NPA Management

[Print Page]

F.1. Management of Non-Performing Assets has been one of the focus areas of the
Bank with the objective being to achieve the global benchmarks. Towards this goal,
the Bank has focused on
* Identification and monitoring of Special Mention Accounts as per the RBI guidelines
in order to check the slippages of standard assets to NPA
category by making prompt review and taking quick corrective action.
* Restructuring of impaired standard accounts as well as of viable non-performing
assets, both under the CDR scheme evolved by RBI as well
as under the Bank’s own scheme, for containing NPAs.
* Upgradation of assets at the whole bank level.
* High-value accounts and BIFR cases, especially in doubtful and loss categories
through the 9 specialised Rehabilitation and Recovery Branches

F.2. The Bank has performed well during the year by bringing the gross NPA and net
NPA ratios down from 9.34% and 4.5% respectively as on March 31, 2003 to 7.75%
and 3.48% respectively as on the 31st March 2004.

F.3. Cash recoveries of Rs.1,617 crore, upgradation of NPAs to standard assets of

Rs.958 crore and write-off of bad debts worth Rs.3,974 crore were achieved as on
March 31, 2004. The gross reduction till the end of March 2004 was Rs.6,549 crore,
but the overall reduction was affected by fresh slippages of Rs.5,721 crore.

F.4. Till March 31, 2004, 83 cases were referred for restructuring under the CDR
Scheme, in which the Bank had an aggregate exposure of Rs.6,749 crore. Out of
these cases, 51 cases with an exposure of Rs.4,895 crore were approved and 20
cases with an exposure of Rs.1,221 crore were under process.

F.5. The Bank issued notices under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 to 12,553 defaulting
borrowers, involving dues of Rs.5,114 crore and seized assets in respect of 381
cases. The Bank recovered an amount of Rs.130 crore and received offers for Rs.348
crore under one-time settlement of the dues.

F.6. The Bank aggressively implemented the guidelines issued by RBI in respect of
settlement of NPAs up to Rs.10 crore. Recoveries aggregating
Rs.245 crore were effected in 45,905 accounts under the scheme, out of the total
settlement of 63,232 cases, involving an amount of Rs.469 crore.

F.7. The Bank could successfully sell 76 financial assets worth Rs.570.35 crore to
Asset Reconstruction Company India Ltd. (ARCIL) till March 2004, thereby reducing
NPAs by Rs.191.21 crore and recording reversal of Assets Under Collection Account
(AUCA) to the tune of Rs.379.14 crore.

F.8. NPAs of Rs.5 crore and above are reviewed at regular intervals by the High Level
NPA Task Force at the Corporate Centre and NPAs of Rs.1 crore and above are
subjected to review by the Circle Management Committees at the LHOs. The NPA
position of the Bank is also reviewed by the Central Management Committee of the
Bank at monthly intervals.

NPA Management
[Print Page]

F.1. Management of Non-Performing Assets has been one of the focus areas of the
Bank with the objective being to achieve the global benchmarks. Towards this goal,
the Bank has focused on
* Identification and monitoring of Special Mention Accounts as per the RBI guidelines
in order to check the slippages of standard assets to NPA
category by making prompt review and taking quick corrective action.
* Restructuring of impaired standard accounts as well as of viable non-performing
assets, both under the CDR scheme evolved by RBI as well
as under the Bank’s own scheme, for containing NPAs.
* Upgradation of assets at the whole bank level.
* High-value accounts and BIFR cases, especially in doubtful and loss categories
through the 9 specialised Rehabilitation and Recovery Branches

F.2. The Bank has performed well during the year by bringing the gross NPA and net
NPA ratios down from 9.34% and 4.5% respectively as on March 31, 2003 to 7.75%
and 3.48% respectively as on the 31st March 2004.

