PPBM president Amrit Lal Jain writes to ED, RBI, highlighting problems of MSE entrepreneurs

Amritsar/Ludhiana, February 20, 2015: Punjab Pradesh Beopar Mandal president Amrit Lal Jain has sent a letter to Executive Director, Reserve Bank of India, highlighting certain problems being faced by MSE entrepreneurs.

Regarding Branch Level Customer Service Committee, he has stated that the concept of Branch Level Customer Service Committee is very well dealt with in the Master Circular of RBI on “Customer Service in Banks” (Para 2.3) dated July 1, 2014, which is issued by Department of Financial Inclusion and Development. As per the circular, at least once in a month, the meetings of such committee should be held. But unfortunately, the same has been limited to just a formality. Usually the Branches prepare a manual Register for the same and minutes are prepared by the Branch incharge himself without even holding any committee meeting and signatures of his near and dear customers are taken on the minutes of the meeting. “We believe that this was not the intention of RBI at the time of introduction of this beautiful concept”, he pointed out. 

While suggesting he stated that a person having knowledge in the field of Banking say, a Professional should be made a member of every Customer Service Committee who should be customer of that Branch. The Meetings of Committee should be taken very seriously and it should be the responsibility of the Branch to upload the minutes of the meeting online. The photograph of the proceedings of meeting should also be uploaded alongwith. Apart from this, a system should be developed where every customer of the Branch is given opportunity to participate in Customer Service Committee Working of the Branch.  Efforts should be made to spread awareness among the Customers that such a concept is there. Date and time of holding Customer Service Committee Meeting should be displayed by the Branch at a eminent place in the Branch and suggestions/grievances of every customer should be invited.  

Regarding policy for immediate credit of local/outstation cheques, Jain stated that as per Para 14.1.2 of Master Circular on “Customer Service in Banks”, RBI has clearly advised the Banks that “For local cheques, credit and debit should be given on the same day or at the most the next day of their presentation in clearing. Ideally, in respect of local clearing, banks shall permit usage of the shadow credit afforded to the customer accounts immediately after closure of relative return clearing and in any case withdrawal shall be allowed on the same day or maximum within an hour of commencement of business on the next working day, subject to usual safeguards.” Also, there is a Model “Customer Compensation policy” framed by “IBA” which details the various circumstances and amount of compensation to be paid to customer on account of delayed collection of cheques etc. But in day to day business, the credit is given on the 3rd day of presentation of cheque. He suggested that the Bank statement which is given to customer should clearly indicate the date on which cheque has been presented for clearing , the date on which the amount has been credited to the account of the customer and the amount of compensation paid by the Bank on account of delayed clearing. He also suggested that the credit should be given within an hour on opening of business hours on next day, in case of  Strike by banks, if the customer has suffered some interest loss due to non-presentation of cheque in clearing, the same should be reimbursed to that customer and penalty should be increased for dishonour of cheques due to insufficiency of funds. A minimum penalty of Rs. 300 should be imposed on the customer who has issued the cheque, and also suggested that any charges on the customer who has lodged the cheque for outward clearing and the cheque has been dishonoured due to signatures mismatch or insufficiency of funds, should not be levied. The charges should be levied on only that customer who has issued the cheque.

Regardidng loans to Micro, Small and Medium Enterprises, he stated that as per Master Circular dated 01/07/2014 on “Lending to Micro, Small & Medium Enterprises Sector” issued by Reserve Bank of India (Para 4.3)- “A composite Loan of Rs.1 Crore can be sanctioned by banks to enable the MSE entrepreneurs to avail of their working capital and term loan requirement through single window”. He added as per scheme framed by Credit Guarantee Fund Trust for Small and Medium Enterprises (CGTMSE), Funding upto Rs. 1 Cr can be done without any collateral security to any Micro or Small Enterprise. The problem being faced by the Micro and Small Enterprises is that the banks hesitate and  generally reject the loan application of the borrowers applying under the scheme.  Thereby giving no relief to the industry practically, he said.