The central bank’s deputy governor says there is no proof that regulation will help customers, reports Faisal Kidwai.
Customers should not remain stuck with a bank if it is not providing satisfactory services and should instead shop around, says a senior official of the Reserve Bank of India.
“Account portability has made moving accounts from one bank to another easy. Instead of depending on regulators, clients should exercise their own rights. If they are not happy with a bank then they should look for alternatives,” said Deputy Governor K C Chakrabarty at an 'Open House' organised by the Moneylife Foundation in Mumbai on Monday.
He also added that Indians should support the entry of new banks as more players mean more competition and that will translate into better customer service.
Talking about people getting ripped off by dubious schemes, the deputy governor said customers should be cautious about anybody promising high returns in quick time.
“If you don’t understand a financial service or if the scheme looks too good to be true, then don’t invest in it,” cautioned Chakrabarty.
Answering a question whether the banking services needed more regulation, he said it was over-regulation that
has harmed the country and there was no proof that more regulations will serve the customers.
Chakrabarty also said the Know Your Customer plan being implemented by banks will help apprehend swindlers and cheats as it would make tracing transactions easier. However, admitting that transactional errors could still occur, he said, "Our system is robust, though there may be laxity in finding out the error and taking corrective action."
As a large majority of India’s population does not even have a bank account, the deputy governor said the central bank was looking at ways to bring them into the fold.
Defending the RBI’s role, Chakrabarty said while many can claim that the central bank is a bad regulator, it is also true that very few depositors have lost their money.
Asked about the increase in cybercrime, he admitted that electronic transactions were not as secure as paper transactions. But those who have been victim of cybercrime can appeal to the authorities concerned, he added.
The deputy governor said those who want to name and shame defaulters, especially the big ones, should remember that it was up to the individual banks, not the RBI, whether to publicise names or not.
“Banks take privacy of customers seriously, plus we don’t want kidnappers and robbers to come after you, that is why banks do not reveal personal account details,” he signed off.