A high level committee on services to bank clients suggesting radical changes in banking practices. The report of the commission headed by former Securities and Exchange Board of India (SEBI) chairman M Damodaran has been submitted to the Reserve Bank of India (RBI). Which was also posted on the central bank to obtain public comment prior to August 27.

The committee has suggested a common center toll-free number for all banks, the customer can call and then transferred to the bank.

On the side of the deposits, the group, who said the bank's customers are treated fairly, said all banks should offer simple savings accounts vanilla with special privileges, such as the ability to retain, ATM card auto, etc without prescribing a minimum balance.

The Committee said that the banks have offered products at prices that are bundled in such a way that served the best interests of the client. "And 'how to sell a flower or a bouquet of flowers or perhaps for the same price, regardless of the needs of the customer," the report said, while commenting that the majority of customers did not use any product.

If the account balance is a minimum requirement, criminal charges should be applied in relation to the deficit, the report said, adding banks must inform the customer immediately. In addition, all fixed deposit schemes offering different prices for different possessions should be addressed to produce an annual basis so that customers can make an informed decision.

It also suggests that banks will not automatically renew the deposit accounts without the written consent of the customer. The insurance coverage is proposed to increase the deposits of Rs 500 000 100 000 from the right side now.

The report fell heavily on banks, which charge customers to make transactions in non-home branches. To say such accusations are not justified, the committee said: "The routine services such as updates to the book, which are informative, should be made available to customers for free."

The report is also given a great relief for mortgage borrowers who are still paying higher prices, while new customers pay lower prices.

This practice was widespread in the last two years, when banks like State Bank of India (SBI), which offers lower rates to new customers while existing customers continued to pay more.

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"In a scenario of a variable interest rate, when a whole class of borrowers with the same characteristics and level of risk, the entry point in time (old and new customers) do not discriminate in the rates interest offered. In such cases, spread over the base rate does not vary when individual risk rating for the loan is absent, as is usually the case of loans, "he said.

Banks were asked not to impose criminal exorbitant rates of foreclosure of mortgages and to ensure that customers are not deprived of the benefit of lower rates offered by other financial institutions. The Committee said measures to stop the practice of discrimination between new and old customers with identical risk profiles, based on offers of interest shall also be initiated.

It is proposed to modify the authorization of all mortgage loans at fixed rates and variable rates, at least once in possession of the loan at a reasonable cost. Banks were asked to return the property of clients with a book contract within 15 days from the threat of closing the loan to the customer will be replaced.

Source: [Business Standard]