Banking Regulations Quiz

Questions and Answers

Who serves as the Appellate Authority under the Scheme?

The Executive Director-in charge of Consumer Education and Protection Department (correct)

The Deputy Ombudsman

The Chief Financial Officer of RBI

The Governor of the Reserve Bank of India

Which of the following methods is NOT mentioned for filing a complaint?

Via social media channels (correct)

By sending a physical letter to RBI

Through a dedicated e-mail

Online through the CMS portal

What is the toll-free number for the Contact Centre of RBI?

0800-123-4567

1800-123-4567

9999-000-000

14448 (correct)

For how long can an Ombudsman or Deputy Ombudsman be appointed at a time?

Three years Signup and view all the answers

How many locations across India currently have offices of RBI Ombudsmen?

22 Signup and view all the answers

What types of languages can the Contact Centre currently provide assistance in?

Hindi, English, and 8 regional languages Signup and view all the answers

Is there a requirement for complainants to contact any specified ORBIO for filing a complaint under the RB-IOS, 2021?

No, complaints can be lodged directly online Signup and view all the answers

What is the primary function of the Ombudsman as established by the RBI?

To carry out functions under the Scheme for grievance redress Signup and view all the answers

What is the maximum time frame within which dishonoured instruments must be returned to the customer?

24 hours Signup and view all the answers

What information must be reported to the controlling office regarding dishonoured cheques?

Data on cheques amounting to ₹ 1 crore and above Signup and view all the answers

What condition is imposed by banks on accounts with cheque facilities concerning dishonoured cheques?

No new cheque book will be issued after four dishonours. Signup and view all the answers

In which situation might a bank consider closing a current account?

If there are frequent dishonoured cheques Signup and view all the answers

What is the maximum amount for which collecting banks can consider collecting account payee cheques drawn for customers who are co-operative credit societies?

₹ 50,000 Signup and view all the answers

Who is prohibited from collecting account payee cheques?

Third parties not named as payees Signup and view all the answers

What authority needs to review the continuance of credit facilities related to advances accounts?

Appropriate authority higher than the sanctioning authority Signup and view all the answers

What is the guiding principle behind banks' collection of account payee cheques for cooperative credit societies?

To mitigate difficulties in collecting cheques Signup and view all the answers

What is the primary purpose of recovering the cost of redress from banks?

To encourage banks to handle complaints efficiently Signup and view all the answers

What parameters are used to compute the peer group average for banks?

Average number of complaints per branch, complaints per 1,000 accounts, and digital complaints per 1,000 transactions Signup and view all the answers

If a bank exceeds the average number of maintainable complaints in all three parameters, what is the cost recovery they will face?

100% of the total complaint costs Signup and view all the answers

Which type of complaints remains cost-free for customers under the Banking Ombudsman Scheme?

Grievance redress under the Banking Ombudsman Scheme Signup and view all the answers

What percentage of costs is recovered from a bank if it exceeds the peer group average in two complaint parameters?

60% of the costs in the higher excessive parameter Signup and view all the answers

How will the costs be calculated for the banks that exceed the average complaints?

Average cost of handling a complaint at the OBO during the year Signup and view all the answers

Which of the following would NOT be a criterion for assessing bank complaints under the scheme?

Customers' feedback ratings Signup and view all the answers

What happens when a bank has excess complaints in one parameter only?

They pay 30% of the redress costs for the excess complaints Signup and view all the answers

What is the requirement for banks regarding cheques dated in Hindi as per the National Calendar?

They should be accepted if they have the correct date in Gregorian format. Signup and view all the answers

What type of cheques are CBS enabled banks advised to issue?

Payable at par or multi-city CTS 2010 Standard cheques. Signup and view all the answers

What should banks include in a term deposit receipt?

Full details such as date of issue, period of deposit, and applicable rate of interest. Signup and view all the answers

What should a bank do regarding the disposal of deposits on maturity?

Obtain advance instructions from depositors for disposal. Signup and view all the answers

Under what condition can banks disallow premature withdrawal of term deposits?

In the case of bulk deposits of all depositors. Signup and view all the answers

What must banks do regarding policies on premature withdrawal?

Notify depositors of the policy at the time of accepting deposits. Signup and view all the answers

What is the stance of banks regarding the issuance of CTS-2010 standard cheques to new customers?

