Bank staff’s first duty is to meet needs of customers, not targets

Banks must ensure their employees understand that the primary responsibility is to serve a customers’ financial needs, while maintaining a focus on targets, said Swaminathan J, deputy governor, Reserve Bank of India.

While speaking to top executives of major banks on customer grievances, Swaminathan said banks should have a policy on customer appropriateness and product suitability framework to help reduce mis-selling.

“Being commercial entities, there’s nothing wrong in being target-driven, but regulated entities must ensure employees understand their primary responsibility is to serve customers’ financial needs.”

There should be a clear and transparent incentive structure that rewards employees for delivering quality financial advice and services rather than just making sales, he added.

He said banks should have adequate oversight whenever a product or service is offered in partnership with a fintech. Banks must view fintech as an opportunity and not a threat, Swaminathan added.

“I am glad that most of you have adopted such a collaborative approach, but please bear in mind the principal responsibility to your customers lies with you and not with partners. It is therefore essential to have adequate oversight when a product or service is being offered through such partnership channels.”