09.07.006/2012-13: All Important instructions issued by the bank in the area of customer service up to June 30, 2012 have been consolidated in the Master Circular. It has also been placed on the website of RBI. Banks have also been advised to ensure that copies of the circular are available in all their branches so that the customers can peruse the same.

July 02, 2012: Master Circular – Know Your Customer (KYC) norms / Anti-Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002- This Master Circular is a consolidation of the instructions on Know Your Customer (KYC) norms /Anti- Money Laundering (AML) standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under PMLA, 2002 issued up to June 30, 2012. The same has also been placed on the website of RBI

July 02, 2012: Master Circular - Facility for Exchange of Notes and Coins- DCM.(NE).No.G- 1/08.07.18/2012-13 – Instructions issued to all branches of banks in all parts of the country to provide the exchange facility and other service mentioned in the circular, more actively and vigorously to the members of public so that there is no need for them to approach the RBI Regional Offices for this purpose.

July 02, 2012: Master circular on credit card operations of banks -DBOD.No.FSD.BC. 23/ 24.01.011/ 2012-13- Instructions regarding the framework of rules/regulations/standards/practices for the credit card issuing banks/NBFCs for their credit card business issued from time to time have been consolidated in the master circular. Guidelines are issued to Banks in order to ensure that their credit card operations run on sound, prudent and customer friendly manner.

July 02, 2012: Master Circular- Disbursement of Pension by Agency Banks- DGBA. GAD. No. H- 4/31.05.001/2012-13 Various circulars issued by concerned Ministries/Departments with the approval of Controller General of Accounts, Ministry of Finance, Government of India or by State Governments on the payment of pension to retired Government employees and instructions regarding payment of basic pension, increased Dearness Relief and other benefits havebeen consolidated in this Master circular.

July 02, 2012: Master Circular - Lending to Priority Sector- RPCD. CO. RRB. BC. No. 6 /03.05.33/2012-13-. The master circular consolidates all instructions issued by Reserve Bank on Priority Sector lending have been consolidated in this master circular.

July 13, 2012: National Electronic Funds Transfer (NEFT) System - Rationalization of customer charges - DPSS CO (EPPD) /98/04.03.01/2012-13 – With a view to pass on the benefits of increasing volume of transactions to the customers so as to incentivize greater use of the electronic payment system in place of cumbersome paper-based mechanism like cheques/DDs, RBI has rationalized the customer charges levied by the banks for NEFT transactions as under: Value Band Maximum Charges (exclusive of service tax) Amounts up to Rs 10,000/- Rs. 2.50/- Amounts from Rs. 10,001/- to Rs. 1 lakh Rs. 5/- Amounts above Rs. 1 lakh up to Rs. 2 lakh Rs. 15/- Amounts above Rs. 2 lakh Rs. 25/-

August 10, 2012: Issue of multicity / payable at all branches cheques by CBS enabled banks- DPSS.CO.CHD.No.274/03. 01. 02/2012-13- Taking into consideration the availability of processing infrastructure for clearing outstation cheques at all clearing locations across the country and to bring about further efficiency in cheque clearing, all CBS enabled banks have been advised to issue only “payable at par” / “multi-city” CTS 2010 Standard cheques to all eligible customers. Banks have been advised to put in place appropriate Board approved risk management procedures based on risk categorization of accounts. Since such cheques (payable at par) are cleared as local cheques in clearing houses, customers should not be levied extra charges. The updated Board approved policy of banks in this regard may be placed on the web-site of banks.

August 13, 2012: Stipulation of compensation for delay in Clearance of Local Cheques- DPSS.CO.CHD.No.284/03.06.03/2012-13- Banks are advised to reframe their cheque collection policies (CCPs) to include compensation payable for the delayed period in the case of collection of local cheques. In case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bankinterest rate shall be paid for the corresponding period of delay. Banks have been advised to give publicity to their revised CCPs through display board in branches and on their website for better customer service and dissemination of information.

September 05, 2012: Banking facilities to visually challenge / persons with disabilities- DBOD. No. Leg. BC. 38/09.07.005/2012-13- In terms of extant instructions in this regard, banks should offer all banking facilities such as cheque book facility including third party cheques, ATM facility, Net banking facility, locker facility, retail loans, credit cards etc., to visually challenged persons without any discrimination as they are legally competent to contract. Further, banks are required to take necessary steps to provide all existing ATMs / future ATMs with ramps and to make at least one third of new ATMs installed as talking ATMs with Braille keypads. In view of the observation by the Office of the Chief Commissioner for Persons with Disabilities that visually challenged persons are facing problems in availing banking facilities like internet banking, banks were advised to strictly adhere to above instructions and extend all banking facilities to persons with blindness, low-vision and other disabilities.