Banks should not charge savings bank account customers for the first issuance. Signup and view all the answers

What does the term 'freely transferable' in relation to term deposits imply?

Depositors may transfer their deposit from one bank office to another without restrictions. Signup and view all the answers

What is the maximum penalty that can be imposed for a false advertisement after multiple contraventions?

Fifty lakh rupees Signup and view all the answers

Which activity is NOT mentioned regarding the responsibilities related to consumer rights?

Create consumer loyalty programs Signup and view all the answers

How long can an endorser be prohibited from making endorsements for a second contravention of a misleading advertisement?

Three years Signup and view all the answers

What measures can be recommended by the authority regarding international practices?

Adopt international covenants and best practices Signup and view all the answers

Which of the following is a safeguard for consumers mentioned in the content?

Issuing safety notices for hazardous goods Signup and view all the answers

If an advertisement is found to be misleading, what initial action may the Central Authority take?

Discontinue or modify the advertisement Signup and view all the answers

What is the objective of promoting NGOs to cooperate with consumer protection agencies?

To enhance consumer protection efforts Signup and view all the answers

What is the purpose of reviewing matters related to consumer rights?

To identify factors that inhibit enjoyment of consumer rights Signup and view all the answers

What is the primary purpose of appointing Quality Assurance Officers in banks?

To translate policy intent into actionable procedures Signup and view all the answers

Which training method is mentioned for staff development in banks?

Video conferencing and job cards Signup and view all the answers

What initiative involves periodic meetings with different customer cross-sections to improve service?

Customer relation programmes Signup and view all the answers

What is the role of the Customer Service Committee of the Board in banks?

To formulate and assess service policies Signup and view all the answers

How do banks recognize the best branches in terms of customer service?

With annual awards or running shields Signup and view all the answers

What is one of the responsibilities of senior officials visiting branches?

To study service quality on-site Signup and view all the answers

What is a key element of the approval process for new products and services in banks?

Board approval, especially for customer rights issues Signup and view all the answers

What kind of audits and surveys are indicated to assess customer service in banks?

Customer service audits and customer surveys Signup and view all the answers

What is a key feature that banks should implement for customer service improvement in branches?

Providing adequate space and facilities. Signup and view all the answers

Why is it important for banks to have displays in multiple languages?

To ensure effective communication with local customers. Signup and view all the answers

What role do roving officials serve in a bank branch?

To assist customers and improve employee responsiveness. Signup and view all the answers

What should a bank provide customers to help them understand available services?

Booklets detailing services and facilities. Signup and view all the answers

What aspect of security should banks focus on to enhance customer confidence?

Reviewing and improving the existing security system. Signup and view all the answers

In what way should banks ensure their systems are aligned with customer service?

By conducting customer satisfaction surveys periodically. Signup and view all the answers

How should banks approach transactions with customers speaking different languages?

By using Hindi and regional languages in business transactions. Signup and view all the answers

What type of counter should larger bank branches provide to enhance customer experience?

A separate inquiry counter. Signup and view all the answers

What is the time frame within which an appeal must be filed against an order made by the State Commission?

Thirty days Signup and view all the answers

What percentage of the awarded amount must be deposited when filing an appeal to the National Commission?

Fifty per cent Signup and view all the answers

What is the maximum period within which an appeal is expected to be disposed of after its admission?

Ninety days Signup and view all the answers

What is required for banks to ensure that their policies are accessible to the public?

Give wide publicity and display policies prominently. Signup and view all the answers

What is the minimum number of members required to be part of the National Commission, including the President?

Four Signup and view all the answers

Where does the National Commission primarily function?

In the capital city of the country Signup and view all the answers

Which languages should banks include in printed materials for retail customers?

English, Hindi, and the concerned Regional Language. Signup and view all the answers

How should banks refer to transgender individuals in their documentation?

As 'third gender' in all forms/applications. Signup and view all the answers

Which committee focused on customer service established in 1975?

Talwar Committee. Signup and view all the answers

Why are banks advised to include policies in trilingual form?

To ensure wider accessibility for diverse populations. Signup and view all the answers

What role does the Committee for Review of Customer Service Standards support?

Review customer service practices in RBI regulated entities. Signup and view all the answers

What is the main purpose behind establishing customer compensation policies in banks?

To enhance trust and satisfaction among customers. Signup and view all the answers

Which of the following is NOT a type of policy banks should have?

