BCSBI

Background

In November 2003, Reserve Bank of India (RBI) constituted the Committee on Procedures and Performance Audit of Public Services under the Chairmanship of Shri S.S.Tarapore (former Deputy Governor) to address the issues relating to availability of adequate banking services to the common person. The mandate to the Committee included identification of factors that inhibited the attainment of best customer services and suggesting steps to improve the quality of banking services to individual customers. The Committee felt that in an effort to continuously upgrade the package of services that banks offered to their customers, there was a need for benchmarking of such services. After an in-depth study at the grass-roots level, the Committee concluded that there was an institutional gap for measuring the performance of banks against a bench mark reflecting the best practices (Code and Standards). Therefore, the Committee recommended setting up of the Banking Codes and Standards Board of I ndia (BCSBI). BCSBI was set up to ensure that the common person as a consumer of financial services from the banking Industry is in no way at a disadvantageous position and really gets what he/she has been promised. The Scheme of Banking Ombudsman, which has been functioning for quite some time, does not look into systemic issues with a view to enforcing a prescribed quality of service. Ideally, such a function should be performed by a Self-Regulatory Organisation (SRO) but in view of the existing framework of the banking sector in India, it was felt that an independent, autonomous Board will be best suited for the function. Therefore, Dr. Y.V. Reddy, Governor, Reserve Bank of India, in his Monetary Policy Statement (April 2005) announced setting up of the Banking Codes and Standards Board of India in order to ensure that a comprehensive code of conduct for fair treatment of customers was evolved and adhered to. The Banking Codes and Standards Board of India was registered as a society under the Societies Registration Act, 1860 in February 2006. It functions as an independent and autonomous body. Membership of BCSBI is voluntary and open to scheduled banks. Initially the membership of BCSBI was open to scheduled commercial banks and has now been extended to include Regional Rural Banks and select Urban Co-operative Banks. The general superintendence, direction and control of the affairs and funds of the Society is vested in the Governing Council (constituted by RBI) consisting of members drawn from different disciplines such as banking, economics, service etc. The first Governing Council relinquished office in December 2011 after which a new Governing Council was constituted.  The main objectives of the BCSBI are ·         To plan, evolve, prepare, develop, promote and publish comprehensive Codes and Standards for banks, for providing for fair treatment to their customers. ·         To function as an independent and autonomous body to monitor, and to ensure that the Codes and Standards adopted by banks are adhered to, in letter and spirit, while delivering services to their customers.  BCSBI has in collaboration with the Indian Banks' Association (IBA), evolved two codes - Code of Bank’s Commitment to Customers and the Code of Bank’s Commitment to Micro and Small Enterprises - which set minimum standards of banking practices for member banks to follow when they are dealing with individual customers and micro and small enterprises. These Codes are subject to periodical review and revision.. The central objective of these Codes is promoting good banking practices, setting minimum standards, increasing transparency, achieving higher operating standards and above all, promoting a cordial banker-customer relationship which would foster confidence of the common man in the banking system. The Codes lay great emphasis on transparency and providing full information to the customer before a product or service is sold to him. The Codes are not only commitments of banks to their customers but also in a sense a Charter of Rights for the common person. By setting the minimum standards of customer service, the Codes make the customer aware of he can expect each bank to deal with the his / her day-to-day requirements,  BCSBI monitors the implementation of the Codes through the following methods: ·         Obtains from member banks an Annual Statement of Compliance (ASC) ·         Visits branches to find out the status of ground-level implementation of Codes ·         Studies complaints received from customers and orders / awards issued by Banking Ombudsmen / Appellate Authority to find out whether there is any system-wide deficiency ·         Organizes an annual Conference with Principal Code Compliance Officers of the Member banks to discuss implementation issues. BCSBI also ·         Undertakes campaigns and initiatives to spread awareness of the Codes amongst customers and banks ·         Provides faculty support to training establishments of banks ·         Participates in on-location workshops held by / for member banks to increase coverage ·         associates with customer awareness programmes conducted by Banking Ombudsmen ·         provides credit counselling services in Mumbai  ·         publishes quarterly newsletter entitled ‘Customer Matters’, containing matters of interest to customers BCSBI is not a forum for redressal of individual grievances. BCSBI, however, examines each compliant to identify any systemic issue that may exist and takes up the matter with the respective bank to ensure that systems and procedures are suitably amended so that such complaints do not recur.

