Nudging to make pass-books issued by Indian banks more transparent and readable…

Vivina Vishwanathan of Valueresearch points to how RBI has asked banks to provide more information on the passbooks:

Typically, a bank passbook or statement is a truncated copy of the record of your account maintained by the bank. Therefore, before it is given to you, a lot of information is removed from it and some of what is left behind makes little sense.

Let’s consider an ATM withdrawal. Most bank account statements or passbooks give you very little details of the ATM from which you withdrew the money. This makes it difficult for customers to verify the transaction from the statement. Most people simply verify the amount withdrawn, and guess from that where the transaction may have taken place. That’s about to change. 

In a notification last week, the Reserve Bank of India (RBI) asked banks to avoid unreadable entries in account statements and passbooks of individuals. The RBI wants that these statements should be brief and intelligible to avoid any kind of inconvenience to depositors.

The central bank said it had noticed that many banks still do not provide adequate details of transactions in the passbooks and statements, which allows account holders to cross-check them. 

In the interest of better customer service, the apex bank has come out with a list of details that should be provided. It further said that banks have to incorporate information about the deposit insurance cover, along with the limit of coverage subject to change from time to time, upfront in the passbooks. 

In order to give some direction, the RBI has also indicated how banks should make entries in their statements and passbooks. For instance, in case of withdrawals, banks have to clearly mention the name of the payee, mode of payment such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) or cheque (with number and name of the bank). In case of ATM withdrawals, the entry should read ‘self-withdrawal’ with the name of the ATM or branch. In case of any debit for bank charges, the bank has to mention the category of charge, such as: fee, commission, fine or penalty. Also, the bank has to mention whether the bank charges are for return of cheque, fee on draft, SMS alerts, ATM fees or additional cash withdrawal.

Hmm….The RBI notice is here

One wonders what took it so long for banks to bring more transparency in pass books/account statements. Unless RBI rules prevented the banks from sharing detailed information which looks highly unlikely. Even downloading the account statements via internet banking is like reading a software code. No attention has been paid by banks on these basics requiring the regulator to nudge the banks.

 

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