Mumbai:Swaminathan J, the Deputy Governor of the Reserve Bank of India (RBI), has urged banks to prioritize serving customers’ financial needs over meeting targets. Speaking to top executives from major banks regarding customer grievances, Swaminathan stressed the importance of establishing policies focused on customer appropriateness and product suitability to mitigate mis-selling practices.
He emphasized that while banks are commercial entities driven by targets, it is essential for regulated entities to ensure that their employees understand their primary responsibility lies in addressing customers’ financial requirements.
Swaminathan called for a transparent incentive structure that rewards employees for providing high-quality financial advice and services, rather than solely focusing on sales.
He highlighted the need for banks to exercise vigilant oversight when partnering with fintech companies, viewing such collaborations as opportunities rather than threats. Swaminathan underlined that ultimate responsibility for customers rests with the banks, necessitating thorough oversight when products or services are offered through such partnerships.
Swaminathan identified five key areas of focus for banks, including adopting a customer-centric approach, addressing the root causes of complaints, ensuring resolution at the first point of contact, handling complaints responsibly, and combatting cybercrime. He expressed concern over some banks categorizing certain complaints as queries, effectively overlooking the underlying issues. Swaminathan warned that RBI would take strong action against banks engaging in such practices to conceal the truth.
The Deputy Governor emphasized that bank employees must act responsibly and avoid misconduct.