Members: The Board was set up as a Society, under the Societies Registration Act, 1860. Commercial banks,

RRBs and Urban Coop Banks are its members. RBI was funding the entire cost of operations of the Board for

the initial 5 years. Thereafter the Board has been levying an affiliation fee annually on all registered members.

Governing body: A Governing Council of the BCSBI looks after its financial affairs and managerial policies. The

tenure of the Council is 5 years and the appointment of the Council after 5 years would be with the concurrence

of the RBI. Objectives: The main objectives of the BCSBI is to plan, evolve, prepare, develop, promote and

publish voluntary comprehensive codes and standards for banks for providing fair treatment to their customers. It

shall carry out its activities on the basis of contract entered into with individual banks (the process of registration).

Memorandum of Association

Memorandum of Association of The Banking Codes and Standards Board of India It is necessary, in the public interest, to ensure that banks evolve comprehensive codes and standards for fair treatment of customers of banks. It is necessary to have an independent watch dog to ensure that banks deliver services in accordance with such codes and standards. It is necessary to ensure that the institutional mechanism is autonomous, independent and effectively monitors and enforces the compliance of such Codes and Standards. The subscribers have decided to set up this Society: Name Of The Society Registered Office Main Aims And Objects Other Aims And Objects Governing Council Subscription I) Name Of The Society The name of the Society shall be "The Banking Codes And Standards Board Of India" II) Registered Office The Registered office of the society shall be situated in the State of Maharashtra at Reserve Bank of India, C- 8/9, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051. The Society may change the place of Registered Office after following the procedure prescribed by law. III) A. Main Aims And Objects : The main aims and objects of the Society shall be: To plan, evolve, prepare, develop, promote and publish voluntary comprehensive Codes and Standards for banks, for providing for fair treatment to their customers. To function as an independent and autonomous watch dog to monitor and to ensure that the banking Codes and Standards voluntarily adopted by banks are adhered to, in true spirit by banks in delivering the services, as promised, to their customers. To conduct and undertake research of the Codes and Standards currently in vogue in and outside India. To enter into covenants with banks on observance of the codes and standards and for that purpose to train employees of such banks about the Banking Codes. To help people affected by natural calamities. B. Other Aims And Objects : To advertise and publish promotional literature in newspapers and otherwise about the Codes and Standards for the guidance and knowledge of the public through Web site, advertisements in the newspapers, magazines, journals, TV/Radio, hoardings or any other mode which the Society may deem fit. To take up specific assignments, if any, in the areas coming under the Society's objects as projects, turnkey solutions or on any other terms of contracts with in-house resources or with the participation of outside agencies in order to fully implement the Code. To organize teaching and training courses, conferences, seminars, lectures and similar other activities relating to the Codes and Standards or implementation of the said Codes and Standards. To publish journals, reports, pamphlets, books, booklets, research papers in furtherance of the objects of the Society. To maintain close contacts with Indian Banks' Association, other similar institutions, Boards and organizations having similar objects or allied objects by way of subscription, enrolment as a member thereof, financial or other kind of assistance, collaboration, cooperation and in any manner as the Society may deem fit. To initiate, establish and participate in collaborative activities with other institutions / organizations having similar objects within and outside the country. To establish, acquire, maintain and manage facilities such as offices, other accommodation, library, computer centers, etc. To institute and award fellowships, scholarships, prizes and medals to meritorious persons, in accordance with the Rules framed by the Society. To undertake any project or activity in furtherance of the objects of the Society. To do any or all other lawful things as the Board may deem fit for the attainment of all or any of its main or other objects. IV) Governing Council The names, addresses and occupation of members of the first Governing Council of the Society to which by the Rules of the Society the management