F.3. Cash recoveries of Rs.1,617 crore, upgradation of NPAs to standard assets of

Rs.958 crore and write-off of bad debts worth Rs.3,974 crore were achieved as on
March 31, 2004. The gross reduction till the end of March 2004 was Rs.6,549 crore,
but the overall reduction was affected by fresh slippages of Rs.5,721 crore.

F.4. Till March 31, 2004, 83 cases were referred for restructuring under the CDR
Scheme, in which the Bank had an aggregate exposure of Rs.6,749 crore. Out of
these cases, 51 cases with an exposure of Rs.4,895 crore were approved and 20
cases with an exposure of Rs.1,221 crore were under process.

F.5. The Bank issued notices under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 to 12,553 defaulting
borrowers, involving dues of Rs.5,114 crore and seized assets in respect of 381
cases. The Bank recovered an amount of Rs.130 crore and received offers for Rs.348
crore under one-time settlement of the dues.

F.6. The Bank aggressively implemented the guidelines issued by RBI in respect of
settlement of NPAs up to Rs.10 crore. Recoveries aggregating
Rs.245 crore were effected in 45,905 accounts under the scheme, out of the total
settlement of 63,232 cases, involving an amount of Rs.469 crore.

F.7. The Bank could successfully sell 76 financial assets worth Rs.570.35 crore to
Asset Reconstruction Company India Ltd. (ARCIL) till March 2004, thereby reducing
NPAs by Rs.191.21 crore and recording reversal of Assets Under Collection Account
(AUCA) to the tune of Rs.379.14 crore.

F.8. NPAs of Rs.5 crore and above are reviewed at regular intervals by the High Level
NPA Task Force at the Corporate Centre and NPAs of Rs.1 crore and above are
subjected to review by the Circle Management Committees at the LHOs. The NPA
position of the Bank is also reviewed by the Central Management Committee of the
Bank at monthly intervals.

Banking Ombudsman Scheme 2006

Chapter I | Chapter II | Chapter III | Chapter IV | Chapter V
.......................................................................................................................................................................................
The Scheme is introduced with the object of enabling resolution of complaints relating to certain
services rendered by banks and to facilitate the satisfaction or settlement of such complaints.
CHAPTER I : PRELIMINARY
1. SHORT TITLE, COMMENCEMENT, EXTENT AND APPLICATION
(1) This Scheme may be called the Banking Ombudsman Scheme, 2006.

(2) It shall come into force on such date as the Reserve Bank may specify.

(3) It shall extend to the whole of India.

(4) The Scheme shall apply to the business in India of a bank as defined under the
Scheme.

2. SUSPENSION OF THE SCHEME

(1) The Reserve Bank, if it is satisfied that it is expedient so to do, may by order
suspend for such period as may be specified in the order, the operation of all or
any of the provisions of the Scheme, either generally or in relation to any specified
bank.

(2) The Reserve Bank may, by order, extend from time to time, the period of any
suspension ordered as aforesaid by such period, as it thinks fit.

3. DEFINITIONS

1. ‘award’ means an award passed by the Banking Ombudsman in accordance

with the Scheme.
2. ‘Appellate Authority’ means the Deputy Governor in charge of the
Department of the Reserve Bank implementing the Scheme.
3. ‘authorised representative’ means a person duly appointed and authorised
by a complainant to act on his behalf and represent him in the proceedings
under the Scheme before a Banking Ombudsman for consideration of his
complaint.
4. ‘Banking Ombudsman’ means any person appointed under Clause 4 of the
Scheme.
5. ‘bank’ means a ‘banking company’, a ‘corresponding new bank’, a ‘Regional
Rural Bank’, ‘State Bank of India’ a ‘Subsidiary Bank’ as defined in Section 5
of the Banking Regulation Act, 1949 (Act 10 of 1949), or a ‘Primary Co-
 operative Bank’ as defined in clause (c) of Section 56 of that Act and
included in the Second Schedule of the Reserve Bank of India Act, 1934 (Act
2 of 1934), having a place of business in India, whether such bank is
incorporated in India or outside India.
6. ‘complaint’ means a representation in writing or through electronic means
containing a grievance alleging deficiency in banking service as mentioned
in clause 8 of the Scheme.
7. ‘Reserve Bank’ means the Reserve Bank of India constituted by Section 3 of
the Reserve Bank of India Act, 1934 (2 of 1934).
8. ‘the scheme’ means the Banking Ombudsman Scheme, 2006.
9. ‘secretariat’ means the office constituted as per sub-clause (1) of clause 6
of the Scheme.

