Reserve Bank of India Takes the Onus of Educating Depositors

Jaipur June 09, 2016

Reserve Bank of India (RBI), has established the ‘Depositor Education and Awareness Fund (DEAF) Scheme 2014’, comprising of unclaimed funds of depositors, for the purpose of utilizing for promotion of interests of depositors’. The statutory bases of this fund is Section 26 A of the Banking regulation Act, 1949 and on that this fund was created by taking over inoperative deposit accounts which have not been claimed or operated for ten years or more or any deposit or any amount remaining unclaimed for more than 10 years lying with various banks in India..

It is to be noted that as per the information provided in Indian Parliament in December 2013, Rs. 3,652 crore of unclaimed deposits is lying in Indian Banks. Out of this, 340 Crores deposited with the private bank and 75 Crores with the foreign banks. Among this amount 68 percent is of saving account and 13 percent is of fixed account. Rajasthan state also contributes to majority of this share, which includes major cities of the state like Jaipur, Kota, Udaipur, Ajmer, Chittorgarh, Bhilwara and Jodhpur etc. However, this does not extinguish the rights of the depositors/claimants to claim his/her deposits/unclaimed amount. Banks, on demand, shall repay the customer/depositor, along with interest if applicable and lodge a claim for refund from the fund for an equivalent amount paid. RBI has constituted a Committee to administer and manage the Fund in accordance with the Scheme. The fund needs to be utilized for promotion of depositors’ interests and for such other purposes, which may be necessary for promotion of depositors’ interest as may be specified by the Reserve Bank. RBI invited application from NGOs to conduct awareness related programmes from the Fund and for this, they registered NGOs with them. In first lag, as many as 20 NGOs got registered with RBI and for Rajasthan, Jaipur based NGO CUTS was assigned the task to implement the programmes in Rajasthan.

To kickstart the programe, CUTS decided to conduct awareness workshops in five cities of the state, which comprises of Jaipur, Kota, Chittorgarh, Bhilwara and Sawai Madhopur. The launch of the programme along with first awareness workshop got conducted in Jaipur on 7th June, 2016. Madhavi Sharma, banking Ombudsman along with General Manager, Banking Supervision, RBI, P K Pradhan and AGM, Deepak Gogia and many senior managers of various banks participated in the programme.

Madhavi Sharma in the capacity of Chief Guest said that it is quite natural that consumer may have grievances and complaints, if they are not satisfied with the banking services or products. But all bankers must take these complaints in good spirit and as an opportunity of reforming the banking services in general and banking system in particular rather than taking them as a nuisance activity. Banking Ombudsman also talked about the institution of Banking Lokpal, its functions and general principals and tips for depositors awareness so that the can their interests can be protected. S Balachandran, Senior Vice President, Axis Bank, Mumbai talked about ‘Know Your Customer’ (KYC) norms and demystified it. He explained in detail about the KYC norms, role of RBI in setting up the norms, importance of KYC and future role of KYC in safeguarding the depositor’s interest. Munish P Kothari, Chief Counsellor DISHA Trust- Financial Literacy Credit Counselling (FLCC) and also a former Regional Director of RBI, Mumbai talked in detail about the customer rights, Charter of customer rights, overall protection of consumer concerns and more importantly, he talked about the grievance redressal processes on banks and right to compensation for consumers. Mukesh A Mehra, Chief Manager, Baroda Academy, Bank of Baroda talked in detailed about steps taken by Bank of Baroda for consumer awareness programmes, steps taken for consumer protection and complaint redressal. He further added that BoB has already designated internal banking ombudsman, who is taking care of grievances of consumers in a fixed timeframe. N K Sharma, Chief Manager, State Bank of Bikaner and & Jaipur (SBBJ) also shared his experiences and said that along with the responsibilities of the banking officials it is also necessary that all the consumers also follow their duties and approach to the internal mechanism of banks of complaint redressal rather approaching directly to the high level officials.

The workshop was attended by around 125 customers comprises of urban, semi urban and rural areas, which included reps from NGOs/CSOs and media as well.