The Reserve Bank of India has released five basic rights of bank customer (Charter for Consumer Rights):

• Right to fair treatment

• Right to transparency, fair and honest dealing

• Right to suitability

• Right to privacy

• Right to grievance redress and compensation

RBI has initially asked all the scheduled commercial banks, regional rural banks and urban co-operative banks to prepare their own board approved policy incorporating the five basic rights of the charter.

The charter will also contain a monitoring and oversight mechanism for ensuring adherence. The policy, if needed, would have to be suitably dovetailed with the Model Customer Rights Policy proposed to be formulated by IBA/BCSBI.

In RBI’s charter, the products offered by banks should be appropriate to the needs of the customer. This has come in the wake of banks increasing focus on distributing third party products. Banks should maintain transparency regarding a product’s price, the associated risks, the terms and conditions that govern use over the product’s life cycle. The customer should not be subjected to unfair business or marketing practices, coercive contractual terms or misleading representations.

To ensure that customer’s privacy is protected, banks are asked to keep customer’s personal information confidential unless they have offered specific consent to the financial services provider.

The RBI has also advised the Indian Banks Association (IBA) and the Banking Codes and Standards Board of India (BCSBI) to formulate a Model Customer Rights Policy encapsulating the principles outlined in the charter.