Know
banking codes and get yourself heard
Banking surely has come a long way. You don't have to visit the musty
branches and brave serpentine queues anymore. The ATM can take care of most of
your needs. If at all you need to visit a branch, smiling faces with pleasant
manners would welcome you warmly.
However, the facade drops the moment you have a serious issue — like an
erroneous transaction or wrong entry — with the bank. No technology, no
courtesy can save you from the Kafkaesque nightmare. Suddenly, the bureaucratic
maze would make sure that you run from one counter to the other or follow up
the matter with countless phone calls to find a solution.
That need not be the case. A little bit of awareness about the service
level of banks mandated by the Reserve Bank of India can help you take the bank
to task.
If there is a violation of the code of commitment (available on the websites
of the banks and the Banking Codes and Standards Board of India - http://www.unitedbankofindia.com/uploads/CodeOfBanksCustomer.pdf ) by the bank, you
can take up the matter with the bank's nodal officer. Here are a few
common problems faced by bank customers and how you can find a solution to it.
How to
redress your banking grievances
Around 24% of complaints received by
the Banking
Ombudsman offices are about disputes related to plastic money.According
to the Annual Banking Ombudsman Report 2010-11, the typical complaints include
excessive charges, non-dispensation of money from ATMs, unsolicited credit
cards, mis-sold insurance policies, settlement offers conveyed over the phone
and wrong debits. Even at ET, a sizeable number of readers' queries are related
to ATMs, credit and debit
cards.
I LOAN
FAQ: Failure to regularise
loan accounts
In most cases, banks settle a loan through a compromise if there is a
default in repayment for a considerable period. However, if a loan is repaid
under a compromise settlement, with a part of the amount being waived off, many
banks report it as 'written-off' instead of loan account 'closed' while
submitting data to credit information companies like CIBIL.
They do it despite their code of commitment to customers clearly stating
that if the account of a borrower is regularised after having been in default,
the information would be passed on to the credit information company in the
subsequent monthly report.
This
is a serious issue as it has the potential to adversely affect the person's
credit rating for future loan applications. "We have been flooded with
such complaints. We advise the aggrieved borrowers to write to the bank's nodal
officer for correcting the situation.
If
the issue remains unresolved at this level for a period of 30 days, they can
consider approaching the Banking Ombudsman," says VN Kulkarni, chief
counsellor with the Bank of India-backed Abhay Credit Counselling Centre.
FAQ :Authorisation and
settlement of loans over phone
Ranjit Mehta, a 67-year-old pensioner, was offered a personal loan by
his credit card company and he accepted it - all over the phone and e-mail. No
documents, no agreements and no signatures. The trouble started once he closed
the loan after two years.
"When I called them up and told them that I wanted to clear the
loan, they were fine with it. They also told me that no interest would be
charged. Later, they demanded money on the grounds that the loan was not
foreclosed. They said I should have asked for foreclosure and paid a penalty of
3%."
"The most important terms and conditions applicable to a loan
product are mentioned in the sanction letter. In fact, it is obligatory on the
part of the bank to give a sanction letter and get an acknowledgement from the
applicant as a token of acceptance of the terms before disbursing the loan
amount," points out VN Kulkarni, chief counsellor with the Bank of
India-backed Abhay Credit Counselling Centre.
In the absence of a written agreement, seek clarification from the bank
and approach the Banking Ombudsman if the bank refuses to give you a fair
treatment. Better still, avoid accepting such loan offers over the phone.
FAQ: Who is the regulator of
housing loan
Replying
to a query on floating home loan rates in this column some weeks ago, Mr K directed
Mr S to approach NHB in case his loan provider (which was HDFC) does not comply
with the NHB circular dated October 19, 2011, pertaining to uniform floating
interest rate charged to new and existing customers.
I
have taken a loan from ING Vysya Bank in August 2009 and at present paying
12.5%, whereas a new customer is paying 11% (under similar conditions). I have
approached the bank and told them about the circular. The bank replied that it
was not under the purview of the NHB circular. Please advise.
The regulator for housing
finance NBFCs is NHB, hence the instructions are applicable only to such NBFCs.
In case of banks, RBI is the
regulator, and so far no such instruction has been issued by RBI to banks.
FAQ: Loans etc, - Adverse
reporting to CIBIL
The Banking Ombudsman report cites a resolved complaint where the bank
reported the borrower as 'defaulter' with CIBIL in spite of full and final
settlement.
As a result of the adverse CIBIL report, due to the bank's error, the
complainant could not obtain a home loan. Also, the bank did not respond to the
complainant's enquiries. Ultimately, the Banking Ombudsman instructed the bank
to rectify the mistake and compensate the customer.