Investment Strategy Policy. Signup and view all the answers

What is the primary role of the Chief Customer Service Officer (CCSO) in a bank?

Resolving customer complaints efficiently Signup and view all the answers

Which provision must banks implement for senior citizens regarding cheque books?

Physical presence is not required to get cheque books Signup and view all the answers

What feature of customer service training is recommended for bank employees?

Sessions on customer service and public relations Signup and view all the answers

What condition is imposed on senior citizen accounts in terms of KYC compliance?

They automatically convert to Senior Citizen Accounts when KYC compliant Signup and view all the answers

What is one of the required mechanisms for banks concerning life certificates submitted by pensioners?

Any branch must immediately update the life certificate in CBS Signup and view all the answers

Who should not have worked in the bank where they are appointed as Chief Customer Service Officer?

The Chief Customer Service Officer Signup and view all the answers

What is the purpose of appointing Public Relations Officers at bank branches with many complaints?

To address and mitigate customer grievances Signup and view all the answers

Which of the following describes the service feature for differently abled persons in banks?

Dedicated counters for better assistance Signup and view all the answers

What is the consequence of not restoring the minimum balance within one month?

Penal charges will be applied Signup and view all the answers

How are the penal charges determined for insufficient minimum balance?

As a fixed percentage of the shortfall amount Signup and view all the answers

What should banks ensure regarding customer account balances when applying penal charges?

Charging fees must not lead to a negative account balance Signup and view all the answers

What is the protocol for banks issuing passbooks to savings account holders?

Passbooks should be offered to all savings account holders Signup and view all the answers

What action should employees take regarding the updating of passbooks?

Encourage customers to update their passbooks regularly Signup and view all the answers

What should be provided if a passbook is held back for updating due to a large number of entries?

A token indicating its receipt and pickup date Signup and view all the answers

What should a bank advise customers who tender a passbook after a long time for posting?

To tender their passbooks periodically Signup and view all the answers

What should banks avoid in relation to fees and charges for account statements?

Imposing unnecessary charges for passbooks Signup and view all the answers

What is the minimum balance maintenance policy that banks must clearly communicate to their customers at account opening?

Customers must be informed about the penalties for not maintaining minimum balance upfront. Signup and view all the answers

What should banks do if there is a change in the prescribed minimum balance for existing account holders?

Inform account holders at least one month in advance. Signup and view all the answers

What is a requirement for obtaining photographs from account holders?

Photographs of account holders are needed for all types of accounts without exception. Signup and view all the answers

What precaution must banks take regarding cash withdrawals for 'self' or 'bearer' cheques?

Pay these cheques while observing usual precautions. Signup and view all the answers

When can banks levy penal charges for non-maintenance of minimum balances across inoperative accounts?

Banks must refrain from levying penal charges on inoperative accounts. Signup and view all the answers

What should banks do in the event of default in the maintenance of the agreed minimum balance?

Notify the customer clearly by SMS, email, or letter. Signup and view all the answers

What is the stance of banks regarding obtaining fresh photographs when an additional account is opened?

Only one set of photographs is sufficient for all accounts. Signup and view all the answers

What is advised regarding the collection of photographs of 'Pardanishin' women?

Banks must specially obtain photographs of 'Pardanishin' women. Signup and view all the answers

What is the purpose of sending alerts to customers when their Credit Information Report is accessed?

To notify customers about potential fraud concerning their credit information. Signup and view all the answers

What function does the nodal point/official serve in Credit Institutions?

They are the main point of contact for customer grievance redressal. Signup and view all the answers

Which of the following describes the alert mechanism employed by Credit Information Companies?

Alerts are generated only for inquiries that appear on the customer's Credit Information Report. Signup and view all the answers

What is one key responsibility of Credit Information Companies under the outlined framework?

To ensure timely communication about any updates to credit information to customers. Signup and view all the answers

What does the term 'Days Past Due' relate to in the context of Credit Institutions?

It indicates the number of days a customer is late in making payments on existing credit facilities. Signup and view all the answers

What is the definitive time frame within which an appeal against an order made by the National Commission must be filed with the Supreme Court?

Thirty days Signup and view all the answers

Under what condition can a District Commission, State Commission, or National Commission accept a complaint after the two-year limitation period?

The complainant provides a sufficient cause for delay Signup and view all the answers

How must every order made by a District, State, or National Commission be enforced?

