Reserve Bank of India's Deputy Governor Swaminathan J has said that banks must ensure their employees understand that the primary responsibility is to serve a customers’ financial needs.
He further mentioned that banks should have a policy on customer appropriateness and product suitability framework to help reduce mis-selling.
“Being commercial entities, there’s nothing wrong in being target-driven, but regulated entities must ensure employees understand their primary responsibility is to serve customers’ financial needs", he said while speaking to top executives of major banks on customer grievances.
Swaminathan also stressed on having a clear and transparent incentive structure that rewards employees for delivering quality financial advice and services rather than just making sales.
While saying that Banks should treat Fintechs as an opportunity rather than a threat, he also mentioned that Banks should have adequate oversight whenever a product or service is offered in partnership with a fintech.
“I am glad that most of you have adopted such a collaborative approach, but please bear in mind the principal responsibility to your customers lies with you and not with partners. It is therefore essential to have adequate oversight when a product or service is being offered through such partnership channels", said Swaminathan
He listed out five key areas that require the complete focus of Banks. The areas include, the need for a customer-centric approach, addressing the root cause for complaints, importance of resolution at first point of contact, responsible handling of complaints and combating cybercrime.
He also warned the Banks against the practice of classifying certain complaints as queries and ignoring them.