Monthly Archives: December 2014

Thursday Trivia – 5 basic rights of bank customer

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Greetings to you from Circle Wealth Advisors…

Are you left with an experience of being forced by your bank to invest in an unsuitable product, or that bank is taking an unfair advantage of your data and giving it to tele callers? Most people wonder how to tackle this stop banks in getting into these unfair trade practices. Earlier this month the RBI released a Charter of Customer Rights specifying five basic rights that bank customers enjoy.

Although other grievance mechanism like Ombudsman exist, we feel that a direct intervention from the RBI is a more robust step and easier for customers to make use of it. In case a bank violates any right as laid down by the RBI, customers can approach the customer services division of the apex bank.

Here are the 5 rights as mentioned in the charter

 

  1. Right to fair treatment

This right prohibits banks from discriminating against customers on grounds of gender, age, religion, caste and physical ability while offering products and services. Banks can, however, continue to offer differential rates of interest or products to customers. “The financial services provider may, however, have certain special products which are specifically designed for members of a target market group or may use defensible, commercially acceptable economic rationale for discriminating between its customers,” the central bank had elaborated in the draft charter released in August.

 

  1. Right to transparency, fair and honest dealing

You can expect language in bank documents to be simplified and transparent. The charter requires banks to ensure that all contracts are transparent and easily understood by the common person. The onus of sending out effective communication will rest with banks. Information on the product’s price, customer’s responsibilities and key risks will have to be clearly disclosed. “Any features that may disadvantage the customer should be made known to him. Important terms and conditions should be clearly brought to the notice of the customer,” the charter says.

 

  1. Right to suitability

Despite several regulations, complaints related to mis-selling continue to plague the distribution space, particularly in case of life insurance policies. Lured by higher commissions, sales officials tend to push products without ascertaining their suitability for the customer. The charter has now made it mandatory for banks to sell products after keeping in mind customers’ needs, financial circumstances and understanding.

 

  1. Right to privacy

Banks are duty-bound to keep customers’ personal information confidential, unless the disclosure is required by law or customers have given their consent. “Customers have the right to protection from all kinds of communications, which infringe upon their privacy,” the charter states. Banks cannot pass on your details to telemarketing companies or for cross-selling.

 

  1. Right to grievance redressal and compensation

The right to grievance redressal is at your aid if your bank fails to adhere to basic norms. The charter makes banks accountable for their own products as well as those of third parties like insurance companies and fund houses. They will no longer be able to wash their hands of the responsibility once the product is sold. Banks will have to communicate the policy for compensating for mistakes on their part, lapses in conduct and non-performance or delays. The redressal and compensation policy will have to state the rights of customers when such events occur.

Happy Investing!!! 

Image courtesy – http://thefinancialbrand.com/

Thursday Trivia – Increase in RTGS business hours

Greetings to you from Circle Wealth Advisors…

The Reserve Bank of India has decided to increase the working hours to make online fund transfer through RTGS.

Currently, the RTGS service window for customer’s transactions is available to banks from 9.00 hours to 16.30 hours on week days and from 9.00 hours to 14:00 hours on Saturdays for settlement at the RBI end.

To promote electronic payments, the Reserve Bank today increased RTGS business hours to 12 hours from 8 am to 8 pm on weekdays, effective December 29.

On Saturdays, the RTGS (real time gross settlement) system of online fund transfer will be open from 8 am to 3.30 pm, the RBI said in a circular.

The new working hours will be with effect from December 29, 2014.

RTGS (Real Time Gross Settlement) is an electronic real-time fund transfer settlement individually, primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs 2 lakh with no upper limit.

Apart from the two payment systems of RTGS and NEFT, RBI has also introduced the revolutionary process of IMPS, click here to know more about it.

Happy Investing!!! 

THURSDAY TRIVIA – IMPS transfer money to anyone at anytime without internet

Greetings to you from Circle Wealth Advisors…

Interbank Mobile Payment Service or IMPS is a new banking service that offers an instant, 24X7, interbank electronic fund transfer service through mobile phones. IMPS facilitate customers to use mobile instruments as a channel for accessing their bank accounts and put interbank fund transfers in a secured manner with immediate confirmation features. It belongs to National Payments Corporation of India (NPCI), an umbrella organisation for all retail payment systems in India. Currently majority of interbank mobile fund transfer transactions are channelised through NEFT mechanism. Under NEFT, the transactions are processed and settled in batches, hence are not real time. Also, the transactions can be done only during the working hours of the RTGS system.

Hence this new system is revolutionary, as it provides complete flexibility. Currently 50 banks are already participating inIMPS facility. To see the list of these banks and to register yourself for IMPS please click here.

 

IMPS has several benefits, some of them are highlighted below

  • Instant interbank fund transfers – The key word here is instant, money is transferred in seconds
  • 24 x 7 x 365 availability – No other facility offers this kind of flexibility, can be used even on holidays
  • No more sharing of bank account details – makes transaction even more secure
  • Credit and debit confirmations to sender and receiver – helps stay updated
  • Saving Cost – transfer money for a charge as low as Rs2.50 (Vary from Bank to Bank)
  • No Internet Connection required – Transaction can be executed via SMS

 

To get started visit on the link provided above and generate a MMID (Money Mobile Identifier), from your bank.

To send the money following things are required

  • Mobile application or SMS details from your Bank
  • MMID number for your mobile (one MMID for multiple accounts)
  • Mpin issued by bank for transaction

 

To receive money all one needs is MMID number. This MMID number should be given to the person sending the money.

 

Please click here to watch a video by NCPI detailing the benefits of IMPS.

 

Please write back for more information

Happy Investing!!!