JAIIB · PPB · Chapter 17
Customer Service Guidelines
RBI's complete framework for customer service in banks — institutional setup, Board-approved policies, ATM rules, liability limits, and special provisions.
1. Organisational Framework for Customer Service
RBI requires each bank to have four institutional bodies dedicated to customer service oversight. The Board reviews customer service via a detailed memorandum once every six months.
Mnemonic — CSSN ("Customer Service Starts Now")
Customer Service Committee of the Board · Standing Committee on Customer Service · Sub-branch (Branch Level) Committees · Nodal Department/Official
| Body | Level | Key Facts |
|---|---|---|
| Customer Service Committee of the Board (CSSB) | Board | Experts + customer reps as invitees; formulates policies; reviews compliance; proactive role re Banking Ombudsmen complaints |
| Standing Committee on Customer Service | Executive | Chaired by CMD or ED; includes non-official members for independent feedback; monitors RBI compliance; bridge between departments and CSSB; recommended by CPPAPS |
| Branch Level Customer Service Committees | Branch | Formal channel: customers ↔ bank; must include at least one senior citizen; meets at least monthly; sends quarterly reports to Standing Committee |
| Nodal Department / Official | HO + each controlling office | First point of contact for grievances; liaison with Banking Ombudsman and RBI |
Exam Trap
MCQ 1 asks: "Banks are required to have a customer service committee at every ___." Answer is (a) branch — the Branch Level Customer Service Committee is mandatory at all branches. Do not confuse with the CSSB (Board level) or Standing Committee (executive level).
2. Board-Approved Policies on Customer Service
Four policies must be Board-approved, displayed on the website and branch notice board, and communicated to customers when the relationship begins and when changes occur.
1 · Comprehensive Deposit Policy
Rights of depositors (especially small depositors); all aspects of deposit operations, charges, secrecy, and confidentiality. Tying-up deposits with other products is prohibited.
2 · Cheque Collection Policy
Three aspects: (a) Immediate credit for local/outstation cheques; (b) Time frame for collection; (c) Interest payment for delayed collection.
3 · Customer Compensation Policy
Based on IBA model policy. Covers: (a) Erroneous debits due to fraud; (b) Interest for delays in cheque collection; (c) Interest for delay in duplicate draft; (d) Other unauthorised bank actions causing financial loss.
4 · Customer Grievance Redressal Policy
Well-documented policy for handling customer grievances.
Exam Trap — MCQ 2
"Customer Compensation Policy provides for compensation for delay in ___." Answer: (b) issuing a duplicate draft. Opening accounts, issuing cheque books, and filling passbooks are not explicitly covered under the Compensation Policy.
3. ATM Operations — Critical Numbers
All ATM Numbers at a Glance
Rule 1 — Free Transactions
Own bank ATM: 5 free/month (financial + non-financial). Other bank ATM — metro: 3 free; non-metro: 5 free.
Rule 2 — PIN Validation for Every Transaction
PIN must be validated for every successive transaction including balance enquiry. Time-out must be enabled at all screens/stages.
Rule 3 — Complaint Lodging at ATM Kiosks
Banks must display: (a) Helpline/contact numbers of the ATM-owning bank; (b) RBI's Uniform Template for lodging ATM complaints. Customers must be informed that failed ATM transaction complaints go to the card-issuing bank.
Rule 4 — Efficiency Measures at ATMs (6 points)
(i) Display "cash not available" before transaction; (ii) Display ATM-ID on premises; (iii) Complaint forms with official contact; (iv) Sufficient toll-free numbers; (v) Register mobile/email for alerts; (vi) Inform customers: failed ATM complaints → card-issuing bank.
Rule 5 — Penalty for Non-Replenishment
Cash-out > 10 hours in a month → flat penalty of ₹10,000 per ATM. For White Label ATMs (WLAs), the penalty is charged to the bank providing cash; bank may recover from the WLA operator.
Rule 6 — ATM Disputes: No Bilateral Settlement
All disputes between issuing and acquiring banks must be settled only through the ATM System Provider. No bilateral settlement outside this mechanism is permissible.
Rule 7 — Resolution Timeline
Wrongful debit complaints must be resolved within T+5 working days of receipt. Delay beyond T+5 → card-issuing bank pays ₹100/day, credited automatically without any customer claim.