Rules and Regulations

PRELIMINARY 1. The Society shall not be operated for profit and no part of its income shall accrue to any of its member banks or its officials or any member of the Governing Council, provided that nothing herein contained shall prevent making of any payment, in good faith of, remuneration, honoraria, perquisites, sitting fees, facilities or benefits of any nature whatsoever to any member of the Governing Council, officials or anyone else as the Council deems fit, in return for any service rendered to the Society. 2. The aims and objects of the society shall be as given in the Memorandum DEFINITION 3. In these Rules, unless the context requires otherwise: Act means the Societies Registration Act, 1860 (Act XXI of 1860) in its application to the State of Maharashtra Chairman means the Chairman of the Governing Council referred to in Rule 6 or 7 Chief Executive Officer means the Chief Executive Officer of the Society referred to in Rule 13, or as the as may be, in Rule 14 Memorandum means the Memorandum of Association of the Society Representative means an officer of the member bank, nominated by that bank to represent it Society means "THE BANKING CODES AND STANDARDS BOARD OF INDIA" MEMBERSHIP OF THE SOCIETY 4. 1) The subscribers to the Memorandum shall become members of the Society only on signing the covenant with the Society agreeing to comply with the Codes and Standards and paying the fee as specified and fresh members may be admitted in accordance with the provisions of these Rules. 2) Membership of the Society shall be open to all banks that sign the covenant with the Society agreeing to comply with the Codes and Standards. 3) A bank agreeing to comply with the Codes and Standards shall make an application to the Society along with such fee as may be specified from time to time. 4) The Society shall maintain a roll or list of member banks with their addresses in accordance with the provisions of Societies Registration (Maharashtra) Rules, 1971. 5) A member bank shall pay such annual subscription as may be specified by the Society from time to time. 6) Member banks shall be entitled to get from the Society, the information and particulars in respect of the national and international banking Codes and Standards. MEETING OF MEMBER BANKS: 5. 1) The Society shall convene the annual general meeting of the member banks every year and the meeting shall be attended by the respective representatives who shall have the right to vote. 2) Five members present through their representatives shall be the quorum. If the quorum is not present, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Governing Council may determine. 3) If at the adjourned meeting also, a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall be a quorum. 4) The Annual General meeting shall be presided over by the Chairman and in his/her absence the members of the Governing Council present shall select one of them to preside over the meeting. 5) The Society shall, at each annual general meeting, appoint an auditor or auditors for auditing the accounts of the Society in accordance with the provisions of the Act and the Societies Registration ( Maharashtra ) Rules, 1971 and fix their remuneration. 6) All decisions shall be taken at the meeting by majority either by show of hands or by secret ballot as may be decided by the Chairman. 7) The Society shall, at each annual general meeting, review the activities of the Society and approve the accounts of the Society. 8) On the requisition of two third in number of the member banks of the Society, the Chairman shall within 15 days from the date of such requisition proceed duly to call an extraordinary general meeting of the Society. The requisition shall set out the matters for the consideration of which the meeting is to be called, shall be signed by the requisitionists, and shall be addressed to the Governing Council. 9) Provided that if within half an hour from the time appointed for holding a meeting upon a requisition, a quorum is not present, the meeting shall stand dissolved. FIRST GOVERNING COUNCIL: 6. 1) The individuals whose names are mentioned in Clause IV of the Memorandum shall be the members of the first Governing Council. 2) The term of the first Governing Council shall consist of two successive terms of three years and two years respectively. On the expiry of the first term of three years, Reserve Bank shall nominate members thereto for the second term of two years. Provided that the members retiring on the expiry of the first term shall be eligible for renomination for the second term. Provided further that the term of office of a member of the first Governing Council shall always be subject to the pleasure of Reserve Bank. 3) On the expiry of the second term, the members of the first Governing Council shall remain in office till the Governing Council is reconstituted in accordance with Rule 7. 