The Reserve Bank of India (RBI) has urged banks to ensure strict compliance with Know Your Customer (KYC) norms while maintaining an empathetic approach, Deputy Governor Swaminathan J said during the Conference of Directors of Private Sector Banks in Mumbai. He emphasized that failure to adhere to these guidelines would invite regulatory actions.
Swaminathan expressed concern over the ineffectiveness of customer grievance redressal systems, including internal ombudsmen, which are often treated as mere formalities. He stressed the need for these mechanisms to be more effective, impartial, and prompt in addressing customer issues.
‘Customer trust in the banking system is a key priority for the RBI. This is an area where we are significantly focusing to enhance trust and will not hesitate to intervene if necessary,’ Swaminathan stated.
Highlighting the importance of transparency and fairness, the deputy governor called for a balanced approach where technology adoption, ethical leadership, and traditional governance duties like risk management and financial oversight coexist harmoniously.
The RBI has also encouraged banks and financial institutions to leverage digital transformation to enhance operational efficiency. Earlier this year, the central bank announced plans to develop an AI-enabled system to alert individuals of real-time financial fraud, underlining its commitment to safeguarding customer interests.
In another significant move, the RBI recently mandated banks and fintech firms to make point-of-sale (PoS) devices and other payment solutions accessible to persons with disabilities (PwDs). This follows the release of the “Accessibility Standards and Guidelines for Banking Sector” by the finance ministry, aimed at fostering inclusivity.
Swaminathan’s remarks reaffirm the RBI’s dedication to prioritizing customer trust, technological advancement, and inclusivity in India’s banking ecosystem.
