New Delhi, May 2 (KNN) The Reserve Bank of India (RBI) has not reprimanded banks for their unfriendly customer practices and remained silent, said All India Bank Employees’ Association (AIBEA).

In a Memorandum signed by AIBEA addressed to RBI Governor Urjit Patel, the banks union said that “RBI as the banking regulator has been proactive in improving the customer service rendered by banks. However, the RBI has not taken banks to task on the many customer-unfriendly practices that are increasing with impunity."

The Memorandum further reported that the Banking Ombudsman’s scheme, which has been created by RBI to address the complaints raised by bank customers, is making no attempts to observe the pattern of complaints which would leads to rampant miss-selling of insurance and wealth management products.

The Memorandum also highlighted that over the years, the RBI has remained silent on various anti-depositor actions of the banks and the Ombudsman's rulings tend to favor banks.

Suggesting measures, AIBEA said that with the increased use of digital payments post demonetization drive, it is compulsory to bring a mechanism or system in the banking structure in a bid to protect customer from faulty and unauthorized banking transactions.

It said that effective portability of banks is a counter-measure to various restrictive practices followed by the banks and has also been successfully implemented in the telecom sector and helped customers in large numbers.

On highlighting the state of portability of banks, the memorandum said no practical portability option exists in banking primarily due to standing instructions for both incomes (pensions, annuities, dividends, interest) and expenses (utilities and others) and the difficulties associated with changing those standing instructions.

However, the Portability of loan exists on paper but need to make it simpler and easy to execute without putting fiscal and non-fiscal burden on the consumer, memorandum suggested.

The Memorandum pointed out the customer agreements drafted by the banks which are not customer-friendly and their interests, frequent increase in bank charges.

The Memorandum drew Patel's attention to its draft circular on limiting customer liability and shifting the onus of proving customer fault on banks which is yet to be converted into a Master Circular to be followed by the banks.

In this direction, it is an urgent need of an hour that the RBI must release a Master circular/notification and charter Customer Rights with clear provisions fixing timelines for redressal and escalation, penalty for negligent service and interest/compensation to customers for losses caused due to miss-selling, Memorandum suggested.