4) Where a vacancy arises in the office of Chairman or any member of the first Governing Council, due to incapacitation or resignation or death or any other reason, the resulting vacancy may be filled by nomination by Reserve Bank. Provided that the member so nominated shall hold office only up to the date up to which the member in whose vacancy he is nominated would have held office if it had not been vacated as aforesaid. COMPOSITION OF THE SUBSEQUENT GOVERNING COUNCIL: 7. 1) On the expiry of the term of the first Governing Council, the subsequent Governing Council shall be constituted in the manner specified in this Rule. 2) The Governing Council shall have not more than seven, members, consisting of: upto four members nominated by Reserve Bank; upto two members nominated by the member banks in consultation with the Reserve Bank; and the Chief Executive Officer 3) The persons to be nominated shall be persons of eminence and competence or are experts in the field of banking, law, accountancy, information technology, rural development or representing sectors of depositors' / consumers' or such other fields and sectors as are considered relevant to the aims and objects of the Society. Provided that the officials in the employment of the member banks shall not be nominated as members of the Governing Council. 4) The members of the Governing Council shall elect a Chairman from among themselves. 5) If no such Chairman is elected for any reason, including a tie in votes, the Reserve Bank shall designate a member of the Governing Council as the Chairman of that Governing Council. TERMS OF OFFICE AND RETIREMENT: 8. 1 - A member of the Governing Council, nominated under Rule 7: shall hold office for a term not exceeding three years from the date of his nomination. Provided that members nominated by the Reserve Bank shall hold office during the pleasure of that Bank. shall be eligible for renomination for one more term, i.e. maximum of six years. Provided that he shall retire from office on the expiry of his term or during the tenure of his office or on attaining the age of 70 years, whichever is earlier, Provided further that he shall, notwithstanding such expiry of his term or extended term, continue to hold office until another member is nominated. Explanatory Note: Date of nomination means the date on which he first attends the GC meeting. 8. 2 - On the expiry of the term of the GC, the members of the GC shall remain in office and discharge their duties till the next GC is reconstituted in accordance with Rule 7. 8. 3 - The period of such ad-hoc extension, if any, under Rule 8.2 shall not be counted for the purpose of determining the maximum period of holding office by the Chairperson and Members. 8. 4 - All acts or decisions of the GC taken during the extended period shall be valid and effective for all purposes. RESIGNATION OF THE CHAIRMAN AND MEMBERS OF THE GOVERNING COUNCIL 9.1) The Chairman may, by writing under his / her hand addressed to the Governing Council, resign from the Governing Council. 2) A member of the Governing Council may, by writing under his / her hand addressed to the Chairman, resign from the Governing Council. VACATION OF OFFICE BY THE MEMBERS OF THE GOVERNING COUNCIL: 10. The office of a member of the Governing Council shall become vacant if he / she absents himself / herself from three consecutive meetings of the Governing Council, without obtaining leave of absence from the Governing Council. MEETINGS OF THE GOVERNING COUNCIL: 11.1) The Governing Council shall meet at least once in three months. The Chief Executive Officer shall convene meetings of the Governing Council in consultation with the Chairman and unless otherwise directed by the Chairman, 7 clear days' notice of the meeting shall be given to the members. 2) If a vacancy in the office of the member of the Governing Council occurs, the continuing members shall act as if no vacancy had occurred and no act or proceedings of the Governing Council shall be deemed invalid merely by reason of a vacancy in the Governing Council or a defect in the appointment of a person acting as a member. 3) The Chairman shall have the power to invite any person or persons not being members of the Governing Council to attend the meetings of the Governing Council and take part in the deliberations but such invitees shall not be entitled to vote. 4) The quorum for any meeting of the Governing Council shall be more than one half of the total number of members of the Governing Council, out of which at least two should be members nominated by Reserve Bank under sub-rule (2) of Rule 7. If there is no quorum, the meeting shall stand adjourned and be held in the following week, as directed by the Chairman. If on the adjourned date also no quorum of members assembles, the meeting shall continue as if quorum was there. 