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Foreign banks score over PSBs in code compliance; overall rating dips

Drop in overall BCSBI ratings on banks’ compliance to the banking code shows that they need to pull up their socks
By Preeti Kulkarni | June 14, 2017

Indian banks’ overall score on compliance to the banking code of commitment to customers has slipped to 77 in 2017 from 78 in 2015, a nationwide survey conducted by the Banking Codes and Standards Board of India (BCSBI) has found.

BCSBI is the quasi-regulatory arm of the Reserve Bank of India in charge of devising the code as well as getting banks to adhere to it. The survey, carried out in association with ratings agency CRISIL, polled nearly 8,500 customers of 51 public sector (PSB), private, foreign and urban co-operative banks. It rated banks on four parameters - information dissemination, transparency, customer centricity and grievance redressal – culled from the code, which has been voluntarily adopted by all banks.

As per the report, 12 banks – eight private sector banks, three foreign and one PSB – secured a ‘High’ rating, down from 13 in the last edition. While 29 made it to the above average category, the number of banks in the ‘Average’ category remained stagnant at ten.

“Not only have overall average scores fallen, some banks have been downgraded too,” noted AC Mahajan, chairman, BCSBI, stressing on the need for banks that have been downgraded or placed in the average category to pay attention to monitoring Code Compliance at the branches. “Although foreign banks have managed to score well in most of the categories, grievance redressal by foreign and private banks could improve, particularly with regard to grievance redressal mechanism,” he added.

BCSBI is in the process of meeting bank heads to discuss their performance. “Some banks have approached us for clarifications and we are sharing the detailed information collected by us with them,” said Anand Aras, CEO, BCSBI. Individual ratings of all banks that were surveyed as part of the exercise are available on BCSBI’s website (www.bcsbi.org.in). Also in the offing is code revision, which will come into effect from January next year.

 

preeti.kulkarni@outlookindia.com

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