Reserve Bank of India (RBI) Governor Sanjay Malhotra has given a special advice to the banks. In this, he has said that avoid calling your customers repeatedly for KYC (Know Your Customer) documents.
According to PTI news, the RBI Governor said that we need to ensure that once the customer has submitted the documents to the financial institution, we do not insist on getting the same documents again. The Governor reminded of the competition in the industry and said that banks need to improve customer service, not only because it is their duty to do so, but also because it is in their own interest.
Calling repeatedly was described as an unavoidable inconvenience
According to the news, the governor clarified that submitting documents to a financial regulator’s overseeing entity makes it possible for other people to access them from the same database. He described repeated requests as an inevitable inconvenience. He regretted that most banks and NBFCs have not allowed their branches or offices to access information from the central database, due to which customers have to face inevitable inconvenience. This can be facilitated in advance. It will be in the interest of all.
Bank customers are constantly complaining
This comment from the central bank comes at a time when bank customers are complaining of inconvenience due to repeated requests to re-submit KYC. Such complaints are constantly coming on social media platforms. Malhotra warned banks against miscategorizing customer complaints. He said that doing so is a gross regulatory violation. He said that banks received 1 crore customer complaints in FY 2024 and if complaints against other regulated entities are included, this number will increase further. The governor said that 57 percent of these required mediation or intervention by the RBI Ombudsman. He said that you all will agree that this is a highly unsatisfactory situation and we need to pay immediate attention to it.
Banks need to improve their customer service
He advised the leadership of banks, from managing directors to branch managers, to take out time every week for grievance redressal. Malhotra said this is a must for all banks. He said if such issues are left unresolved, they can undermine consumer confidence and spoil the entire ecosystem. He emphasised that complaints should not be seen as a nuisance. It is important to avoid repeated complaints as they highlight systemic flaws.
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