10. ‘settlement’ means an agreement reached by the parties either by

conciliation or mediation under clause 11 of the Scheme.
CHAPTER II : ESTABLISHMENT OF OFFICE OF BANKING OMBUDSMAN
4. APPOINTMENT & TENURE
(1) The Reserve Bank may appoint one or more of its officers in the rank of Chief
General Manager or General Manager to be known as Banking Ombudsmen to
carry out the functions entrusted to them by or under the Scheme.

(2) The appointment of Banking Ombudsman under the above Clause may be made
for a period not exceeding three years at a time.

5. LOCATION OF OFFICE AND TEMPORARY HEADQUARTERS

(1) The office of the Banking Ombudsman shall be located at such places as may
be specified by the Reserve Bank.

(2) In order to expedite disposal of complaints, the Banking Ombudsman may hold
sittings at such places within his area of jurisdiction as may be considered
necessary and proper by him in respect of a complaint or reference before him.

6. SECRETARIAT

(1) The Reserve Bank shall depute such number of its officers or other staff to the
office of the Banking Ombudsman as is considered necessary to function as the
secretariat of the Banking Ombudsman.

(2) The cost of the Secretariat shall be borne by the Reserve Bank.

CHAPTER III
JURISDICTION, POWERS AND DUTIES OF BANKING OMBUDSMAN

7. POWERS AND JURISDICTION

(1) The Reserve Bank shall specify the territorial limits to which the authority of
each Banking Ombudsman appointed under Clause 4 of the Scheme shall extend.

(2) The Banking Ombudsman shall receive and consider complaints relating to the
deficiencies in banking or other services filed on the grounds mentioned in clause 8
and facilitate their satisfaction or settlement by agreement or through conciliation
and mediation between the bank concerned and the aggrieved parties or by
passing an Award in accordance with the Scheme.

(3) The Banking Ombudsman shall exercise general powers of superintendence and
control over his Office and shall be responsible for the conduct of business thereat.

(4) The Office of the Banking Ombudsman shall draw up an annual budget for itself
in consultation with Reserve Bank and shall exercise the powers of expenditure
within the approved budget on the lines of Reserve Bank of India Expenditure
Rules, 2005.

(5) The Banking Ombudsman shall send to the Governor, Reserve Bank, a report,
as on 30th June every year, containing a general review of the activities of his
Office during the preceding financial year and shall furnish such other information
as the Reserve Bank may direct and the Reserve Bank may, if it considers
necessary in the public interest so to do, publish the report and the information
received from the Banking Ombudsman in such consolidated form or otherwise as
it deems fit.

CHAPTER IV :PROCEDURE FOR REDRESSAL OF GRIEVANCE

8. GROUNDS OF COMPLAINT

(1) A complaint on any one of the following grounds alleging deficiency in banking
or other services may be filed with the Banking Ombudsman having jurisdiction:

(a) non-payment or inordinate delay in the payment or collection of cheques,

drafts, bills etc.;

(b) non-acceptance, without sufficient cause, of small denomination notes tendered

for any purpose, and for charging of commission in respect thereof;

(c) non-acceptance, without sufficient cause, of coins tendered and for charging of
commission in respect thereof;

(d) non-payment or delay in payment of inward remittances ;

(e) failure to issue or delay in issue of drafts, pay orders or bankers’ cheques;

(f) non-adherence to prescribed working hours ;

(g) failure to honour guarantee or letter of credit commitments ;