5) The Governing Council may meet at such places as may be determined by the Governing Council. The Chairman shall preside over all meetings of the Governing Council and in his / her absence the meeting shall be presided over by a member chosen by the other members present. 6) All decisions shall be taken at the meeting by majority either by show of hands or by secret ballot as may be decided by the Chairman. In case of tie in votes, the Chairman or as the case may be the presiding member shall have a second and casting vote, which shall be final. 7) A resolution in writing signed by a majority of the members shall be deemed to be the resolution passed by the Governing Council and shall be deemed to have been passed on the date on which the last signatory affixes his signature to it; Provided that any resolution passed in such a manner through circulation shall be placed before the next meeting for noting of the Governing Council; POWERS AND FUNCTIONS OF THE GOVERNING COUNCIL: 12.1) The general superintendence, direction and control of the affairs and funds of the Society shall be vested in the Governing Council which may exercise all powers and do all acts and things which may be exercised or done by the Society. 2) An annual review of the activities of the Society shall be made by the Governing Council and a copy thereof shall be laid before the annual general meeting of the Society and may also be published in such manner as may be decided by the Governing Council. 3) A review of the activities of the Society shall be made by the Reserve Bank in a meeting with the Governing Council on completion of four years and at the beginning of the fifth year from the registration of the society and consider strategies of the Society for future. 4) Without prejudice to the generality of the powers conferred by sub- rule (1), the Governing Council shall have power: i) To determine Financial and managerial policies; Priorities for the different activities of the Society; Remuneration, honoraria, perquisites, facilities, sitting fees or benefits of any nature whatsoever that may be paid or provided to any member of the Governing Council, the Chief Executive Officer, member of any committee, official or special invitee or other persons as the Governing Council may deem fit, in return for any service rendered to the Society. Establishment and maintenance of Provident and other benefit funds for the staff of the Society; Duties and conduct, salaries and allowances and other conditions of service of officers and other employees of the Society; Any other matter which is to be or may be provided. II. To establish and maintain a fund, by making appropriation to such extent as may be decided by the Governing Council from time to time, from out of the monies received from Reserve Bank of India , member banks or other monies received by the Society in any other way. III. To utilize a part or whole of the funds of the Society towards capital and recurring expenditure of the Society, to make appropriate investments as per the law and deal with the funds in any other way as may be necessary for the benefit of the Society. IV. To acquire by way of purchase or gift or to take on lease or hire or otherwise temporarily or on permanent basis, any movable or immovable property. V. To sell, assign, mortgage, lease, exchange, transfer or otherwise deal with all or any property, moveable or immovable, of the Society in the way it may find it necessary and to authorize the Chief Executive Officer or any other employee of the Society to execute requisite documents to carry out such transaction, and to take necessary action for proper maintenance of any such building, moveable or immovable property. VI. To borrow amounts for the purpose of carrying out the activities of the Society on the security of its assets or otherwise. VII. To authorize the Chief Executive Officer or any other employee of the Society to draw, accept, make, endorse, discount, execute, sign, issue or otherwise deal with cheques, hundies, drafts, certificates, receipts, Government securities, promissory notes, bills of exchange or other instruments and securities whether negotiable or transferable or not, subject to such conditions as may be specified. 