JAIIB · PPB · Chapter 17

Customer Service Guidelines

RBI's complete framework for customer service in banks — institutional setup, Board-approved policies, ATM rules, liability limits, and special provisions.

1. Organisational Framework for Customer Service

RBI requires each bank to have four institutional bodies dedicated to customer service oversight. The Board reviews customer service via a detailed memorandum once every six months.

Mnemonic — CSSN ("Customer Service Starts Now")

Customer Service Committee of the Board · Standing Committee on Customer Service · Sub-branch (Branch Level) Committees · Nodal Department/Official

Body	Level	Key Facts
Customer Service Committee of the Board (CSSB)	Board	Experts + customer reps as invitees; formulates policies; reviews compliance; proactive role re Banking Ombudsmen complaints
Standing Committee on Customer Service	Executive	Chaired by CMD or ED; includes non-official members for independent feedback; monitors RBI compliance; bridge between departments and CSSB; recommended by CPPAPS
Branch Level Customer Service Committees	Branch	Formal channel: customers ↔ bank; must include at least one senior citizen; meets at least monthly; sends quarterly reports to Standing Committee
Nodal Department / Official	HO + each controlling office	First point of contact for grievances; liaison with Banking Ombudsman and RBI

Exam Trap

MCQ 1 asks: "Banks are required to have a customer service committee at every ___." Answer is (a) branch — the Branch Level Customer Service Committee is mandatory at all branches. Do not confuse with the CSSB (Board level) or Standing Committee (executive level).

2. Board-Approved Policies on Customer Service

Four policies must be Board-approved, displayed on the website and branch notice board, and communicated to customers when the relationship begins and when changes occur.

1 · Comprehensive Deposit Policy

Rights of depositors (especially small depositors); all aspects of deposit operations, charges, secrecy, and confidentiality. Tying-up deposits with other products is prohibited.

2 · Cheque Collection Policy

Three aspects: (a) Immediate credit for local/outstation cheques; (b) Time frame for collection; (c) Interest payment for delayed collection.

3 · Customer Compensation Policy

Based on IBA model policy. Covers: (a) Erroneous debits due to fraud; (b) Interest for delays in cheque collection; (c) Interest for delay in duplicate draft; (d) Other unauthorised bank actions causing financial loss.

4 · Customer Grievance Redressal Policy

Well-documented policy for handling customer grievances.

Exam Trap — MCQ 2

"Customer Compensation Policy provides for compensation for delay in ___." Answer: (b) issuing a duplicate draft. Opening accounts, issuing cheque books, and filling passbooks are not explicitly covered under the Compensation Policy.

3. ATM Operations — Critical Numbers

All ATM Numbers at a Glance

5Free transactions/month from own bank ATM (financial + non-financial)

3Free transactions from other bank ATM in metro centres

5Free transactions from other bank ATM in non-metro centres

>10hCash-out duration triggering penalty of ₹10,000 flat per ATM per month

T+5Working days to resolve ATM transaction complaints (from receipt of complaint)

₹100Per day of delay compensation — auto-credited without customer claim

Rule 1 — Free Transactions

Own bank ATM: 5 free/month (financial + non-financial). Other bank ATM — metro: 3 free; non-metro: 5 free.

Rule 2 — PIN Validation for Every Transaction

PIN must be validated for every successive transaction including balance enquiry. Time-out must be enabled at all screens/stages.

Rule 3 — Complaint Lodging at ATM Kiosks

Banks must display: (a) Helpline/contact numbers of the ATM-owning bank; (b) RBI's Uniform Template for lodging ATM complaints. Customers must be informed that failed ATM transaction complaints go to the card-issuing bank.

Rule 4 — Efficiency Measures at ATMs (6 points)

(i) Display "cash not available" before transaction; (ii) Display ATM-ID on premises; (iii) Complaint forms with official contact; (iv) Sufficient toll-free numbers; (v) Register mobile/email for alerts; (vi) Inform customers: failed ATM complaints → card-issuing bank.

Rule 5 — Penalty for Non-Replenishment

Cash-out > 10 hours in a month → flat penalty of ₹10,000 per ATM. For White Label ATMs (WLAs), the penalty is charged to the bank providing cash; bank may recover from the WLA operator.