Remember, banks, as per their own code of commitment, are under
obligation to update borrowers' records with credit information companies ( CIC)
as soon as possible.
The Code states that if the account of a borrower is regularised after
having been in default, the information will be passed on to the CICs in the
subsequent monthly report. Therefore, ensure that you don't back down if the
bank refuses to set your repayment record straight.
Finally, as is the case with all banking-related grievances, you can
always knock on the doors of the Banking Ombudsman if you feel your complaint
has not been addressed to your satisfaction.
II ATM
FAQ : Erroneous ATM
transaction
ATMs aren't god, even they can commit mistakes. One of the common grouse
against these magnificent machines which almost always give you the right
amount is about failed transactions. Often customers find that failed
withdrawals are often debited from their account.
In accordance with the directive from the Reserve Bank of India, banks
are required to reverse any erroneous debit made to an individual's account due
to failed ATM transaction within 12 days of receiving a complaint from the
account holder. If the bank fails to reverse the entry, it will have to offer
compensation of Rs 100 per day to the customer. The amount is to be credited to
the individual's account on the date of re-credit, even if he/she has not made
a claim for the compensation.
FAQ : Non-dispensation of
money from ATM
Complaints of account getting debited despite the ATM not dispensing the
cash are not rare. However, it can be a hassle when banks refuse to acknowledge
the error immediately. To deter banks from delaying reimbursing the customers,
the RBI has issued a series of directives regarding this matter.
Banks are required to pay a compensation of 100 per day to such
customers if the bank fails to resolve the issue within seven days of the
complaint being lodged. That is, provided you file the complaint within 30 days
of the incomplete transaction.
Note : Some failed ATM transactions automatically get credited back into the accounts of customers. These are the transactions that the ATM itself or the back-end server (called "Switch") mark as failed or unsuccessful. The Response Code printed on the Transaction Slip generated by the ATM for failed or unsuccessful transactions will be something other than "00" or "000". If any like "054" or " 072 " is printed, the system itself has marked the transaction as "failed". In such a case, even if your account has been debited, there is a good chance that the debit entry will be reversed. If "00" or "000" is printed on the Transaction Slip, the Switch and the ATM are telling you that the transaction was successful. "00" means no error.
III DOCUMENTATION
FAQ : Not releasing my papers
We
have been availing OD facility with a bank in Jaipur. On expiry of the facility
agreement in December 2011, we decided to switch over to another bank and
cleared the total outstanding with the first bank and wrote to them for
dropping the credit facility.
The first bank is not releasing our collateral securities/ title
deeds and is insisting verbally for payment of foreclosure charges/prepayment
charges @ 2% of the loan amount.
Amit Kasliwal
OD facility is a running
account facility and generally no prepayment penalty is prescribed. Having
informed the bank that you don't wish to continue and paid the entire dues, you
are no more liable to pay any further.
On the contrary, by not releasing your collateral securities /title
deeds, etc, the bank is violating para 8.11.1(k,l) of the code of banks'
commitment to customers. You may draw its attention to the rule and ask them to
release the title deeds.
Please take up the matter first with the branch and if there is no
resolution within a reasonable period, you may take it up with bank's nodal
officer, failing which you can take up
the matter with their head office/banking ombudsman.
IV CREDIT CARD
FAQ : Credit card swiped twice
I
made a purchase in December from the Reliance Fresh outlet in Navrangpura Ahmedabad. My Axis Bank Priority Gold Credit Card was swiped twice for
this single purchase, and double the sum was charged in January 2012. I am
unable to get redress from either Reliance Fresh or Axis Bank credit card help
centre. Please help.
By now you must have got your credit card statement.
If you find that the entry has been shown twice, you have every right to ask
the bank to give evidence for the second entry.
According to para 8.14.1 of code of banks commitment to customers, the
bank will give details upon asking. You can also ask the bank to furnish the
charge slip for the second transactions and if it has not been authorised, the
bank will reverse it.
If you do not get any reply to your letter within 15/30 days, you can
file a complaint with the Banking Ombudsman.
FAQ: Unsolicited cards
The Banking Ombudsman report mentions a complaint where a senior citizen
was upgraded to a 'platinum' card. The card holder had requested for the
literature to examine the offer, and the bank sent the platinum card along with
it.
Later, he was billed an amount of 5,510.83, presumably the joining fee.
Since he did not need the card, he requested the bank to cancel the same.
However, the bank continued to demand the outstanding on the platinum
card. After the Banking Ombudsman stepped in, the bank reversed the card fee as
well as other associate financial charges in addition to converting the
platinum card into a lifetime-free card and confirmed NIL outstanding on the
card.
Ombudsman Rules
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