(h) failure to provide or delay in providing a banking facility (other than loans and
advances) promised in writing by a bank or its direct selling agents;

(i) delays, non-credit of proceeds to parties' accounts, non-payment of deposit or

non-observance of the Reserve Bank directives, if any, applicable to rate of interest
on deposits in any savings, current or other account maintained with a bank ;

(j) delays in receipt of export proceeds, handling of export bills, collection of bills
etc., for exporters provided the said complaints pertain to the bank's operations in
India;

(k) complaints from Non-Resident Indians having accounts in India in relation to

their remittances from abroad, deposits and other bank-related matters;

(l) refusal to open deposit accounts without any valid reason for refusal;

(m) levying of charges without adequate prior notice to the customer;

(n) non-adherence by the bank or its subsidiaries to the instructions of Reserve

Bank on ATM/Debit card operations or credit card operations;

(o) non-disbursement or delay in disbursement of pension (to the extent the

grievance can be attributed to the action on the part of the bank concerned, but
not with regard to its employees)

(p) refusal to accept or delay in accepting payment towards taxes, as required by

Reserve Bank/Government;

(q) refusal to issue or delay in issuing, or failure to service or delay in servicing or

redemption of Government securities;

(r) forced closure of deposit accounts without due notice or without sufficient
reason;

(s) refusal to close or delay in closing the accounts;

(t) non-adherence to the fair practices code as adopted by the bank; and

(u) any other matter relating to the violation of the directives issued by the Reserve
Bank in relation to banking or other services.

(2) A complaint on any one of the following grounds alleging deficiency in banking
service in respect of loans and advances may be filed with the Banking
Ombudsman having jurisdiction:

(a) non-observance of Reserve Bank Directives on interest rates;

(b) delays in sanction, disbursement or non-observance of prescribed time

schedule for disposal of loan applications;

(c) non-acceptance of application for loans without furnishing valid reasons to the
applicant; and

(d) non-observance of any other direction or instruction of the Reserve Bank as

may be specified by the Reserve Bank for this purpose from time to time.

(3) The Banking Ombudsman may also deal with such other matter as may be
specified by the Reserve Bank from time to time in this behalf.

9. PROCEDURE FOR FILING COMPLAINT

(1) Any person who has a grievance against a bank on any one or more of the
grounds mentioned in Clause 8 of the Scheme may, himself or through his
authorised representative (other than an advocate), make a complaint to the
Banking Ombudsman within whose jurisdiction the branch or office of the bank
complained against is located.

Provided that a complaint arising out of the operations of credit cards, shall be filed
before the Banking Ombudsman within whose territorial jurisdiction the billing
address of the card holder is located and not the place where the bank concerned
or the credit card processing unit is located.

(2) (a) The complaint in writing shall be duly signed by the complainant or his
authorized representative and shall be, as far as possible, in the form specified in
Annexure ‘A’ or as near as thereto as circumstances admit, stating clearly:

(i) the name and the address of the complainant,

(ii) the name and address of the branch or office of the bank against which the
complaint is made,

(iii) the facts giving rise to the complaint,

(iv) the nature and extent of the loss caused to the complainant, and

(v) the relief sought for .

(b) The complainant shall file along with the complaint, copies of the documents, if
any, which he proposes to rely upon and a declaration that the complaint is
maintainable under sub-clause (3) of this clause.

(c) A complaint made through electronic means shall also be accepted by the
Banking Ombudsman and a print out of such complaint shall be taken on the record
of the Banking Ombudsman.

(d) The Banking Ombudsman shall also entertain complaints covered by this
Scheme received by Central Government or Reserve Bank and forwarded to him for
disposal.

