Customer Service in Banks

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  • Topic: Bank, Customer service, Cheque
  • Pages : 14 (4270 words )
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  • Published : December 1, 2011
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By Ajaya Kumar Mohanty, M.A (Economics), MBA, CAIIB


A good banking sector with good banking habit can accelerate the pace of development of a country. Banking is the key industry in the service sector and it will not be travesty of truth to call it as the financial nerve centre of economy. The unique characteristics of service industry such as Intangibility, Inseparability, Heterogeneity, Perishability and Ownership puts it in altogether different footing. Money Creation is also another unique characteristics of Banking. Indian Banking system is largest branch network and spread over vast area. The Banking structure is also of special mention as more than 90% banking business is handled by Public sector Banks. About 50% of branches of PSBs and more than 32200 branches are rural in nature. Major chunk of customers of these banks are illiterate, ignorant, poor, backward and with less banking habits. There have been developmental banking function attached to PSBs for which they were thought of as vehicle for development rather than a commercial business entity. In the last one and half decade, with the introduction of Financial Sector Reforms, there have been sea changes in Banking scenario. Right from seventies there have been clamor for amelioration in customer service in banks. With the emergence of New Generation Banks, Introduction of Technology, Competition, Deregulation etc. new dimensions to customer service have been added. In the present scenario Customers’ Delight has been the buzz word in Banking. Old generation as well as New Generation Banks are working hard to improve customer loyalty and retention equity.


In post-nationalisation period Banking commission, headed by Sri R G Saraiya, in the year 1972, gave an elaborate account of the erstwhile Banking and suggested a large number of measures to improve the banking system.

In 1977 Talwar committee was constituted and was the earliest one to study the customer service in Banks. The committee studied in depth the areas of deficiencies in systems and procedures and suggested a series of recommendations so as to address major problems in customer service in banks. .

❑ Standardisation of Procedure for transfer of Accounts ❑ TOD facility to SB depositors, facility for encashment of personal cheques for reasonable amount after normal business hurs. ❑ Legislation to make drawing of cheques by customers without funds as a penal offence. ❑ Introduction by Confirmed Staff acceptable

❑ Standardisation of Bank Demand Drafts.
❑ Immediate credit of outstation cheques upto Rs.2500.00 ❑ Interest on delayed collection outstation cheques
❑ Mechanisation of clearing at all metros
❑ Provision for complaint/Suggestion box in the branch/office. ❑ Formation of Customer Service Committee at branch.
❑ Rationalisation of Service Charges.
❑ Customer Service centres at Zonal / HO level
❑ Provision for May I Help You ? counter at branches
❑ Provision for time norm board in branches.

After this landmark recommendations in the area of customer service, eventhough various committees were formed to improve functioning and streamline, the most important committee that exclusively set up to look into the problems of customer service in banks is the Goiporia committee (1990). The following are the terms of reference.

❑ To study the causes of persistent below par customer service. ❑ The areas of deficiencies in service and the remedy for the same ❑ How to improve work culture and inculcation of greater customer orientation among bank employees. ❑ Identification of structural and operational rigidities/ inadequacies in system and procedures which adversely affect customer service and to suggest remedial measures. ❑...
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