In the manner of a court decree Signup and view all the answers

What percentage of the awarded amount must be deposited when appealing to the Supreme Court?

50% Signup and view all the answers

Which provision is applied in enforcing orders made by the commissions as outlined?

Order XXI of the First Schedule to the Code of Civil Procedure, 1908 Signup and view all the answers

How long does the District Commission have to decide on the admissibility of a complaint?

Twenty-one days Signup and view all the answers

What is the time frame given for parties to respond to mediation consent after it's directed by the District Commission?

Five days Signup and view all the answers

After a complaint is admitted, how long does the District Commission have to refer the complaint to the opposite party?

Twenty-one days Signup and view all the answers

What is the maximum extended period allowed for the opposite party to respond to the complaint?

Fifteen days Signup and view all the answers

What is the timeline within which a laboratory must report findings to the District Commission after receiving a sample?

Forty-five days Signup and view all the answers

What happens if the District Commission does not decide the admissibility of the complaint within the specified period?

The complaint is deemed admitted Signup and view all the answers

When does the District Commission refer a matter for mediation?

When a settlement seems acceptable to both parties Signup and view all the answers

What is required before the District Commission can send a sample to the laboratory for analysis?

Admission of the complaint Signup and view all the answers

Study Notes

Banking Regulations and Policies

Banks must return dishonoured instruments to customers within 24 hours, following the Goiporia Committee recommendation.
Cheques dishonoured for amounts of ₹ 1 crore and above should be included in the bank’s Management Information System (MIS).
If a customer's cheque for ₹ 1 crore or more is dishonoured four times within a financial year due to insufficient funds, the bank may not issue a new cheque book and may consider closing the current account.
For credit accounts like cash credit and overdraft, a review of the necessity for cheque facilities must be conducted by higher authorities.

Collection of Account Payee Cheques

Banks are prohibited from collecting account payee cheques for anyone other than the payee.
To assist co-operative credit societies, banks may collect account payee cheques up to ₹ 50,000 for their customers if the payees are constituents of those societies.

Complaint Redressal and Recovery Costs

Under the Banking Ombudsman Scheme, 2006, banks currently handle complaints at no cost to customers.
Banks with complaints exceeding their peer group average will incur recovery costs based on complaint metrics relative to their peers, including branch and account averages.
Complaints can be filed online or via email to the Reserve Bank of India’s Centralised Receipt and Processing Centre.

Instruments and Cheques Validity

Instruments written in Hindi according to the Saka Samvat calendar are valid; banks must accept these if in proper order.
CTS 2010 standard cheques must be issued by all Core Banking System (CBS) enabled banks without fees for initial issuance.

Term Deposit Accounts Management

Banks must issue detailed term deposit receipts including the date of issue, maturity period, due date, and interest rate.
Depositors should provide instructions for deposit disposal at maturity; banks must give advance notifications if not received.
Banks may disallow premature withdrawal for bulk deposits and determine their penal interest rates beforehand.

Ombudsman Structure and Functions

The Reserve Bank appoints Ombudsmen for up to three years to manage grievances.
Ombudsmen are stationed across 22 locations in India and are not restricted to specific offices for receiving complaints.
Complaints lodged online are allocated automatically for redressal.

Consumer Rights and Safeguards

The Ombudsman can intervene in proceedings at different commission levels and recommend protective measures for consumer rights.
International best practices and research in consumer rights are promoted through awareness and collaboration with NGOs.
False advertisements may lead to penalties up to ₹ 10 lakh, escalating to ₹ 50 lakh for repeated offenses, along with potential bans on endorsers for up to three years.

Importance of Customer Service in Banking

Key committees like Talwar, Goiporia, and Tarapore focus on enhancing customer service in the banking sector.
Banks must periodically assess their systems and their effects on customer service.

Policy for Branch Management

Implement infrastructure improvements, prioritizing accessibility for pensioners, senior citizens, and disabled persons.
Establish separate inquiry counters at larger branches alongside regular reception counters.
Use multilingual indicator boards for clear communication, including English, Hindi, and regional languages.
Roving officials should assist customers with transactions.
Distribute informative booklets about services in multiple languages to customers.
Enhance security measures to build trust with customers and staff.
Employees must wear identification badges displaying their photo and name.
Regular job rotation and training initiatives focused on customer service for staff.

