Reserve Bank of India has taken an initiative regarding series of principles in context of Charter of Customer Rights. The norms will help in protecting the Bank customers by implying 5 basic principles. These are: 1) Right To Fair Treatment ; 2) Right To Transparent, Fair & Honest Dealing ; 3) Right To Suitability ; 4) Right To Privacy ; 5) Right To Grievance Redressal and Compensation.
The prime financial institution redirected and circulated guidelines as of September 28, 2006 and asked all the leading Non Banking Financial Companies (NBFC) to follow Fair Practices Code (FPC) which include general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method. All of it must adopt the policy regarding lending loans to various businesses. Prior to such policies, NBFC has led few guidelines in fields including gold jewellery loan as of March 26, 2012.
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RBI brought up policies giving advices to financial institutions either to bring modulation in Customer Right Policy or intact existing Customer Service Policies so as to integrate its Charter and its tenets with approval of Board accordingly. The respective banking firm further advised to keep on revising the policies and maintain it.
As per RBI norms the grievance redresses and its compensation comes under the category of Banking Ombudsman Scheme which includes 27 grounds of complaint order. The complaints is to be lodged in Ombudsman Bank regarding improper banking services. Most of the leading banks and financial institutions comes under its category such as Commercial Banks, Regional Rural Banks, Scheduled Primary Co-operative Banks, and so on.
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RBI has set up another autonomous body,Banking Codes and Standards Board of India (BCSBI) where Self Regulatory Organization will be adopted so as to improve the quality of customer services provided by Indian Banks. As of now, nil cases have been filed in measures to cheating by depositors within the last three years under the RBI regulatory body.
According to Jayant Sinha, Minister of State in Finance, reverted,RBI has issued guidelines on Fair Practices Code for Lenders. In terms of these guidelines the banks have been advised to frame the Fair Practices Code duly approved by their Board of Directors