Improve customer service: FM to banks

Concerned over large complaints against private sector and foreign banks, Finance Minister Pranab Mukherjee today asked them to focus on improving customer service.

"It is heartening to know that as per the latest annual report of the Banking Ombudsman Scheme, the total number of customer complaints received by the Ombudsman in 2010-11 are 11 per cent less than the previous year," Mukherjee said.

"However, private sector and foreign banks which account for only 12 per cent of the rural deposits, contribute 35 per cent of the total complaints," he said.

This requires efforts on their part to redress the complaints, he said at a function here to open 100 branches of Kerala based Federal Bank simultaneously all over the country.

During 2010-11, 71,274 complaints were received under Banking Ombudsman Scheme against 79,266 in the previous fiscal.

As per the report, 6,895 complaints were against ICICI Bank and 5,590 against HDFC Bank. There were 2,144 complaints against Standard Chartered Bank, 1,865 against HSBC, 629 against Barclays Bank and 967 against Citibank N.A.

On the issue of subsidy transfer, Mukherjee said the government is in the process of implementing e-payment system for the direct credit of dues from the central government to the beneficiaries of various subsidies.

"I had announced in my Budget last year that e-payment system will bring transparency and expedite direct payment of subsidies to the targeted beneficiary of fertilisers, Kerosene and cooking gas. Banks have to gear themselves up for this path-breaking reforms," he said.

On financial inclusion, Mukherjee said public sector banks had been directed to provide banking services to areas with population of over 2,000 by March 2012.

"To the end of January 2012, we have covered nearly 63,000 villages, of the targeted 74,000 villages. I hope in the in the next few years we.cover all habitations over 1,000 population," he said.

Effective and efficient banking system is the backbone of the growing economy, he said, adding, "as we move ahead on the path of the development a major challenge is to strike a balance between the two objectives of increasing banking access and improving quality of customer service and customer protection."

Meanwhile, Federal Bank open 100 new branches at one go to take the total network to 938. The bank plans to raise the number of branches to 1,000 by mid-2012.

It is looking at a net-profit of Rs 700-800 crore in the current fiscal.

It recorded a net-profit of Rs 202 crore during the third quarter this fiscal, while the total business of the bank was about Rs 80,000 crore at the end of 2011.