(3) No complaint to the Banking Ombudsman shall lie unless:-

(a) the complainant had, before making a complaint to the Banking Ombudsman,
made a written representation to the bank and the bank had rejected the complaint
or the complainant had not received any reply within a period of one month after
the bank received his representation or the complainant is not satisfied with the
reply given to him by the bank;

(b) the complaint is made not later than one year after the complainant has
received the reply of the bank to his representation or, where no reply is received,
not later than one year and one month after the date of the representation to the
bank;

(c) the complaint is not in respect of the same subject matter which was settled or
dealt with on merits by the Banking Ombudsman in any previous proceedings
whether or not received from the same complainant or along with one or more
complainants or one or more of the parties concerned with the subject matter;

(d) the complaint does not pertain to the same subject matter, for which any
proceedings before any court, tribunal or arbitrator or any other forum is pending
or a decree or Award or order has been passed by any such court, tribunal,
arbitrator or forum;

(e) the complaint is not frivolous or vexatious in nature; and

(f) the complaint is made before the expiry of the period of limitation prescribed
under the Indian Limitation Act, 1963 for such claims.

10. POWER TO CALL FOR INFORMATION

(1) For the purpose of carrying out his duties under this Scheme, a Banking
Ombudsman may require the bank against whom the complaint is made or any
other bank concerned with the complaint to provide any information or furnish
certified copies of any document relating to the complaint which is or is alleged to
be in its possession.

Provided that in the event of the failure of a bank to comply with the requisition
without sufficient cause, the Banking Ombudsman may, if he deems fit, draw the
inference that the information if provided or copies if furnished would be
unfavourable to the bank.

(2) The Banking Ombudsman shall maintain confidentiality of any information or

document that may come into his knowledge or possession in the course of
discharging his duties and shall not disclose such information or document to any
person except with the consent of the person furnishing such information or
document.

Provided that nothing in this clause shall prevent the Banking Ombudsman from
disclosing information or document furnished by a party in a complaint to the other
party or parties to the extent considered by him to be reasonably required to
comply with any legal requirement or the principles of natural justice and fair play
in the proceedings.

11. SETTLEMENT OF COMPLAINT BY AGREEMENT

(1) As soon as it may be practicable to do, the Banking Ombudsman shall send a
copy of the complaint to the branch or office of the bank named in the complaint,
under advice to the nodal officer referred to in sub-clause (3) of clause 15, and
endeavour to promote a settlement of the complaint by agreement between the
complainant and the bank through conciliation or mediation.

(2) For the purpose of promoting a settlement of the complaint, the Banking
Ombudsman may follow such procedure as he may consider just and proper and he
shall not be bound by any rules of evidence.

(3) The proceedings before the Banking Ombudsman shall be summary in nature.

12. AWARD BY THE BANKING OMBUDSMAN

(1) If a complaint is not settled by agreement within a period of one month from
the date of receipt of the complaint or such further period as the Banking
Ombudsman may allow the parties, he may, after affording the parties a
reasonable opportunity to present their case, pass an Award or reject the
complaint.

(2) The Banking Ombudsman shall take into account the evidence placed before
him by the parties, the principles of banking law and practice, directions,
instructions and guidelines issued by the Reserve Bank from time to time and such
other factors which in his opinion are relevant to the complaint.

(3) The award shall state briefly the reasons for passing the award.

(4) The Award passed under sub-clause (1) shall specify the amount, if any, to be
paid by the bank to the complainant by way of compensation for the loss suffered
by him and may contain any direction to the bank.

(5) Notwithstanding anything contained in sub-clause (4), the Banking Ombudsman

shall not have the power to pass an award directing payment of an amount which
is more than the actual loss suffered by the complainant as a direct consequence
of the act of omission or commission of the bank, or ten lakh rupees whichever is
lower.

(6) In the case of complaints arising out of credit card operations, the Banking
Ombudsman shall, while determining the amount of compensation payable, take
into account the loss of the complainant’s time, expenses incurred by the
complainant, financial loss, harassment and mental anguish suffered by the
complainant.

(7) A copy of the Award shall be sent to the complainant and the bank.

