Indian Reserve Bank of India Deputy Governor Swaminathan Janakiraman has asked banks to follow KYC rules with 'accuracy and compassion'. He said that if they do not do so, regulatory action will be taken against them by the Central Bank. Addressing a conference of directors of private banks on Monday, the Deputy Governor also expressed concern that in many cases, customer complaint mechanisms, including the internal ombudsman framework, are treated more as a formality rather than a robust, effective resource. He said that the internal Lokpal mechanism should be more than words written on paper. It should work with the necessary spirit and diligence to resolve issues impartially and as quickly as possible.
Directors advised to work towards creating a customer-centric bank
The Deputy Governor said that the Bank's Board of Directors should work towards creating a customer-centric bank where every individual, irrespective of his/her age, income or background, feels valued and respected. Customer-centric governance should be evident in every policy, process and service touchpoint. He said that this should be even more straightforward when it comes to dealing with its customers in a fair and transparent manner.
Reserve Bank of India will not hesitate to take action
“As I have said earlier, this is an area where we are significantly focused on enhancing customer confidence in the system and we will not hesitate to take action if supervisory intervention is deemed necessary,” Swaminathan said. The Deputy Governor asked the board members of banks, especially the chairperson of the customer service committee, to ensure that the KYC guidelines are followed with both accuracy and compassion.
Financial monitoring and risk management will remain top priorities
“The Reserve Bank will not hesitate to take regulatory or supervisory action against institutions that fail to address these concerns in a timely and thoughtful manner,” he said, adding that traditional financial surveillance and risk management measures would be necessary. Governance responsibilities will remain top priorities, but moving forward, boards of directors need to embrace technology, drive digital transformations, adopt a customer-centric approach and ensure ethical leadership.
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