Saturday 19 April 2014
News updated at 3:20 AM IST
Weather
Max: 35.4°C
Min : 22.5°C
In Bangalore
Sunny day

RBI to banks: End non-home branch fees

Mumbai, May 3, 2013, (PTI):

The Reserve Bank today asked lenders to stop differentiating between home-branch and non-home branch and pricing of services thereof, saying such a system should not continue with core banking solution (CBS) in place.

The apex bank also asked them to price retail loans fairly.

"It is observed that some banks are discriminating against their own customers on the basis of one branch being designated as the 'home branch' and other branches being referred to as 'non-home' branches where different charges are levied for the same products/services," the Central Bank said in its annual policy announcement.
The monetary authority further said with the CBS in place, "its expected that bank customers will be treated uniformly at any sales or service delivery point."


Bank customers should be treated "fairly and reasonably" sans any discrimination, it said, advising all the banks to stop the practice of charging customers for availing of basic services from non-home branches.

The RBI said it has observed "wide variations" in the rate of interest charged to retail borrowers even when the loan is sanctioned on the same day.

This was in spite of the introduction of the more transparent base rate regime in July 2010.

"The very wide variation in rates of interest charged by banks on retail loans to different borrowers on the same day cannot possibly be attributed to customers' risk profiles," it said, asking banks to take remedial action.
Lenders should have management oversight on such practices and should also frame policies to ensure that retail loan pricing is "transparent, realistic, and related to the risk perception of the borrowers," the RBI said. (MORE) PTI AA BEN DK TVS 05031611

@Body:
RBI-CUSTOMERS 2 LAST
Additionally, in more cheer for the customers, the Governor D Subbarao also asked the banks' umbrella body Indian Banks Association (IBA) to chart a way for the implementation of the M Damodaran committee recommendations.

The recommendations include benchmarking of service charges for basic banking services, zero liability for ATM/point-of-sale/internet banking transactions and doing away with differential interest rates for new and old customers.

It may be noted that the Damodaran panel report had in August 2011 made as many as 101 recommendations to improve customer service at banks and the regulator has already implemented a score of them.

Go to Top

Photo Gallery
Catholic devotees attend a Good Friday Mass inside at a church in New Delhi...

Catholic devotees attend a Good Friday Mass inside at a church in New Delhi...

Fire fighters trying to douse a fire that broke out at a shopping complex in Noida...

Fire fighters trying to douse a fire that broke out at a shopping complex in Noida...

SSB soldiers during the passing out parade of the 6th batch at Sashastra Seema Bal...

SSB soldiers during the passing out parade of the 6th batch at Sashastra Seema Bal...

A girl lights a candle on a graveyard of Central baptist Church's central graveyard...

A girl lights a candle on a graveyard of Central baptist Church's central graveyard...

Christian devotees take part in a 'Good Friday' procession in Jammu...

Christian devotees take part in a 'Good Friday' procession in Jammu...

A potter making earthen pots during summer season in Mirzapur on Friday. PTI Photo

A potter making earthen pots during summer season in Mirzapur on Friday. PTI Photo

Samajwadi Party workers attempt self-immolation with kerosene oil during a protest against ...

Samajwadi Party workers attempt self-immolation with kerosene oil during a protest against ...

Members of People for the Ethical Treatment of Animals (PETA), dressed as bloodied rabbits ...

Members of People for the Ethical Treatment of Animals (PETA), dressed as bloodied rabbits ...

Mutupallaku fesitval procession at Coonoor near Ooty on Friday. PTI Photo

Mutupallaku fesitval procession at Coonoor near Ooty on Friday. PTI Photo

A girl child kissing a statue of Jesus Christ on the occasion of Good Friday at The Sacred Heart...

A girl child kissing a statue of Jesus Christ on the occasion of Good Friday at The Sacred Heart...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523