He was speaking at the inauguration of two-day national level seminar on ‘Customer Relationship Management (CRM) in Banking Industry’ organised by JSS College for Women (Autonomous) in the city on Tuesday.

Puranik said that a larger number of banks would foster greater competition and resulting in improving the qualities of service and reducing costs. More importantly, it would promote financial inclusion and support inclusive economic growth which is a key focus of public policy.

Explaining that Reserve Bank of India’s (RBI) is considering to provide licenses to a limited number of new banks, the move  will increase competition across the banking industry and develop a close and symbiotic relationship with customers, he said.

Increasing expectations

The customer expectations for quality service and value are increasing rapidly on a continuous basis due to the development of IT, internet and mobile phones, which are changing the possibilities in terms of customer contact and service.

Today many banks are meeting this expectation by adopting a strategy that is known as CRM, he said. Puranik said that CRM is a business strategy to learn more about the customers’ requirement in order to create long-term relationships with them. He said that CRM is a comprehensive approach that provides seamless integration of every aspect of bank business with customer at various stages such as marketing, service delivery and after-sales-service through integration of people, process and technology. He said that CRM provides banks with a clear picture of the business, facilitating decision making.

Describing the shortcomings of CRM, Puranik said that banks tend to focus more on products with cost of funds and return on investment in mind rather than on the customer. He said that various types of risks involved especially market risk, credit risk, counter party risk, may pose challenge to segregate customer on the basis of their net worth/ competence which may result in Non Performing Assets in the Banks.

Ombudsman

Subhashchandra Puranik said that the banking ombudsman scheme formulated by RBI enables faster and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. He said that one can file a complaint before the banking ombudsman if the reply is not received from the bank within a period of one month.