October 01, 2012: Policy Guidelines for issuance and operation of Prepaid Payment Instruments in India- Amendments DPSS.CO.PD.No.560/02.14. 006/2012-13- In partial modification to the extant instructions, the five categories of semi-closed PPIs have been replaced with three broad categories. i. Semi-closed system prepaid payment instruments can be issued upto Rs.10,000/- by accepting minimum details of the customer, provided the amount outstanding at any point of time does not exceed Rs.10,000/- and the total value of reloads during any given month also does not exceed Rs.10,000/-. These can be issued only in electronic form;

Semi-closed system prepaid payment instruments can be issued from Rs.10,001/- to Rs.50,000/- by accepting any 'officially valid document' defined under Rule 2(d) of the Prevention of Money Laundering Act. Such PPIs can be issued only in an electronic form and should be non-reloadable in nature; Semi-closed system prepaid payment instruments can be issued upto Rs.50,000/- with full KYC and can be reloadable in nature.



December 12, 2012: Guidelines for issue of debit cards by banks- DBOD.No.FSD.BC.66/24.01.019/2012-13- Banks can issue debit cards, including co-branded debit cards, without seeking prior approval of the Reserve Bank,subject to the guidelines given in the in the circular.

December 12, 2012: Issuance of rupee denominated co-branded pre-paid cards - DBOD. No. FSD.BC. 67/24.01.019/2012-13 - Banks have been granted general permission to issue rupee denominated co-branded pre-paid cards in India, subject to the terms and conditions prescribed in the circular.

January 01, 2013: Implementation of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) - Regarding - RPCD.GSSD.BC.No. 55/09. 16.01/2012-13: Against the backdrop of instances reported by the implementing agencies at the States / ULBs level regarding non-cooperation of banks in sanctioning loan to urban poor beneficiaries under the self-employment component of the scheme, banks were advised to follow instructions as enumerated hereunder: (i) Liberal financing may be done under SJSRY as it is the only Scheme which directly assists the urban poor. (ii) Review of performance under SJSRY scheme may be included as standing agenda item in the State level Bankers' Committee (SLBC) and District Level Bankers' Committee (DLBC) meetings. (iii) A monthly progress report in the prescribed proforma for the State may be sent to the Secretary, Urban Development of each State and to the Joint Secretary (UPA), Ministry of HUPA, UPA Division, Nirman Bhavan, New Delhi-110001

January 17, 2013: Declines in ATM transactions – reporting of - DPSS.CO.PD.No.1207/02.10.002/2012-2013: In terms of extant instructions, banks are required to place a quarterly review of ATM transactions before its Board of Directors, indicating, inter alia, the denial of services to the customers at ATM sites, reasons thereof and the action taken to avoid recurrence of such instances and forward a copy of the report along with the observations of the Board to the Chief General Manager, Reserve Bank of India, Department of Payment & Settlement Systems, Mumbai. Banks have been advised that this directive is issued under section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007). Non-adherence to the provisions of this circular shall attract penalty as prescribed under the Payment and Settlement Systems Act 2007.

February 14, 2013: Gold Deposit Scheme- DBOD. No. IBD.BC. 81/23.67.001/2012-13: In view of Notification issued by the Central Government (Department of Financial Services, Ministry of Finance) enabling Mutual Funds / Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations to deposit part of their gold with the banks under the scheme the extant guidelines for operation of the Gold Deposit Scheme were modified and issued to banks vide this circular.

February 28, 2013: Security and Risk Mitigation Measures for Electronic Payment Transactions- DPSS (CO) PD No.1462/02.14.003 / 2012-13: - With cyber-attacks becoming more unpredictable and electronic payment systems becoming vulnerable to new types of misuse, it is imperative that banks introduce certain minimum checks and balances to minimise the impact of such attacks and to arrest / minimise the damage. Accordingly, banks were advised to put in place security and risk control measures as detailed in this circular. Banks were advised to quickly implement these security/risk mitigation measures.