Exam Trap — MCQ 3
"For resolution of disputes related to ATM transactions, ___." Answer: (d) the settlement will be through the ATM service provider only. Both bilateral settlement and sole liability on either bank are wrong — the system provider mechanism is mandatory.
4. Security Issues & Customer Liability in Electronic Transactions
4.1 Zero Liability Rule
A customer is entitled to zero liability in two situations:
| Situation | Reporting Requirement |
|---|---|
| Contributory fraud / negligence / deficiency on the part of the bank | No reporting needed — zero liability even without report |
| Third-party breach (no deficiency with customer or bank) | Customer must inform bank within 3 working days of receiving bank's communication about the transaction |
4.2 Delayed Reporting (4–7 Working Days)
When responsibility lies elsewhere in the system and the customer reports between 4 and 7 working daysafter receiving bank's communication, liability is the lower of: (a) transaction value, or (b) the amount in the table below.
| Type of Account | Max Liability (₹) |
|---|---|
| BSBD Accounts | 5,000 |
| All other SB accounts; Pre-paid Payment Instruments & Gift Cards; Current/CC/OD of MSMEs; Current/CC/OD of individuals with limit ≤ ₹25 lakh; Credit cards with limit ≤ ₹5 lakh | 10,000 |
| All other Current/CC/OD accounts; Credit cards with limit > ₹5 lakh | 25,000 |
Reporting beyond 7 working days
Liability determined as per the bank's Board-approved policy (communicated to customers). Banks may at their discretion waive customer liability even for customer negligence cases. Compensation credit is value-dated as of the date of the unauthorised transaction.
4.3 Card Security Measures
• Lost card: Block immediately on being informed; formalities can follow within a reasonable period.
• Online alerts: Mandatory for all debit/credit card transactions.
• CNP (Card Not Present) transactions: Additional factor of authentication required. For MOTO / Standing Instructions without AFA — issuer bank must reimburse customer without demur.
• Customer-induced risk controls: Cap on value/mode of transactions; limit beneficiaries added per day; velocity checks; dynamic AFA; digital signature for large payments; mandatory SMS/email alert registration; reply-to-alert for objection.
5. Service at the Counters & Customer Information
5.1 Business Hours Norms
| Norm | Rule |
|---|---|
| Staff Reporting (metro/urban) | 15 minutes earlier than business start |
| Minimum business hours | 4 hours on weekdays and working Saturdays |
| Rural branches | Can fix own business hours and weekly holidays to suit local needs |
| Counter availability | No counter to remain unattended during business hours |
| Counter closure | All customers inside banking hall at close of business must be attended |
| Public holiday under NI Act | Sec 25 NI Act: Central Govt notifies nationally; State Govt (via 1957 delegation) for state/part of state |
5.2 Information Display Requirements
• Comprehensive Notice Board: Minimum size 2 feet × 2 feet at each branch. Four categories: Customer service information | Service charges | Grievance redressal | Others.
• Principles: Updated (with date); simple and readable; bilingual/trilingual; mark recent changes; list items with detailed booklets.
• Booklets/Brochures: Bilingual/trilingual; minimum Arial 10 font.
• Website: Five columns of mandatory disclosure — (I) Policies/Guidelines, (II) Complaints (Ombudsman info), (III) Account Opening, (IV) Loans & Advances, (V) Branches & ATMs.
• Key Fact Statement: Clear, concise one-page summary in credit agreements.
5.3 Service Charges Display
Must be displayed in the local language at branches. Key items: (a) Services free of charge; (b) Minimum balance and charges for non-maintenance; (c) Collection charges for outstation cheques; (d) DD charges; (e) Cheque book charges; (f) Account statement charges; (g) Account closure charges; (h) ATM deposit/withdrawal charges, if any.
6. Special Arrangements & Other Provisions
6.1 Special Arrangements at Branches
• Ramps at ATMs/branches: Mandatory for wheelchair users/persons with disabilities.
• Sick/old/incapacitated account holders: If too ill to sign, thumb impression accepted. If unable to even put thumb impression, a mark (toe impression, instrument in physical contact) is acceptable per IBA guidance.
• Visually impaired persons: All facilities (cheque book, ATM, net banking, locker, retail loans, credit cards) must be offered without discrimination. They are legally competent to contract.
• Talking ATMs with Braille keypads: Mandatory. Magnifying glasses to be provided at branches for persons with low vision.
