Time to introduce Customer Service Ratio

Another Panel to improve Customer Service In banks
The Reserve Bank has appointed a Panel under the chairmanship of Mr. Damodaran, Former, SEBI, Chairman to improve the Customer Service in banks. In its Annual Policy for 2010-11, the Reserve Bank expressed its concern that ” The issue of ‘treating customers fairly’ is assuming critical importance as the experience shows that consumer’s interests are often not accorded full protection and properly attended to. Customer service in the banking industry is increasingly becoming important as banks are privileged institutions and banking is a special public utility service. The Reserve Bank and the Banking Ombudsman’s offices have been receiving several complaints regarding levying of excessive interest rates and charges on certain loans and advances.”
The present Committee will look into among other things the issue of services offered by banks to retail and small borrowers including pensioners, interest rates, bank fees and charges, the system of grievance redressal mechanism prevalent in banks , its structure and efficiency and suggest a mechanism for expeditious resolution of complaints..
The regulator has so much concern for customers, but unfortunately the service providers who earn their money and depend on customers have mastered the art of serving the customers who matter and ignore others conveniently although at a cost. The ingenuinity with which banks ignore the customers has to be experienced to believe. Unfortunately many who experience seldom takes the pains to escalate the complaints to appropriate forum as the efforts and time required are often unaffordable although results are generally favorable. Leave it and silently suffer have been followed faithfully as a fait accompli.
Competition will improve the service has all along been the expectation, but this has been belied as service is no way better in private Sector banks particularly the so called new generation banks compared to that of Public Sector Banks. The problems encountered by customers from new private sector banks are something different. They trap customers with variety of products other than banking products in bank branch premises and customers are forced to retain the products as otherwise they have to incur a heavy loss. Charges are never transparent and one comes to know only after the receipt of the formal document.
Service provided by the ATMS and internet banking are no doubt better as there is no personal inter action and machines do what they are programmed for. Again by chance MACHINES FAIL and an Inter-Action with HUMAN BEINGS become necessary to get a solution, and then one had it. All the joy enjoyed with the aid of machine vanishes the moment the machine fails. Then only contacts and influence will get one the solution early.
The approach of the committee should be to gather the nature of complaints reported and not reported. While information on reported complaints can be gathered from Consumer Forum,( District and National Forums), The Reserve bank, Banking Codes and Services Board Of India, Banking Ombudsman ,banks own head offices, Zonal/Regional Offices/ branches representing metropolitan, Semi-urban ,urban and Rural areas and Indian Banks Association, information on unreported complaints which are many fold than reported has to be obtained through surveys, incognito visits and personal interviews of all types of customers.
The committee has to identify innovative measures to forcefully change the attitude of human resources who provide the service. Introduction of incentives and disincentives in promotion, transfer, emoluments and bonuses linked to customer service will go a long way to change the mindset. The assessment of customer service has to be done independent of Reserve Bank annual inspection, but should reflect in Reserve Bank’s overall rating and should be made transparent for all customers of all banks to see. Perhaps a ratio akin to capital adequacy ratio reflective of Customer Service should be thought of to make bank and its human resources behave responsibly.
Change of mindset is the need of the hour. The message for employees should be “Do Not Ignore any Customer, Treat every Customer as the Bread Winner of the Bank and its employees and Know the Customer through Service”. The Committee’s task is not that easy.
Dr.T.V.Gopalakrishnan

(edited version of this appeared in Business Line Dt15/06/10).