BCSBI & Code for MSEs

BCSBI
• Reserve Bank of India has set up an
autonomous board, “ The Banking Code and
Standards Board of India” (BCSBI) to ensure fair
treatment to customers.
• Banks are required to register with BCSBI by
joining it as a member.
• A fair practice code drafted by working group of
IBA, approved by BCSBI and named as “Code of
Bank’s commitment to customers” has been
released to public by RBI on 01.07.2006.
 Key Commitments
• To act fairly and reasonably in all the dealings
with the customer.
• To help the customer to understand how the
bank’s financial products and services work.
• To help the customers to use their a/c or avail
various services.
• To deal quickly and sympathetically with things
that go wrong.
• To treat all the personal information of the
customer as private & confidential
• To adopt and practice a non-discriminatory
policy
• To publicise the “Code”
 Contents…
• This is a voluntary code, which sets minimum
standards of banking practice for the bank to
follow when dealing with individual customers
• Promote good & fair banking practices
• Increase transparency for better understanding
• Promote a fair & cordial relationship
• Foster confidence in the banking system
• It provides protection to the customers and
explains how the bank is expected to deal with
for the day to day operations
 Citizen's Charter
• Citizen's Charter purpose is to make customers
aware of his rights and responsibilities in dealing
with the Bank, as also the various products and
services made available by the Bank.
• Time norms for various banking transactions
• Time norms for issue of Duplicate DD (fortnight)
• Standing instructions
• CD a/c’s, SB a/c’s, TD a/c’s, Lockers
• Payment of interest
• Servicers charges
• Exchange of soiled/ Mutilated notes
 Fair Practices & Policies
• Fair practice code for Lenders
• Policy on collection of cheques
• Compensation Policy
• Policy on Collection of Dues &
Repossession of Security
• Policy on Grievance Redressal Mechanism
• Policy on payment of balance in Deceased
a/c’s
 BCSBI
• Interest rates- When & how we apply
• Charges- Notice for free services, minimum
balance charges, issue of DD/ Statement of A/C,
A/c closure charges, cheque issue charges etc
• Notification about change in charges will be one
month prior
• Advertisement & promotional material to be clear
and not misleading
• Closure of a/c within 5 working days of receiving
instruction
• Transfer of a/c to new branch within two weeks
subject to KYC at new branch
 Model Code
• Identity and authority to represent would be made known to you at the
first instance
• Your privacy would be respected
• Interaction with you would be in a civil manner
• Normally our representative would contact between 0700 hours & 1900
hours unless the special circumstances of your business require otherwise
• Your request to avoid calls at a particular time or at a particular place
would be honoured as far as possible
• Time & number of calls and contents of conversation would be
documented
• All assistance would be given to resolve disputes or differences regarding
dues in a mutually acceptable and in an orderly manner
• During visits to your place for dues collection decency & decorum would
be maintained
• Inappropriate occassions such as bereavement in the family or such other
calamitous occasions would be avoided for making calls/ visits to collect
dues
 Code for MSEs
► This is a voluntary code which sets minimum
standards of banking practices for banks to
follow when they are dealing with Micro & Small
Enterprises (MSEs) as defined in the MSMED act,
2006.
► It provides protection to MSE and explains how
banks are expected to deal with MSE for their
day-to-day operations and in times of financial
difficulty.
► The code does not replace or supercede
regulatory or supervisory instructions issued by
RBI and will comply with such instructions issued
by RBI from time to time.
 Objectives of the Code
► Give a positive thrust to the MSE sector by
providing easy access to efficient banking service
► Promote good & fair banking practice by setting
minimum standards in dealing MSE
► Increase transparency so that a better
understanding of what can reasonably expected of
the services
► Improve our understanding of business through
effective communication
► Promote a fair and cordial relationship between
MSE & banks and also ensure timely and quick
response to banking needs
► Foster confidence in the banking system.
