Annual Report - Banking Codes and Standards …

1 Annual Report 2016-17. Banking Codes AND Standards . BOARD OF INDIA. PUBLISHED BY. Anand Aras Chief Executive Officer Banking Codes and Standards Board of India C-7, 4th Floor, Reserve Bank of India Building Bandra Kurla Complex Mumbai- 400051. Banking Codes and Standards Board of India Governing Council Chairman A C Mahajan Members C Krishnan Rama Bijapurkar Shubhalakshmi Panse Uday Phadke Anand Aras Chief Executive Officer Banking Codes and Standards Board of India Banking Codes and Standards Board of India Annual Report 2016-17.

2 Banking Codes AND Standards BOARD OF INDIA. Annual Report of the activities of BCSBI during the year 2016 - 17. Governing Council The present Governing Council was last reconstituted by RBI with effect from December 14, 2014 for a period of three years ending on December 13, 2017. During the year 2016- 17, Shri Nalin M Shah retired from the Governing Council on February 12, 2017 after completion of his tenure and was replaced by Shri Uday Phadke with effect from February 14, 2017. BCSBI places on record the invaluable services rendered by Shri Nalin M Shah.

3 The Governing Council which is vested with the powers of general superintendence, direction and control of the affairs and funds of BCSBI, held nine meetings during the year 2016-17. Several new ideas with regard to Code Monitoring Studies, Identification of Thrust Areas and drawing up of Annual Action Plan etc were discussed in the meetings and requisite resolutions passed. Membership During the year under review, two scheduled commercial banks (viz. Bandhan Bank Ltd and IDFC Bank Ltd) have been enrolled as members of BCSBI.

4 However, one Member viz. Commonwealth Bank of Australia closed their Indian operations from and sought cancellation of its membership. With these two additions and one deletion the total number of members stood at 135 as on March 31, 2017. During the year several Small Finance Banks and Payment Banks have evinced interest in becoming members of BCSBI. They have been advised of the procedural requirements for becoming members. BCSBI will continue its efforts to enlist eligible banks as members so that all bank customers benefit from the provisions of both the Bank's commitment to Customers and the MSE Codes .

5 During the year under review, an amount of lakh was collected from members towards their Annual membership fees. There were no arrears of membership fees. Names of member banks as on March 31, 2017 are listed in Annex I. Monitoring of Code Implementation and visits to bank branches to assess implementation of the Codes BCSBI, apart from its main task of preparing and periodically reviewing of Codes for customer service in banks also looks into the aspect of ongoing monitoring of implementation of the Codes by the member banks.

6 BCSBI has been monitoring the implementation of Code provisions by examining Annual Statement of Compliance (ASC) which itself is a self- certified statement submitted by banks covering status of implementation of some of the important provisions of the Codes . In addition to this, BCSBI has also adopted a system of conducting visits to select bank branches / processing centres to verify the position regarding ground level implementation of the Code of Bank's Commitment to Customers and the Code of Bank's Commitment to Micro and Small Enterprises (MSE) as a tool for on-site monitoring.

7 Such visits to branches for verification are confined to a sample of branches selected at random and are undertaken by authorized representatives of BCSBI, 1. Banking Codes and Standards Board of India Annual Report 2016-17. who record their observations in a structured questionnaire on important Code provisions. During such visits, BCSBI representatives also interact with a few customers of the bank branches and obtain their feedback. In the year 2016-17, BCSBI has carried out visits to a representative sample of 2733.

8 Branches of 51 select member banks at 87 centres including 20% branches from rural and semi-urban areas. The BCSBI representatives have also obtained feedback from 8485. customers during such visits. During this round of branch visits five select scheduled Urban Cooperative Banks were included for the first time. BCSBI Code Compliance Rating-2017: The outputs of branch visits and responses of customers were utilized as inputs for rating of banks on Code compliance. BCSBI has engaged the services of CRISIL for developing the Rating methodology and framework.

9 CRISIL analyses the data provided by BCSBI. within the laid down framework and assesses the Code compliance of banks by grouping the parameters covered in Branch Visit findings and Customer feedback into five main categories viz: Information dissemination (ID), Transparency (TR), Customer centricity (CC), Grievance redressal (GR) and Customer feedback (CF), and allocating them numerical weightages to arrive at a score out of 100. The aspects relating to complaints received by Banking Ombudsmen have been factored into Grievance redressal segment of above mentioned rating framework.

10 Based on the overall score achieved by a bank, a rating described as BCSBI Code Compliance Rating-2017 was awarded from out of four categories, viz., High', Above Average', Average' and Below Average' depicting the corresponding level of Code compliance of the bank. The scoring scale and overall position of rating of 46 banks, excluding five select scheduled Urban Cooperative Banks being included for the first time, in current round vis a- vis their position in 2014-15 is given in the following table: Scoring Scale Grade /Category Number of Banks and percentage 2014-15 2016-17.