5) The Governing Council shall sanction expenditures and investments of the funds of the Society and shall have the powers to delegate sanction of expenditure and investment of funds, subject to such conditions as it may specify. 6) The Governing Council shall have the powers to make, alter or rescind regulations of procedure as it may find necessary for the management of the affairs of the Society. 7) The Governing Council shall have the powers to approve the research activities and other programmes submitted to it for consideration by the Chief Executive Officer. FIRST CHIEF EXECUTIVE OFFICER: 13. The member designated as Chief Executive Officer in Clause IV of the Memorandum shall be the Chief Executive Officer on the registration of the Society. APPOINTMENT OF SUBSEQUENT CHIEF EXECUTIVE OFFICER: 14.1) The Chief Executive Officer of the Society shall be appointed by the Governing Council and shall hold his office during the pleasure of the Governing Council. Provided that in the event of the vacancy arising in the post of Chief Executive Officer, due to incapacitation or resignation or death or any other reason, the Chairman of the Governing Council shall have the authority to appoint an interim successor to the Chief Executive Officer, for a period of six months or, till the appointment of successor, whichever is earlier. 2) The Chief Executive Officer shall be legally competent to represent the Society in all legal and other official proceedings. 3) The Chief Executive Officer shall be ex officio member of the Governing Council. POWERS AND FUNCTIONS : 15.1) The Chief Executive Officer shall have the following powers and functions, namely: formulation, management and administration of all programmes, projects and other activities of the Society; preparation of the annual budget for submission to the Society at its Annual General Meeting selection of projects within the programmes approved annually by the Governing Council entering into contracts and agreements subject to policy guidelines and annual budget authorizations given by the Society at its annual general meeting and to disburse funds. procuring services including professional, academic, technical, clerical, maintenance, security and other administrative staff as are required to carry out the functions of the society, subject to the Rules made by the Governing Council. exercising such other powers and performing such other functions as may be delegated or assigned to him by the Governing Council COMMITTEES: 16. The Governing Council may constitute Committees for such purposes, on such terms and with such powers as it may consider necessary or desirable. ANNUAL BUDGET: 17. An annual budget shall be prepared and submitted by the Chief Executive Officer in the form and manner prescribed under the Bombay Public Trusts Act, 1950 and the Bombay Public Trusts Rules, 1951. MAINTENANCE OF BOOKS OF ACCOUNTS: 18. 1) The Society shall cause to be maintained such books of account and other books in relation to its accounts in such form and in such manner as may be prescribed under the Societies Registration ( Maharashtra ) Rules, 1971. 2) The financial year of the Society shall be from the 1st April of each year to the 31st March of the next year. STATEMENT OF ACCOUNTS: 19. The Society shall, as soon as may be, after closing the annual accounts, prepare a statement of accounts in such form as the Governing Council may, in consultation with the auditors of the Society, determine. FURNISHING OF ANNUAL ACCOUNTS AND AUDITOR'S REPORT TO SOCIETY: 20.1) A copy each of the annual accounts of the Society together with the auditor's report thereto and a report on the work undertaken during the year shall be furnished to the members of the Society. 2) A copy of the Annual Report of the Society as approved by the Annual General Meeting shall be placed in public domain within 30 days. ALTERATION, EXTENSION OR ABRIDGMENT OF PURPOSES: 21. The Society may alter, extend or abridge the purposes for which it is established or amalgamate the Society either wholly or partially with any other such Society, in accordance with Section 12 of the Act. REPRESENTATION IN SUITS AND OTHER LEGAL PROCEEDINGS: 22. For the purpose of Section 6 of the Act, the person in whose name the Society may sue or be sued shall be the Chief Executive Officer of the Society. DISSOLUTION OF SOCIETY: 23. The dissolution of the Society and adjustment of its affairs shall be in accordance with Sections 13 and 14 of the Act and in accordance with the provisions of any other law applicable thereto. AMENDMENT OF RULES: 24. These Rules may be amended by the member banks by a resolution passed in a general meeting of the member banks in which the votes cast in favour of the resolution is not less than twice the number of votes if any cast against it.