 Credit Assessment
► Acknowledge the receipt of loan application
► Dispose of application for a credit limit or enhancement
in existing limit up to Rs 2 lakh within 2 weeks and for
credit limit up to Rs 5 lakh within 4 weeks
► Not insist on collateral up to Rs 10 lakh
► Enclose checklist with applications for sanction
of loans
► Additional queries to be raised within 7 days from
date of receipt of application
► Copy of all loan document to be supplied
► Reason for rejection to be given in writing

► Provide W.C. limit on the basis of 20% of PAT

 Credit Assessment
• Ensure disbursal of loan sanctioned within 2 working days
from date of compliance of all terms & conditions of
sanction
• Inform change of interest rate within 7 days
• 30 days prior notice in case of change of fee or
introduction of a new fee
• Terms & conditions to be informed to new MSEs
• Notify loan policy in website & branch
• Current a/c of MSE to be closed within 2 working days on
receipt of request
• In case of transfer of a/c’s the a/c to become operative
within 1 week at the transferee branch
Sir SPBT College 12
• PROVIDING MINIMUM BANKING FACILITIES OF
RECEIPT AND PAYMENT OF CASH/ CHEQUES AT
THE BANK’S COUNTER
• MAKING SURE OUR PRODUCTS & SERVICES MEET
RELEVANT LAWS AND REGULATIONS IN LETTER &
SPIRIT
• ENSURING THAT OUR DEALINGS REST ON ETHICAL
PRINCIPLES OF INTEGRITY AND TRANSPARENCY
• ENSURING THAT OUR ADVERTISEMENTS AND
PROMOTIONAL LITERATURE ARE CLEAR AND NOT
MISLEADING
• GIVING INFORMATIONS ABOUT OUR BENEFITS
AND HOW TO AVAIL THESE BENEFITS
• PROVODING REGULAR APPROPRIATE UPDATES
• GIVING INFORMATION ABOUT CHANGES IN THE
INTEREST RATES, CHARGES OR TERMS &
CONDITIONS
• CORRECTING MISTAKES PROMPTLY AND
CANCELLING ANY BANK CHARGES THAT ARE
APPLIED DUE TO MISTAKE
• PROVIDING A COPY OF THE CODE TO THE EXISTING
CUSTOMERS AND TO THE NEW CUSTOMERS AFTER
OPENING THE A/C’s
• MAKING THIS CODE AVAILABLE AT ALL BRANCHES
& ON OUR WEBSITE
• ENSURE THAT OUR STAFF ARE TRAINED TO
PROVIDE RELEVANT INFORMATION
• NO DISCRIMINATION ON THE BASIS OF AGE, RACE,
GENDER, MARTIAL STATUS, RELIGION OR
DISABILITY.
• INFORMATION CAN BE RECEIVED ON INTEREST
RATES, COMMON FEES AND CHARGES THROUGH
(A) NOTICE BOARD AT THE BRANCHES,(B)
PHONING OUR BRANCHES,(C) WEBSITE, (D)
ASKING OUR STAFF, (E) TARIFF SCHEDULE
 ON YOUR BECOMING OUR CUSTOMER, WE WILL:-
• GIVE INFORMATION OF OUR PRODUCTS, FEES &
CHARGES, INTEREST RATES
• AUTOMATICALLY REGISTER YOUR NAME UNDER “DO NOT
CALL” SERVICE. WE WILL NOT INFORM YOU THROUGH
SMS, TELEPHONE, EMAILS, ANY NEW
PRODUCTS/SERVICES UNLESS YOU INFORM US TO AVAIL
THE INFORMATION
• INFORM YOU THE INTEREST RATES OF DEPOSIT & LOANS
& WHEN WE WILL PAY INTEREST IN DEPOSIT A/Cs OR
CHARGE INTEREST IN LOAN A/Cs & METHOD OF
CALCULATION OF INTEREST.
•
.