March 14, 2013: Collection of Information on Customer Grievances - DPSS. CO. OSD. No. 1604/ 06.06.005/ 2012-13 : All entities authorised for issuance of prepaid payment instruments in India were advised to submit the data related to customer grievances received and resolved, on a quarterly basis.

March 18, 2013: Standardization and Enhancement of Security Features in Cheque Forms / Migrating to CTS 2010 Standards - DPSS. CO.CHD.No.1622/04.07.05/2012-13: On a review of the progress made by banks in migration to CTS-2010 standard cheques and in consultation with a few banks and Indian Banks Association, instructions regarding arrangements for clearing of residual non-CTS-2010 standard cheques beyond the cutoff date of March 31, 2013, were issued. The circular inter-alia stated that: All cheques issued by banks (including DDs / POs issued by banks) with effect from the date of this circular shall necessarily conform to CTS-2010 Standard.  Banks shall not charge their savings bank account customers for issuance of CTS-2010 standard cheques when they are issued for the first time.  All residual non-CTS-2010 cheques with customers will continue to be valid and accepted in all clearing houses [including the Cheque Truncation System (CTS) centers] for another four months up to July 31, 2013, subject to a review in June 2013.  No fresh Post Dated Cheques (PDC) / Equated Monthly Installment (EMI) cheques (either in old format or new CTS-2010 format) shall be accepted by lending banks in locations where the facility of ECS / RECS (Debit) is available.

March 28, 2013: Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards / Combating of Financing of Terrorism (CFT) / Obligation of Banks under Prevention of Money Laundering Act (PMLA), 2002 - Simplifying norms for Self Help Groups - DBOD.AML.BC.No.87/14.01.001/2012-13 : In order to address the difficulties faced by Self Help Groups (SHGs) in complying with KYC norms while opening savings bank accounts and credit linking of their accounts, KYC verification of all the members of SHG need not be done while opening the savings bank account of the SHG and KYC verification of all the office bearers would suffice. As regards KYC verification at the time of credit linking of SHGs, it is clarified that since KYC would have already been verified while opening the savings bank account and the account continues to be in operation and is to be used for credit linkage, no separate KYC verification of the members or office bearers is necessary.

May 07, 2013: Delay in re-presentation of technical return cheques and levy of charges for such returns - RBI/2012-13/493 DPSS. CO. CHD. No. 2030/03.06.01/2012-2013 : In light of instances of banks (i) levying cheque return charges even in cases where customers were not at fault in the return and (ii) delaying the re- presentation of the cheques which had been returned by the paying banks under technical reasons, banks were advised to adhere to the following instructions with immediate effect: Cheque return charges shall be levied only in cases where the customer is at fault and is responsible for such returns. Cheques that need to be re-presented without any recourse to the payee, shall be made in the immediate next presentation clearing not later than 24 hours(excluding holidays) with due notification to the customers of such re- presentation through SMS alert, email etc.

May 27, 2013: Lending against Gold DBOD.No.Dir.BC.96/ 13. 03.00/2012-13: Banks were advised that while granting advance against the security of specially minted gold coins sold by them, banks should ensure that the weight of the coin(s) does not exceed 50 grams per customer and the amount of loan to any customer against gold ornaments, gold jewellery and gold coins (weighing up to 50 grams) should be within the Board approved limit.

May 31, 2013: Know Your Customer (KYC) / Anti-Money Laundering (AML) / Combating of Financing of Terrorism (CFT) Guidelines Unique Customer Identification Code (UCIC) for Banks' Customers in India- DBOD.AML.BC.No.101/14.01.001/2012-13: In view of difficulties expressed by some banks in implementing UCIC for its customers, for various reasons, keeping in view the constraints, the time for completing the process of allotting UCIC to existing customers is extended up to March 31, 2014.

May 31, 2013: Acknowledgement by banks at the time of submission of Form 15-G / 15-H- DBOD.No.Leg.BC. 100/09. 07.005/ 2012-13: With a view to protect interest of the depositors and for rendering better customer service, banks are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability

June 28, 2013: Guidelines on Wealth Management / Marketing/ Distribution Services Offered by Banks - Draft Guidelines- DBOD. CO. FSD. No./24.01.026/2012-13: The draft guidelines on Wealth Management and Marketing/Distribution services have been prepared and forwarded to banks seeking their comments.



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