RBI committee proposes extending Deposit Insurance to PPIs

The RBI Customer Service Standards Review Committee has proposed a slew of initiatives including a central database of KYC documents and a common portal for complaints and tracking.

The committee also proposed extending the Deposit Insurance and Credit Guarantee Scheme to PPIs (Prepayment Instruments), since the funds in PPI wallets are in the nature of deposits and the issuers of PPIs are regulated by the RBI.

“The RBI may examine whether the Deposit Insurance and Credit Guarantee (DICGC) coverage can be extended to bank PPIs and later to non-bank PPIs based on the experience gained,” the committee said in its report, released on Monday.

To improve customer service

The committee proposed moving gradually towards “principled” regulation, based on well-recognised, customer-friendly principles, and establishing a structure of incentives and disincentives to encourage regulated entities to take proactive steps to improve customer service and systemic strength.

The formation of the committee was announced in April 2022 to assess and review the quality of customer service, study evolving needs, identify best practices, and propose measures to improve customer service quality and grievance handling mechanisms. It was created in May 2022 and headed by former RBI Deputy Governor BP Kanongo.

The central bank sought comments and feedback on the report by July 7, 2023.

The committee proposed making the Customer Rights Charter enforceable and extending it to non-bank financial companies, standardizing customer service regulations for all regulated entities, establishing a common complaints portal, strengthening banks’ grievance handling mechanisms, and developing and publishing a ‘Customer Service and Protection Index’. and conduct periodic and regular thematic studies across entities.

“The Reserve Bank, in its supervisory process, should take a look at the reasonableness of the fees charged by REs for services rendered,” she said, adding that the RBI may also consider asking the Indian Banks Association (IBA) to set up a fund. To directly compensate the banks’ internal ombudsmen to avoid conflicts of interest.

As part of the governance structure for customer service, the committee proposed mandating nomination in deposit accounts, allowing for decedent claims to be settled online, setting a schedule for resolving claims after which higher interest may be applicable, and maintaining a central database of KYC documents associated with ID Unique client.

UPI Transactions

He also suggested keeping UPI transactions outside the limits set for debit savings account transactions, encouraging the use of digital lockers, providing a dedicated telephone helpline number for senior citizens and customers with different abilities, standardizing the ATM interface, and using customer relationship management (CRM) technology to collect information. Related to the customer to establish a central warehouse, fraud prevention measures.