WE WILL DISPLAY IN OUR BRANCHES:-
• SERVICES WHICH ARE RENDERED FREE OF CHARGE
• CHARGES FOR NOT MAINTAINING MINIMUM BALANCES
IN SB & CD A/Cs
• CHARGES FOR OUTSTATION CHEQUE COLLECTION, ISSUE
OF DD & CHEQUE BOOKS
• ANY INCREASE IN THE CHARGES WILL BE NOTIFIED ONE
MONTH PRIOR TO THE REIVSED CHARGES (WILL BE MADE
WITH PROSPECTIVE EFFECT GIVING NOTICE OF ONE
MONTH)
• ANY CHANGES WITHOUT NOTICE WILL BE NOTIFIED
WITHIN 30 DAYS. IF SUCH CHANGE IS TO YOUR
DISADVANTAGE, YOU MAY WITHIN 60 DAYS AND
WITHOUT NOTICE CLOSE YOUR A/C OR SWITCH IT
WITHOUT HAVING TO PAY ANY EXTRA CHARGES OR
INTEREST
• IF WE AVAIL SERVICES OF THIRD PARTIES FOR PROVIDING
SUPPORT SERVICES, WE WILL REQUIRE THAT SUCH THIRD
PARTIES HANDLE YOUR PERSONAL INFORMATION (IF ANY
AVAILABLE TO THEM) WITH THE SAME DEGREE OF
CONFIDENTIALITY & SECURITY AS WE WOULD.
• A CODE OF CONDUCT HAS BEEN PRESCRIBED FOR DIRECT
SELLING AGENCIES (DSAs) WHOSE SERVICES WE MAY
AVAIL TO MARKET OUR PRODUCTS/ SERVICES e.g. TO
IDENTIFY THEMSELVES WHEN THEY APPROACH
PERSONALLY OR THROUGH PHONES
• IN THE EVENT OF ANY COMPLAINT REGARDING
IMPROPER CONDUCT OR ACTION IN VIOLATION OF THIS
CODE APPROPRIATE STEPS WILL BE TAKEN TO
INVESTIGATE AND TO HANDLE THE COMPLAINT AND TO
MAKE GOOD THE LOSS
• ALL PERSONAL INFORMATIONS WILL BE TREATED
AS PRIVATE & CONFIDENTIAL (EVEN WHEN YOU
ARE NO LONGER A CUSTOMER).
• INFORMATION OR DATA RELATING TO YOUR A/Cs
WILL NOT BE REVEALED TO ANYONE INCLUDING
OTHER COMPANIES IN OUR GROUP OTHER THAN
IN EXCEPTIONAL CASES:-
• IF WE HAVE TO GIVE THE INFORMATION BY LAW
• IF THERE IS A DUTY TOWARDS THE PUBLIC TO REVEAL
• IF OUR INTEREST REQUIRE US TO GIVE THE INFORMATION ( e.g. TO
PREVENT FRAUD)
• ON YOUR REQUEST/ PERMISSION
• TO ANY BANKER WITH YOUR WRITTEN PERMISSION
 CREDIT REFERENCE AGENCIES
• ON OPENING A/Cs WE WILL TELL YOU WHEN WE MAY
PASS YOUR A/C DETAILS TO CREDIT REFERENCE AGENCIES
AND THE CHECKS WE MAY MAKE WITH THEM:-
• YOU HAVE FALLEN BEHIND YOUR PAYMENTS
• THE AMOUNT OWED IS NOT IN DISPUTE
• YOU HAVE NOT MADE PROPOSALS WE ARE SATISFIED
WITH FOR REPAYING THE DEBT, FOLLOWING OUR
FORMAL DEMAND
• IN THESE CASES WE WILL INTIMATE YOU IN WRITING
THAT WE PLAN TO GIVE THE INFORMATION TO CREDIT
REFERENCE AGENCIES AND ALSO THE ROLE OF THE
AGENCIES. WE WILL GIVE A COPY OF THE INFORMATION
THAT WE HAVE GIVEN TO THE AGENCIES OR PROVIDE
THEIR LEAFLETS.
