Press Esc to close

RBI to banks: End non-home branch fees

Mumbai, May 3, 2013, (PTI): 18:07 IST
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

More from this section
Most trending stories
Photo Gallery
Artists perform a folk dance during the inaugural ceremony of 48th edition of the IFFI...

Artists perform a folk dance during the inaugural ceremony of 48th edition of the IFFI...

Brides sit for a mass marriage ceremony organized for 12 Muslim couples at Mazgaon...

Brides sit for a mass marriage ceremony organized for 12 Muslim couples at Mazgaon...

Artists perform dance on the occasion of Haryana State Day...

Artists perform dance on the occasion of Haryana State Day...

A farmer pulls a cart rickshaw carrying cauliflower vegetables....

A farmer pulls a cart rickshaw carrying cauliflower vegetables....

Mohd Shami celebrats after after dismissing Sri Lankan captain Dinesh Chandimal...

Mohd Shami celebrats after after dismissing Sri Lankan captain Dinesh Chandimal...

Four lakhs of laddoos being prepared for 31st anniversary celebrations of Sai Baba Temple....

Four lakhs of laddoos being prepared for 31st anniversary celebrations of Sai Baba Temple....

Shah Rukh Khan performs during the inaugural ceremony of 48th edition of the IFFI...

Shah Rukh Khan performs during the inaugural ceremony of 48th edition of the IFFI...

Rahul Gandhi consoles Dipa, the wife of Congress leader Priya Ranjan Dasmunsi....

Rahul Gandhi consoles Dipa, the wife of Congress leader Priya Ranjan Dasmunsi....

Aishwarya Rai Bachchan with her daughter Aaradhya during a charity event...

Aishwarya Rai Bachchan with her daughter Aaradhya during a charity event...

Deepika Padukone with child artists at the promotion of film Padmavati...

Deepika Padukone with child artists at the promotion of film Padmavati...

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.