• Autism / Cerebral Palsy / Mental disabilities: Banks must rely on and be guided by orders/certificates of the competent authority appointing guardians/managers.
6.2 Other Key Provisions
| Provision | Rule |
|---|---|
| Transgender persons | Third gender must be included in all forms/applications where gender is classified |
| Form 15-G / 15-H | Banks must give an acknowledgement at the time of receipt |
| TDS Certificate (Form 16A) | Must be provided within the time-frame prescribed under Income Tax Rules |
| Cash acceptance over the counter | Branches must invariably accept cash; restricting cash deposits is an unfair practice and prohibited |
| Erroneous debits (bank at fault) | Bank must acknowledge liability and pay without demur; system fault → compensate up to Board-policy limit |
| Clean overdrafts | Branch managers may grant clean overdrafts for small amounts to customers with satisfactory dealings |
| Rounding off transactions | ≥ 50 paise → round up to next rupee; < 50 paise → ignored. Applies to all transactions including interest. |
7. Master Summary Table
| # | Concept | Key Fact / Number |
|---|---|---|
| 1 | Board memorandum on customer service | Once every 6 months |
| 2 | Branch Level Committee — quorum rule | Must include at least 1 senior citizen; meets monthly |
| 3 | Standing Committee — quarterly reports source | Branch Level Committees send quarterly reports to it |
| 4 | Free ATM transactions — own bank | 5/month |
| 5 | Free ATM transactions — other bank metro | 3/month |
| 6 | Free ATM transactions — other bank non-metro | 5/month |
| 7 | ATM cash-out penalty trigger | More than 10 hours in a month |
| 8 | ATM cash-out penalty amount | ₹10,000 flat per ATM |
| 9 | ATM complaint resolution deadline | T+5 working days |
| 10 | ATM delay compensation | ₹100/day, auto-credited |
| 11 | ATM dispute settlement mechanism | ATM System Provider only; no bilateral settlement |
| 12 | Zero liability — third-party breach | Report within 3 working days of bank's communication |
| 13 | Limited liability — delayed reporting | 4–7 working days; limited to table amount or txn value (lower) |
| 14 | Max liability — BSBD accounts | ₹5,000 |
| 15 | Max liability — SB/MSME/≤₹25L/CC≤₹5L | ₹10,000 |
| 16 | Max liability — Large CC/OD/CC>₹5L | ₹25,000 |
| 17 | Notice board minimum size | 2 feet × 2 feet |
| 18 | Booklet font size minimum | Arial 10 |
| 19 | Minimum business hours | 4 hours/day on weekdays + working Saturdays |
| 20 | Rounding off rule | ≥ 50p → round up; < 50p → ignore |
Check Your Progress — Answers Explained
Q1 — (a) branch
Branch Level Customer Service Committees are mandatory at all branches (not regional/HO only).
Q2 — (b) issuing a duplicate draft
Customer Compensation Policy explicitly covers interest for delay in duplicate draft issue. Opening accounts, issuing cheque books, and filling passbooks are not covered.
Q3 — (d) settlement through ATM service provider only
No bilateral settlement between issuing and acquiring bank is permissible outside the ATM system provider's dispute mechanism.
Exam Strategy — Chapter 17
- Four bodies + their level: CSSB (Board), Standing Committee (CMD/ED), Branch Level (branch, monthly, senior citizen), Nodal (HO + controlling office). CSSB = Board; don't mix up.
- Four policies: Deposit, Cheque, Compensation, Grievance. The Compensation Policy specifically covers duplicate draft delay — that's the MCQ hook.
- ATM numbers: 5/3/5 free; >10h → ₹10,000 penalty; T+5 → ₹100/day auto. These three appear in MCQs most often.
- No bilateral ATM settlement is a popular distractor — the answer is always "ATM system provider only."
- Zero liability = bank fault OR 3-day report. Limited liability = 4–7 days. Beyond 7 = board policy.
- Liability amounts: BSBD=₹5K; everything else up to mid-range = ₹10K; large = ₹25K.
- Cash acceptance is mandatory — restricting counter cash deposits is an unfair practice.
- Rounding: ≥ 50p round up; < 50p ignore. Applies to interest too.
- Talking ATMs + Braille keypads are mandatory for visually impaired. Magnifying glasses at branches.
- Third gender in all bank forms — classic social-banking MCQ.
Discussion
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