 COLLECTION OF DUES
• WHEN WE GIVE LOANS WE WILL EXPLAIN YOU THE
REPAYMENT PROCESS BY WAY OF AMOUNT,TENURE,
PERIOD.
• ON FAILURE TO REPAY, A DEFINED PROCESS IN
ACCORDANCE WITH THE LAWS OF THE LAND WILL BE
FOLLOWED.
• OUR COLLECTION POLICY IS BUILT ON COURTESY, FAIR
TREATMENT & PERSUASION.
• ALL THE STAFF MEMBERS OR ANY PERSON AUTHORISED
TO REPRESENT OUR BANK IN COLLECTION / SECURITY/
REPOSSESSION WOULD FOLLOW THE GUIDELINES SET
OUT BY THE BANK:-
• YOU WOULD BE CONTACTED ORDINARILY AT THE PLACE OF YOUR
CHOICE AND IN THE ABSENCE OF ANY SPECIFIED PLACE AT THE
RESIDENCE AND IF UNAVAILABLE AT RESIDENCE THEN AT THE
PLACE OF BUSINESS / OCCUPATION
• Identity and authority to represent would be made known to you at the
first instance
• Your privacy would be respected
• Interaction with you would be in a civil manner
• Normally our representative would contact between 0700 hours & 1900
hours unless the special circumstances of your business require otherwise
• Your request to avoid calls at a particular time or at a particular place
would be honoured as far as possible
• Time & number of calls and contents of conversation would be
documented
• All assistance would be given to resolve disputes or differences regarding
dues in a mutually acceptable and in an orderly manner
• During visits to your place for dues collection decency & decorum would
be maintained
• Inappropriate occassions such as bereavement in the family or such other
calamitous occasions would be avoided for making calls/ visits to collect
dues
 IF YOU WANT TO MAKE A COMPLAINT, WE WILL TELL YOU HOW TO
DO THIS:
• WHERE A COMPLAINT CAN BE MADE
• HOW A COMPLAINT CAN BE MADE
• WHEN TO EXPECT A REPLY
• WHOM TO APPROACH FOR REDRESSAL
• WHAT TO DO IF YOU ARE NOT HAPPY ABOUT THE OUTCOME
• WE WILL DISPLAY IN OUR BRANCHES & ON WEBSITES THAT WE ARE
COVERED BY THE BANKING OMBUDSMAN SCHEME 2006 OF RBI.
COPY WILL BE MADE AVAILABLE ON REQUEST AT A NOMINAL
CHARGE.
• WITHIN 30 DAYS OF LODGING A COMPLAINT WITH US, IF YOU DO
NOT GET A SATISFACTORY RESPONSE YOU MAY APPROACH
BANKING OMBUDSMAN. SALIENT FEATURES OF THE SCHEME ARE
DISPLAYED IN THE BRANCHES
 PRODUCT & SERVICES
• SB, CD, TD, NO FRILL A/Cs CAN BE OPENED AT THE BRANCHES IN
THE STYLES:- SINGLE, JOINT, E OR S , FORMER OR SURVIVOR,
LATTER OR SURVIVOR WITH OR WITHOUT NOMINATION FACILITIES
• WE WILL CARRY OUT DUE DILIGENCE AS REQUIRED UNDER KYC
• IF YOU ARE NOT HAPPY ABOUT YOUR CHOICE OF CD OR SB (EXCEPT
TD) WITHIN 14 DAYS WE WILL HELP YOU TO SWITCH TO ANOTHER
A/C OR WE WILL GIVE YOUR MONEY BACK WITH INTEREST EARNED
• IF YOU DECIDE TO CLOSE YOUR SB OR CD A/Cs WE WILL CLOSE THE
A/C WITHIN 5 DAYS OF GETTING INSTRUCTION
• IF YOU WANT TO TRANSFER YOUR A/C IT WILL BE MADE
OPERATIVE AT THE NEW BRANCH WITHIN TWO WEEKS OF
RECEIVING YOUR REQUEST SUBJECT TO KYC COMPLIANCE AT THE
NEW BRANCH. THE NEW BRANCH WILL BE INFORMED ABOUT
STANDING INSTRUCTION / DIRECT DEBITS IF ANY.
