The RBI panel has suggested a number of measures to minimize hardship to consumers, safeguard their interests and ensure that they are treated fairly. The measures include: extension of deposit insurance cover for balances held in prepaid instruments (wallets), checking of mis-selling by auditors, measures to facilitate release of pledged assets, completion of KYC updates without service interruption, facility for pensioners to submit. Their life certificate in any branch.
The committee report focused on recurring pain points faced by consumers. Many of these measures are related to the implementation of KYC (Know Your Customer) norms, which in their implementation have become a nuisance for consumers.
The RBI had constituted a seven-member committee headed by former Deputy Governor BP Kanungo in May 2022 after the Governor’s announcement on April 2022 monetary policy. The government’s decision to increase deposit insurance from Rs 1 lakh to Rs 5 lakh follows the recommendations of the previous committee on consumer service recommendations headed by former SEBI chief M Damodaran.
The panel said Banks Seamless account operations should be ensured between KYC updates. To make life easier for customers and bank employees, it has been recommended to create a centralized database of KYC documents.
Some customers are required to update their KYC frequently as the bank considers them ‘high risk’. The committee said banks should have careful risk classification for customers.
Several suggestions have been included for senior citizens who will be adversely affected by the banks’ move to discourage involvement in branches. The committee wants banks to allow relatives of senior citizens to pay in advance for door-step services used by senior citizens.
“Pensioners should be able to submit their Life Certificate (LC) at any branch of the bank where they maintain their pension account. Moreover, they should be allowed to submit LC in any month of their choice to avoid congestion in a particular month,” the report said. To combat digital fraud, it is recommended that an online facility be made available on the Indian Cyber Crime Reporting Portal to register complaints.