Reserve Bank of India Deputy Governor Swaminathan J has asked banks to follow KYC (know your customer) guidelines with “accuracy and empathy”.
Reserve Bank of India Deputy Governor Swaminathan J has asked banks to follow KYC (know your customer) guidelines with ‘accuracy and empathy’. He said that failure to do so will lead to regulatory action against them by the central bank. Addressing a conference of directors of private sector banks here on Monday, the deputy governor also expressed concern that in many cases the customer complaint mechanism, including the internal ombudsman framework, is treated more as a formality rather than a strong, effective resource.
He said the internal ombudsman mechanism should be more than just words on paper. It should work with the spirit and diligence required to resolve issues fairly and promptly. He said the bank’s board of directors should work towards creating a customer-centric bank where every person, regardless of age, income or background, feels valued and respected.
Customer-centric governance should be evident in every policy, process and service touchpoint. He said that this should be even more evident when it comes to treating your customers in a fair and transparent manner. Swaminathan said, “As I have said earlier, this is an area where we are focusing significantly to increase customer confidence in the system and we will not hesitate to take action if supervisory intervention is deemed necessary.
The deputy governor asked the board members of banks, particularly the chairman of the customer service committee, to ensure that KYC guidelines are followed with both accuracy and empathy. He said, “The Reserve Bank will not hesitate to take regulatory or supervisory action against institutions that fail to address these concerns in a timely and thoughtful manner.”
He further said that traditional governance responsibilities such as financial monitoring and risk management will remain top priorities, but going forward, the board of directors needs to embrace technology, pursue digital transformations, adopt a customer-centric approach and ensure ethical leadership.
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