 .
• INFORMATION WILL BE GIVEN ABOUT:-
• PREMATURE WITHDRAWAL OF TD & INTEREST RATE POLICY ON IT,
FACILITY OF LOAN/ OD AGAINST TD
• MANNER OF OPENING MINOR’S A/C & ITS OPERATION
• INOPERATIVE/ DORMANT A/Cs PERIOD
• IMMEDIATE CREDIT OF OUTSTATION CHEQUES
• CLEARING CYCLE OF LOCAL CHEQUES
• BRANCH CLOSURE/ SHIFTING NOTICE WITHIN 3 MONTHS IF THERE
IS NO OTHER BRANCH OF ANY BANK AT YOUR CENTRE & 2 MONTHS
IF THERE IS ANY BRANCH OF OTHER BANK
• STOP PAYMENT FACILITY
• SETTLEMENT OF CLAIMS IN DECEASED A/Cs WITH TIME LIMITS
( NOT EXCEEDING 15 DAYS FROM THE DATE OF RECEIPT WITH
PROOF OF DEATH & SUITABLE IDENTIFICATION OF CLAIM(S) TO
BANK’S SATISFACTION)
• SAFE DEPOSIT LOCKERS, FOREIGN EXCHANGE SERVICES,
REMITTANCES , LENDING, LOAN PRODUCTS, GUARANTEE, CREDIT
CARD, INTERNET BANKING etc.
THANK
YOU
 MSMED Act 2006
• The Government of India has enacted the Micro.
Small and Medium enterprises development
(MSMED) Act, 2006 which was notified on Oct 2,
2006.
• Consistent with the notification, definition of
micro, small and medium enterprises has been
modified and is required to be implemented by
the banks along with other policy measures
 Code for MSEs
• The Banking Codes and Standard Board of India has
formulated a code of Bank’s commitment to Micro &
Small Enterprises.
• This is a voluntary code which sets minimum standards of
banking practices for banks to follow when they are
dealing with Micro & Small Enterprises (MSEs) as defined
in the MSMED act, 2006.
• It provides protection to MSE and explains how banks are
expected to deal with MSE for their day-to-day operations
and in times of financial difficulty.
• The code does not replace or supercede regulatory or
supervisory instructions issued by RBI and will comply
with such instructions issued by RBI from time to time.
 Code for MSEs
• Give a positive thrust to the MSE sector by providing easy
access to efficient banking service
• Promote good & fair banking practice by setting minimum
standards in dealing MSE
• Increase transparency so that a better understanding of
what can reasonably expected of the services
• Improve our understanding of business through effective
communication
• Encourage market forces, through competition, to achieve
higher operating standards
• Promote a fair and cordial relationship between MSE &
banks and also ensure timely and quick response to
banking needs
• Foster confidence in the banking system.
 Code for MSEs
• Acknowledge the receipt of loan application
• Dispose of application for a credit limit or enhancement in
existing limit up to Rs 2 lakh within 2 weeks and for credit
limit up to Rs 5 lakh within 4 weeks
• Not insist on collateral up to Rs 5 lakh
• Enclose checklist with applications for sanction of loans
• Additional queries to be raised within 7 days from date of
receipt of application
• Copy of all loan document to be supplied
• Reason for rejection to be given in writing
• Provide W.C. limit on the basis of 20% of PAT
 Code for MSEs
• Ensure disbursal of loan sanctioned within 2 working days
from date of compliance of all terms & conditions of
sanction
• Inform change if interest rate within 7 days
• 30 days prior notice in case of change of fee or
introduction of a new fee
• Terms & conditions to be informed to new MSEs
• Notify loan policy in website & branch
• Current a/c of MSE to be closed within 2 working days on
receipt of request
• In case of transfer of a/c’s the a/c to become operative
within 1 week at the transferee br.