(8) An Award shall not be binding on a bank against which it is passed unless the
complainant furnishes to it, within a period of 15 days from the date of receipt of
copy of the Award, a letter of acceptance of the Award in full and final settlement
of his claim in the matter. If the complainant does not accept the Award passed by
the Banking Ombudsman or fails to furnish his letter of acceptance within the said
period of 15 days or within such further time not exceeding a period of fifteen days
that may be granted by the Banking Ombudsman, the Award shall lapse and be of
no effect.

(9) The bank shall within one month from the date of receipt by it of the
acceptance in writing of the Award by the complainant under sub-clause (8), or
within such time not exceeding a period of fifteen days that may be granted by the
Banking Ombudsman, comply with the Award and intimate compliance to the
Banking Ombudsman.

13. REJECTION OF THE COMPLAINT

(1) The Banking Ombudsman may reject a complaint at any stage if it appears to
him that the complaint made is;

(a) frivolous, vexatious, malafide; or

(b) without any sufficient cause; or

(c) that it is not pursued by the complainant with reasonable diligence; or

(d) in the opinion of the Banking Ombudsman there is no loss or damage or

inconvenience caused to the complainant; or

(e) beyond the pecuniary jurisdiction of Banking Ombudsman prescribed under

clause 12(5).

(2) The Banking Ombudsman may reject a complaint at any stage if after
consideration of the complaint and evidence produced before him the Banking
Ombudsman is of the opinion that the nature of the complaint requires
consideration of elaborate documentary and oral evidence and the proceedings
before the Banking Ombudsman are not appropriate for adjudication of such
complaint. The decision of the Banking Ombudsman in this regard shall be final and
binding on the complainant and the bank.

14. APPEAL BEFORE THE APPELLATE AUTHORITY:

(1) Any person aggrieved by the Award may, within 45 days of the date of receipt
of the Award, prefer an appeal against the Award before the Appellate Authority;

Provided that the Appellate Authority may, if he is satisfied that the applicant had
sufficient cause for not making the appeal within time, allow a further period not
exceeding 30 days;

Provided further that the appeal may be filed by the bank only with the previous
sanction of the Chairman or, in his absence, the Managing Director or the Executive
Director or the Chief Executive Officer or any other officer of equal rank.

(2) The Appellate Authority shall, after giving the parties a reasonable opportunity
of being heard

(a) dismiss the appeal; or

(b) allow the appeal and set aside the Award; or

(c) remand the matter to the Banking Ombudsman for fresh disposal in accordance
with such directions as the Appellate Authority may consider necessary or proper;
or

(d) modify the Award and pass such directions as may be necessary to give effect
to the Award so modified; or

(e) pass any other order as it may deem fit.

(3) The order of the Appellate Authority shall have the same effect as the Award
passed by Banking Ombudsman under clause 12 or the order rejecting the
complaint under clause 13, as the case may be.

15. BANKS TO DISPLAY SALIENT FEATURES OF THE SCHEME FOR

COMMON KNOWLEDGE OF PUBLIC.

(1) The banks covered by the Scheme shall ensure that the purpose of the Scheme
and the name and address of the Banking Ombudsman to whom the complaints
are to be made by the aggrieved party are displayed prominently in all the offices
and branches of the bank in such manner that a person visiting the office or branch
has adequate information of the Scheme.

(2) The banks covered by the Scheme shall ensure that a copy of the Scheme is
available with the designated officer of the bank for perusal in the office premises
of the bank if anyone desires to do so and notice about the availability of the
Scheme with such designated officer shall be displayed along with the notice under
sub-clause (1) of this clause.

(3) The banks covered by the Scheme shall appoint Nodal Officers at their
Regional/Zonal Offices and inform the respective Office of the Banking Ombudsman
under whose jurisdiction the Regional/Zonal Office falls. The Nodal Officer so
appointed shall be responsible for representing the bank and furnishing information
to the Banking Ombudsman in respect of complaints filed against the bank.

