New Guideline for banks’ customer service

AT a recent conference of Banking Ombudsman held in RBI, it was decided, among others, that:-

  • Banks should issue tax deduction at source (TDS) certificates duly completed in all respects to the account holders and despatch it to their mailing address.
  • In case of ATM/Internet based banking transactions, in the event of any monetary dispute involving the customer and the bank, the onus should be on the bank to prove the customer’s negligence or mistake. Customer must be compensated for the losses arising out of customers’ non-authorised transactions.
  • Banks must not recover pre-payment charges in floating rate loans.
  • The Reserve Bank/IBA would examine the issues pertaining to monetary compensation for mental harassment suffered by bank customers.
  • To create awareness about the Banking Ombudsman Scheme, the Banking Ombudsmen will annually share with local media, information regarding complaints received and resolved, including important cases and awards given.

RBI Governor Subba Rao said that often, prevention was better than cure. In customer service area too, rendering good customer service was like ‘prevention’ and was better than the ‘cure’ which was the various grievances redressal mechanisms. He flagged various issues relating to banks’ customer service for the consideration of the participants. He asked whether customer service was a criterion in evaluating the performance of a branch level official or did levying of penalty on a bank reflected in any manner on the staff which caused the levy of penalty; do all banks have customer grievances redressal officer and at what level; were the most important terms and conditions (MITC) explained to the bank customers before they signed the documents; and whether the deviation from most important terms and conditions of a banking product transparent. He urged bankers to identify ten action points to further improve their customer service.

  • Nice article Mukesh. It’d be great if you can write an article on taxation for online businesses in India, especially online publishing businesses like blogs that make money through advertising. Do they need to keep specific things in mind when it comes to taxation? 

    Also, in the same article, please throw some clarity on taxation of digital goods in India. For example, if I were to sell an ebook to an audience in India and worldwide through my site then apart from the general income tax that I’d have to pay as a sole proprietor or whatever my business status may be, will there be a sales tax or VAT that I require to pay? Are digital goods like ebooks, software etc taxable through VAT? 

    If a freelancer, who writes online and makes money, or provides services like design, coding help etc to other people online and makes money through that, is he liable to pay service tax?

    It’d be nice if you can write a detailed article on the above queries. In the past few years, India has seen a huge growth in online startups and publications. There are a number of people who work from home and make substantial amount of money through their online properties like websites, or by selling digital goods online or by freelancing and providing their services. So it also becomes important that they know the right way to structure their business and know the rules of tax that apply to them.