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Know your banking rights

Mumbai, July 1: If you are a customer of a bank and don’t know how interest is calculated on the deposit/ loan account, what is the interest rate policy for premature withdrawal of deposit or you have any other query, help is on the way.

A Code of Bank’s Commitment to Customers will soon ensure that all these doubts are answered.

More than 50 commercial banks ' public, private and foreign ' have expressed willingness to abide by the code which aims to set minimum standards of banking practices. Signatories to this code have to follow these practices when they deal with customers.

V.P. Shetty, chairman of the Indian Banks’ Association, which played a key role in bringing the code, said it should be implemented in a few months.

The code, which has to be made available to every customer, contains details of information a bank should give before a person becomes its client. It also has information a person would get after he becomes a customer.

Therefore, if you become a customer of a bank, it will give more information on the key features of the product, including applicable interest rates/fees. It will also be obliged to offer information on your rights and responsibilities, particularly about nomination facility available with all deposit accounts, articles in safe custody and safe deposit vaults.

The bank will automatically register your name under the “Do Not Call Service”, if you so want. Customers, therefore, need not worry about phone calls/SMS or email about any new product/service unless they inform the bank in writing that they intend to avail themselves of the service.

There are many other details the bank will provide. It will give you information about the interest rates which apply to a deposit or loan account and they are calculated. While banks will also inform customers when it changes interest rates on its products, they will also display in their branches a notice about the tariff schedule a customer can seek free of cost.

The code is the first formal collaborative effort by the Reserve Bank, the banking community and the newly set up Banking Codes and Standards Board of India, which will monitor and assess compliance with the standards banks agree to.

“The code is required to be made available to every individual bank customer by the bank free of cost, so that he knows his rights,” said board chairman K.J. Udeshi.

“Each member bank would have to have a help desk or a help line. It must have a code compliance officer at every controlling office above the branch and it must have a cheque collection policy, a compensation policy approved by its board,” Udeshi, who has worked in RBI, added.

While Canara Bank, Bank of Baroda, Union Bank of India, Standard Chartered Bank and HSBC have already expressed willingness to implement the code, it is expected that over a period nearly 85 banks will sign up.

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