By Raghunath Pradhan
Nepalese Financial Institutions are running in most competitive environment which is proof by the presence of large number financial institution itself. Despite of happening of huge number of merger and acquisition, there are still 26 numbers of Banks, 17 numbers of Development Banks and 17 numbers of Finance Companies. FIs are providing their best and prompt services to their customer providing timely information on their tariffs and rates, establishing the system of lodging complaints and grievances and defining complaints and grievances handing procedure. The details of services providing by them, commission and interest rate applying on various types of deposits and loans are also used to provide on their websites for information of general public.
Customer is the king in a competitive environment. Goods and services needs to be provided as per the requirement of customers and must be reviewed time to time as per the lodged complaints and grievances by the customer. In fact, complaints and grievances are the basic raw materials of financial institutions which need to be taken into account while developing and reengineering their products and services. Financial Institutions are the most trustworthiness institution. They run their business on the trust and confidentiality of its customer. Customer will be confident only when they could rely on the fact that they can withdraw their deposited principle and accrued interest at any time as per their requirement and they will be treated fairly and equitably without exploitation.
One of the basic objective of Nepal Rastra Bank as per Nepal Rastra Bank Act 2058 is to increase the access of the financial service and increase the public confidence towards the banking and financial system by maintaining stability of the banking and financial sectors. It will be possible only when the system ensure the financial customer that they will be treated fairly and impartiality with adequate amount of disclosure and transparency and effective grievance handling system.
For enhancing Customer Protection and Grievance Handling Procedure adopted by the Financial Institution and thereby boosting up the confidentiality of financial customer the regulator, Nepal Rastra Bank, has issued its directives number 20 making provision on Financial Customer Protection and Financial Literacy and placed Financial Consumer Protection and Grievance Management Manual, 2077.
Some of the basic provision made by the directives and the manual are listed hereunder for the general information of financial customer:
1. FIs are required to inform its terms and condition of the services to their customers publically in detail.
2. Arrangement shall be made for providing detail information on the transactions carried by the customer free of cost.
3. Arrangement shall be made for displaying applicable rate of interest on loan and advances and deposits on its internet banking and mobile application besides on its website.
4. Narration of the transactions carried by the customer needs to be given clearly and precisely on its core banking system.
5. FIs shall use simple and clear language while providing information on its services and products and issuing notices so that it could be read and understand easily by its customer.
6. Special counter shall be fixed for providing banking services smoothly to the senior citizen, illiterate and physically impaired person.
7. Prior information needs to be given to its customer before charging or levying revised rate. Such information may be provided publically publishing its notice on national level/regional or district level papers as per the status of the institution.
8. No charges shall be levied by FIs while opening the account, issuing cheque book including GFP marked one, marking stop payment, issuing statements of the accounts for the first time, issuing balance certificate, operating and closing the account, crediting the remittance received amount, activating dormant account and providing ABBS services.
9. No charges shall be levied on any account on account of minimum balance not maintained and the interest at the fixed rate shall be paid even though the required minimum balance is not maintained on the account.
10. FIs are not allowed to levy any charge other than service charge, advance payment fee and commitment fee. ‘A’ class financial institution may levy service charge upto 0.75% while approving the loan. Further, FIs are also allowed to levy commitment charge and renewal fee upto 20% of service charge and also levy SWAP and advance payment fee under certain circumstances.
11. For protecting the financial customer against charging irrelevant charges the directives have clearly spell out that FIs are restricted to levy any kind of charges other than specified on the directives. Charging of any kind of fee other than specified, FIs are liable to refund 110% of levied amount.
12. In case of rejection of the applied loan FIs are required to refund the levied service charge.
13. FIs are required to established ‘Information and Grievance Hearing Desk’ for hearing grievance of general public and their customer. Grievance hearing officer not below the rank of senior manager shall be appointed and his/her name, designation and mobile number shall be given on their website. Further, they are also required to provide the detail list of lodged grievances and its resolution status on half yearly basis within 15 days of half year end to Regulation Department and related Supervision Department of Nepal Rastra Bank.
14. Financial Consumer Protection and Grievance Management Manual, 2077 has made provision of Grievance Management Committee under the coordinatorship of senior Dy Governor for addressing the dispute between financial service provider and financial consumer and/or their grievance. Financial Consumer Protection Unit shall work as secretariat of Grievance Management Committee.
Consumer is one who buys goods or services for some value. Since the consumer is paying value for the purchased goods or services it will be her/his right to have right to safety, right to information, right to choose, right to educate, right to be heard and finally right to redressed. Financial consumer plays vital role on the development process of the country. They must be aware on his right for expediting development process of financial system of the country.