Thursday, February 10, 2011

Customer Service in Banks

A high-powered committee, constituted by RBI last year under the Chairmanship of former Sebi chief M Damodaran, is likely to soon submit its recommendations to the central bank on required changes in existing policy framework and prevalent practices of customer service in banks.

The Reserve Bank of India (RBI) may soon tighten its noose on banks lacking on customer service front by a new set of rules, which could include hefty penalties and other remedial measures to guard against such lapses.

RBI desires improvement in customer service. Damodaran committee has submitted report by collecting opinions of CMD or ED of a few banks that too sitting in a AC room. But in my view no improvement may take place until there is a change in attitude of field functionaries, front like workers and officers who are monitoring the operations of the branches. As a matter of fact employees in banks are the most neglected sector. Practically there is no effective policy for Human Resource Development through there is a name board for HRD in all administrative offices. There are a few officers who are looking into routine matters of sanction of leave, LTC, training etc. But no efforts are ever taken to award the real workers to create an environment which motivates honest and devoted workers, which may award an officer whose image among customers is the best, which may award an officer whose lending is safe and secure. On the contrary all actions of higher officials demonstrate that flatterers are the choice of big bosses.

Higher management in PSU banks or the officials of RBI or that of banking division or the Ministry of Finance in government of India always talk of health of bank, health of loan assets, and quality of customer service but never talk on Human Resource. They have never tried to assess and ascertain whether employees who are working in various branches are really enthusiastic to show excellent performance. Fact is that everybody who is interested to move fast in career in busy in keeping immediate boss happy or to keep his godfather at higher offices happy, not by work performance but by offering costly gifts and by extending red carpet welcome to visiting officials. Such flatterers manage costly gifts not by spending from their own pocket but by instructing to their valued customers to manage gifts for bosses.
When customers spend lacs and crores on providing gifts to bank officials, bank management should never expect quality financing from Branch officials. As such quality of assets shown in their balance sheet would never be safe and sound.

Similarly Customers service is good for those customers who spend huge money on bank employees and on officers who visit branches from higher offices and on officers who are number one flatterers of higher officials. Flattery is the key to success in promotion or to get choice posting. Customer service or quality of asset is totally irrelevant. Most of senior employees, hard workers, honest performers and devoted officers are frustrated and demotivated and passing through depression or various diseases. They are neither given annual increment nor treated fit for promotion. Juniors are selected for higher post at the cost of dignity of seniors. Obviously when there is no self respect for working officials there is no interest left in the mind of good worker toward quality of customer service or the quality of loan assets created by bank loans.

RBI has never tried to assess why banks are directly recruiting officers in higher scales and createing frustration among existing senior, experienced and talent officers and clerical staff. Why in the name of marketing banks are spending crores of rupees on MBAs who know nothing about banking? I therefore without any hesitation say that selection of CMD. ED.of a bank is defective which promotes not honesty or work culture only flattery and bribe culture. In such position Damodaran committee report on improvement of customer service will prove futile and ineffective just like other committee reports.

Only happy servant can extend good customer service. It is foolish to imagine of improvement in service when serving employees are not inclined to do so. Ten men can pull a horse forcefully to a pond but cannot force horse to drink water. In Private sector, the more an employee is old, the more he is treated as loyal, reliable and trustworthy. Senior employees in private sector are highly respected and treated as good as owner. But in public sector banks, importance of an employee especially in officer cadre increases not by dint of work or seniority but by dint of flattery, gifts and bribe only.

There is a guideline in every bank that bank employees will work not only for the satisfaction of customers but also for delightment of customers. Several top officers preach such sermons during their visits to branches or during training programme.Why do they not consider delightment of their employees who are the real servers of the customers and who are as good as customers for top management.
It is worthwhile to mention here that in the recent past RBI governor and CMD s of various banks gathered in Ranchi for activating financial inclusion. The amount spent on extending hospitality to RBI governor and CMD of various banks was much higher than what was actually spent for the sake of Financial Inclusion of poor villagers. A few villages are adopted or a few girl children are adopted by these high profile dignitaries just to gather popularity and win the favour of Ministry of Finance. Actual work done during last 40 years of banking for the welfare of poor villagers and poor farmers is dismal compared to what has been spent in the name of social welfare, social banking, service area approach or financial inclusion .Similarly customer service in banks has not improved in Public sector banks during last 40 years of nationalization though several rules have been framed and numerous guidelines have been issued by RBI in this regard. Only attractive banners, hoardings, slogans, boards are used in banks as in other offices of the government to show that bankers or government officers are ready to serve the people .To preach the sermon is easier than to follow the same.

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