The Haryana government has introduced this system of service guarantee through an administrative order instead of an enactment and has implemented the same already. The central government too has introduced a Bill called: The Citizens Right to Grievance Redress Bill, 2011 and same is yet to be passed by Parliament. It is not clear why many other state governments have not taken this initiative so far. However, these enactments are applicable only to the departments of the state governments concerned. There is a need to ensure that such regulations should be made applicable to all public utilities whether in the public or private sector, so as to make life a bit more comfortable for the common man.

The Reserve Bank of India (RBI) should take a cue from these regulations and come out with guidelines for all commercial banks in the country. RBI should identify all services rendered by banks to the customers and stipulate a time-frame for delivery of all such services. Appropriate penalties should be imposed for delay or default in delivery of such services, so to give a new orientation to the customer service practices in the country. Very often we find banks asking a customer to call on the bank on the next day to collect his pass book or cheque book when such jobs are required to be attended to instantly, on the same day. This tendency can be curbed only by levying a penalty for non delivery and enforcing it strictly without exception.

In fact RBI has already made a beginning by levying a penalty of Rs100 per day, if the bank concerned does not refund within seven days the amount that was not dispensed by the ATM of the bank but debited to the customer’s account. This has served as a wake-up call for all banks to own up the responsibility for failure of their ATMs in dispensing cash to the customers. Similar penalties should be imposed for all services rendered by both the private and the public sector banks, and create a new benchmark for customer service in the banking industry in our country.

This is a good example for all the other regulators in this country, like the Securities and Exchange Board of India (SEBI), Insurance Regulatory & Development Authority (IRDA) and Telecom Regulatory Authority of India (TRAI), etc to learn from this novel initiative and introduce penalties for a delay in providing service, both in the public and private sector, and this will improve customer service.

For instance, in the case of insurance policies, there is always a delay in payment of terminal benefits and the insurance companies do not pay any interest for the delayed payment, though they collect interest on the delayed payment of premium by the assured. As per the principle of insurance, the insured amount becomes due on the happening of the event covered under insurance like death, accident, etc, and hence IRDA should insist upon payment of interest from the date of happening of the event till the payment of the insured amount and any delay in payment beyond reasonable period should also be penalized by appropriate penalties. This will help in creating accountability on the part of service providers.

Similarly, delay in payment for securities sold is a very common phenomenon in the capital market and the brokers, while ensuring that they collect advance from their customers when buying shares, are not prompt in payment when they sell the shares. These temptations to delay payment can be controlled only by levying penalty for such delay and SEBI, too, should come out with appropriate guidelines and enforce them without fear or favour.

The purpose of this article is to keep the readers of Moneylife informed about these developments to weed out corruption in public service in their respective states, as the success of these systems will depend on the awareness among the citizens about their right to timely service. Besides, if this article can spur the regulators of various public utilities to emulate the example initiated by state governments and formulate similar systems in all private and public utilities, it will go a long way in bringing about transparency, accountability and efficiency in public service, thereby reducing corruption in day to day life of citizens considerably.

Reference & credits:  [email protected]  Photo courtesy: www.kla.kar.nic.in

(The author is a financial analyst and he writes for Moneylife under a pen-name ‘Gurpur’.)