Rule 6 — ATM Disputes: No Bilateral Settlement

All disputes between issuing and acquiring banks must be settled only through the ATM System Provider. No bilateral settlement outside this mechanism is permissible.

Rule 7 — Resolution Timeline

Wrongful debit complaints must be resolved within T+5 working days of receipt. Delay beyond T+5 → card-issuing bank pays ₹100/day, credited automatically without any customer claim.

Exam Trap — MCQ 3

"For resolution of disputes related to ATM transactions, ___." Answer: (d) the settlement will be through the ATM service provider only. Both bilateral settlement and sole liability on either bank are wrong — the system provider mechanism is mandatory.

4. Security Issues & Customer Liability in Electronic Transactions

4.1 Zero Liability Rule

A customer is entitled to zero liability in two situations:

Situation	Reporting Requirement
Contributory fraud / negligence / deficiency on the part of the bank	No reporting needed — zero liability even without report
Third-party breach (no deficiency with customer or bank)	Customer must inform bank within 3 working days of receiving bank's communication about the transaction

4.2 Delayed Reporting (4–7 Working Days)

When responsibility lies elsewhere in the system and the customer reports between 4 and 7 working daysafter receiving bank's communication, liability is the lower of: (a) transaction value, or (b) the amount in the table below.

Type of Account	Max Liability (₹)
BSBD Accounts	5,000
All other SB accounts; Pre-paid Payment Instruments & Gift Cards; Current/CC/OD of MSMEs; Current/CC/OD of individuals with limit ≤ ₹25 lakh; Credit cards with limit ≤ ₹5 lakh	10,000
All other Current/CC/OD accounts; Credit cards with limit > ₹5 lakh	25,000

Reporting beyond 7 working days

Liability determined as per the bank's Board-approved policy (communicated to customers). Banks may at their discretion waive customer liability even for customer negligence cases. Compensation credit is value-dated as of the date of the unauthorised transaction.

4.3 Card Security Measures

• Lost card: Block immediately on being informed; formalities can follow within a reasonable period.

• Online alerts: Mandatory for all debit/credit card transactions.

• CNP (Card Not Present) transactions: Additional factor of authentication required. For MOTO / Standing Instructions without AFA — issuer bank must reimburse customer without demur.

• Customer-induced risk controls: Cap on value/mode of transactions; limit beneficiaries added per day; velocity checks; dynamic AFA; digital signature for large payments; mandatory SMS/email alert registration; reply-to-alert for objection.

5. Service at the Counters & Customer Information

5.1 Business Hours Norms

Norm	Rule
Staff Reporting (metro/urban)	15 minutes earlier than business start
Minimum business hours	4 hours on weekdays and working Saturdays
Rural branches	Can fix own business hours and weekly holidays to suit local needs
Counter availability	No counter to remain unattended during business hours
Counter closure	All customers inside banking hall at close of business must be attended
Public holiday under NI Act	Sec 25 NI Act: Central Govt notifies nationally; State Govt (via 1957 delegation) for state/part of state

5.2 Information Display Requirements

• Comprehensive Notice Board: Minimum size 2 feet × 2 feet at each branch. Four categories: Customer service information | Service charges | Grievance redressal | Others.

• Principles: Updated (with date); simple and readable; bilingual/trilingual; mark recent changes; list items with detailed booklets.

• Booklets/Brochures: Bilingual/trilingual; minimum Arial 10 font.

• Website: Five columns of mandatory disclosure — (I) Policies/Guidelines, (II) Complaints (Ombudsman info), (III) Account Opening, (IV) Loans & Advances, (V) Branches & ATMs.

• Key Fact Statement: Clear, concise one-page summary in credit agreements.

5.3 Service Charges Display

Must be displayed in the local language at branches. Key items: (a) Services free of charge; (b) Minimum balance and charges for non-maintenance; (c) Collection charges for outstation cheques; (d) DD charges; (e) Cheque book charges; (f) Account statement charges; (g) Account closure charges; (h) ATM deposit/withdrawal charges, if any.

6. Special Arrangements & Other Provisions

6.1 Special Arrangements at Branches

• Ramps at ATMs/branches: Mandatory for wheelchair users/persons with disabilities.

• Sick/old/incapacitated account holders: If too ill to sign, thumb impression accepted. If unable to even put thumb impression, a mark (toe impression, instrument in physical contact) is acceptable per IBA guidance.