Customer Service Strategy

Senior officials need to visit branches for evaluations of service quality.
Reward branches excelling in customer service annually.
Conduct audits and customer surveys to gauge satisfaction levels.
Regular customer relation programs to foster feedback and improvement.
Policies like Deposit Policy, Cheque Collection Policy, and Grievance Redressal must be communicated effectively to customers.

Inclusivity and Accessibility

All printed materials, like account forms and passbooks, should be available in a trilingual format (English, Hindi, and regional language).
Recognize the rights of transgender individuals, including 'third gender' options in all banking forms.

RBI Customer Service Reviews

Committees formed by the RBI have historically aimed to improve customer service standards.
Public Relations Officers may be appointed at branches with higher complaint rates to enhance customer relations.
Appointment of Chief Customer Service Officers (CCSO) to specifically manage complaint resolutions, ensuring they have no prior affiliation with the bank.

Guidelines for Senior Citizens

Dedicated service counters for senior citizens and differently-abled persons should be established.
Life Certificates submitted in any branch must be promptly updated in the system to prevent pension delays.
No physical presence should be required for senior citizens to obtain cheque books.
Fully KYC-compliant accounts should automatically transition to Senior Citizen Accounts based on age.

Appeal Process for Consumer Disputes

Appeals against State Commission orders can be filed with the National Commission within thirty days.
A deposit of fifty percent of the awarded amount is required to file an appeal.
Appeals should be expedited, ideally resolved within ninety days of admission.

Structure of the National Commission

The National Commission operates mainly from the National Capital Region and may conduct meetings elsewhere as designated by the Central Government.
It includes a President and four to additional members, with qualifications and procedures established by the Government.

Account Opening and Photograph Requirements

Photographs are required for all individuals authorized to operate Savings Bank and Current Accounts, except staff accounts.
Banks must obtain photographs of 'Pardanishin' women; photocopies of identity documents are not sufficient.
Only one set of photographs is necessary regardless of the number of accounts or categories of deposit.

Cash Withdrawals and Cheque Payments

Banks should not generally require the account holder's presence for cash withdrawals using 'self' or 'bearer' cheques unless deemed necessary.
Precautions should be taken when processing 'self' or 'bearer' cheques.

Minimum Balance Regulations

Transparency is required at account opening regarding minimum balance requirements and potential charges.
Customers must receive one month's notice of any changes in minimum balance requirements or associated charges.
Since May 6, 2014, banks cannot impose penal charges for non-maintenance of minimum balances in inoperative accounts.
Customers must be notified via SMS/email/letter if minimum balance is not restored within a month, leading to potential penal charges.
Penal charges should relate directly to the extent of the shortfall, employing a suitable slab structure for recovery.

Passbook Issuance for Savings Accounts

Banks are mandated to provide passbook facilities for all individual savings account holders.
If account statements are opted for, monthly statements must be issued without charge.
Customers should be encouraged to update passbooks regularly; paper tokens should be provided when passbooks are held back for updating.

Customer Service and Grievance Redressal

Credit Information Companies (CICs) are required to alert customers via SMS/email when their Credit Information Report (CIR) is accessed or updated.
Credit Institutions (CIs) must have a designated official for addressing customer grievances.

Complaint Admission and Mediation Process

Complaints in District Commissions must be decided on admissibility within twenty-one days; if not, they are deemed admitted.
Mediation can be initiated at the District Commission’s discretion; parties must consent in writing within five days.
On admission and failing mediation, complaints must be processed efficiently, with timelines for responses established.

Complaint Disposal

Complaints related to goods should be addressed by sending a copy to the opposite party, who must respond within thirty days.
If analysis is required, samples must be sent to the appropriate laboratory, which has forty-five days to report back.

Appeals and Limitations

Appeals against National Commission orders can be filed with the Supreme Court within thirty days, requiring a 50% deposit of the awarded amount.
Complaints must be filed within two years from the cause of action's date but can be entertained later if justified.

Enforcement of Orders

Orders issued by District, State, or National Commissions are enforceable like court decrees, following civil procedure standards.

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Description

Test your knowledge on the Goiporia Committee recommendations regarding dishonoured instruments. This quiz covers the requirements banks must follow, including timely return of instruments and reporting procedures for large cheques. Enhance your understanding of banking regulations and operational compliance.