• Visually impaired persons: All facilities (cheque book, ATM, net banking, locker, retail loans, credit cards) must be offered without discrimination. They are legally competent to contract.

• Talking ATMs with Braille keypads: Mandatory. Magnifying glasses to be provided at branches for persons with low vision.

• Autism / Cerebral Palsy / Mental disabilities: Banks must rely on and be guided by orders/certificates of the competent authority appointing guardians/managers.

6.2 Other Key Provisions

Provision	Rule
Transgender persons	Third gender must be included in all forms/applications where gender is classified
Form 15-G / 15-H	Banks must give an acknowledgement at the time of receipt
TDS Certificate (Form 16A)	Must be provided within the time-frame prescribed under Income Tax Rules
Cash acceptance over the counter	Branches must invariably accept cash; restricting cash deposits is an unfair practice and prohibited
Erroneous debits (bank at fault)	Bank must acknowledge liability and pay without demur; system fault → compensate up to Board-policy limit
Clean overdrafts	Branch managers may grant clean overdrafts for small amounts to customers with satisfactory dealings
Rounding off transactions	≥ 50 paise → round up to next rupee; < 50 paise → ignored. Applies to all transactions including interest.

7. Master Summary Table

#	Concept	Key Fact / Number
1	Board memorandum on customer service	Once every 6 months
2	Branch Level Committee — quorum rule	Must include at least 1 senior citizen; meets monthly
3	Standing Committee — quarterly reports source	Branch Level Committees send quarterly reports to it
4	Free ATM transactions — own bank	5/month
5	Free ATM transactions — other bank metro	3/month
6	Free ATM transactions — other bank non-metro	5/month
7	ATM cash-out penalty trigger	More than 10 hours in a month
8	ATM cash-out penalty amount	₹10,000 flat per ATM
9	ATM complaint resolution deadline	T+5 working days
10	ATM delay compensation	₹100/day, auto-credited
11	ATM dispute settlement mechanism	ATM System Provider only; no bilateral settlement
12	Zero liability — third-party breach	Report within 3 working days of bank's communication
13	Limited liability — delayed reporting	4–7 working days; limited to table amount or txn value (lower)
14	Max liability — BSBD accounts	₹5,000
15	Max liability — SB/MSME/≤₹25L/CC≤₹5L	₹10,000
16	Max liability — Large CC/OD/CC>₹5L	₹25,000
17	Notice board minimum size	2 feet × 2 feet
18	Booklet font size minimum	Arial 10
19	Minimum business hours	4 hours/day on weekdays + working Saturdays
20	Rounding off rule	≥ 50p → round up; < 50p → ignore

Check Your Progress — Answers Explained

Q1 — (a) branch

Branch Level Customer Service Committees are mandatory at all branches (not regional/HO only).

Q2 — (b) issuing a duplicate draft

Customer Compensation Policy explicitly covers interest for delay in duplicate draft issue. Opening accounts, issuing cheque books, and filling passbooks are not covered.

Q3 — (d) settlement through ATM service provider only

No bilateral settlement between issuing and acquiring bank is permissible outside the ATM system provider's dispute mechanism.

Exam Strategy — Chapter 17

Four bodies + their level: CSSB (Board), Standing Committee (CMD/ED), Branch Level (branch, monthly, senior citizen), Nodal (HO + controlling office). CSSB = Board; don't mix up.
Four policies: Deposit, Cheque, Compensation, Grievance. The Compensation Policy specifically covers duplicate draft delay — that's the MCQ hook.
ATM numbers: 5/3/5 free; >10h → ₹10,000 penalty; T+5 → ₹100/day auto. These three appear in MCQs most often.
No bilateral ATM settlement is a popular distractor — the answer is always "ATM system provider only."
Zero liability = bank fault OR 3-day report. Limited liability = 4–7 days. Beyond 7 = board policy.
Liability amounts: BSBD=₹5K; everything else up to mid-range = ₹10K; large = ₹25K.
Cash acceptance is mandatory — restricting counter cash deposits is an unfair practice.
Rounding: ≥ 50p round up; < 50p ignore. Applies to interest too.
Talking ATMs + Braille keypads are mandatory for visually impaired. Magnifying glasses at branches.
Third gender in all bank forms — classic social-banking MCQ.

1. Organisational Framework for Customer Service

2. Board-Approved Policies on Customer Service

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