CHAPTER V :MISCELLANEOUS

16. REMOVAL OF DIFFICULTIES

If any difficulty arises in giving effect to the provisions of this Scheme, the Reserve
Bank may make such provisions not inconsistent with the Banking Regulation Act,
1949 or the Scheme, as it appears to it to be necessary or expedient for removing
the difficulty.

17. APPLICATION OF THE BANKING OMBUDSMAN SCHEMES, 1995 AND

2002
The adjudication of pending complaints and execution of the Awards already
passed, before coming into force of the Banking Ombudsman Scheme, 2006, shall
continue to be governed by the provisions of the respective Banking Ombudsman
Schemes and instructions of the Reserve Bank issued thereunder.
Address and Area of Operation of Banking Ombudsman
Centre Contact details of the Area of
Office of Banking Operation
Ombudsman
C/o Reserve Bank of India Gujarat,
Union
Ahmedabad La Gajjar Chambers, Territories
of Dadra
Ashram Road, and Nagar
Haveli,
Daman and
Ahmedabad-380 009 Diu

Tel.No.079- 26582357, 079-

26586718

Fax No.079-26583325

email: bogujarat@rbi.org.in
Bangalore C/o Reserve Bank of India Karnataka

10/3/8, Nrupathunga Road

Bangalore-560 001

Tel.No.080-22210771, 080-
22275629

Fax No.080-22244047

email:
bobangalore@rbi.org.in
Bhopal C/o Reserve Bank of India Madhya
Pradesh
Hoshangabad Road, and
Chattisgarh
Post Box No.32,

Bhopal-462 011

Tel.No.0755-2573772, 0755-
2573776

Fax No.0755-2573779

email: bobhopal@rbi.org.in
C/o Reserve Bank of India

Bhubaneswar Pt. Jawaharlal Nehru Marg Orissa

Bhubaneswar-751 001

Tel.No.0674-2396207, 0674-
2396008

Fax No.0674-2393906

email:bobhubaneswar@rbi.o
rg.in
Chandigarh C/o Reserve Bank of India Himachal
Pradesh,
New Office Building Punjab and
Union
Sector-17, Central Vista Territory of
Chandigarh
Chandigarh-160 017

Tel.No.0172-2721109, 0172-
2721011

Fax No.0172-2721880

email:
bochandigarh@rbi.org.in
Chennai C/o Reserve Bank of India, Tamil
Nadu, Union
 Territories
Fort Glacis, of
Pondicherry
Chennai 600 001 and
Andaman
and Nicobar
Tel No.044-25399170, 044- Islands
25395964

Fax No.044-25395488

email: bochennai@rbi.org.in
Guwahati C/o Reserve Bank of India Assam,
Arunachal
Station Road, Pradesh,
Manipur,
Pan Bazar Meghalaya,
Mizoram,
Nagaland
Guwahati-781 001 and Tripura

Tel.No.0361-2542556, 0361-
2540445

Fax No.0361-2540445

email: boguwahati@rbi.org.in
Hyderabad C/o Reserve Bank of India Andhra
Pradesh
6-1-56, Secretariat Road

Saifabad,

Hyderabad-500 004

Tel.No.040-23210013, 040-
23243970

Fax No.040-23210014

email:
bohyderabad@rbi.org.in
Jaipur C/o Reserve Bank of India, Rajasthan

Ram Bagh Circle,

Tonk Road, Post Box No.12,

Jaipur-302 004

Tel.No.0141-2570357/0141-
2570392
 Fax No.0141-2562220

email: bojaipur@rbi.org.in
Kanpur C/o Reserve Bank of India Uttar
Pradesh
M.G. Road, Post Box No.82 (excluding
District of
Kanpur-208 001 Ghaziabad)
and
Uttaranchal
Tel.No.0512-2361191/0512-
2310593

Fax No.0512-2362553

email: bokanpur@rbi.org.in
Kolkata C/o Reserve Bank of India West
Bengal and
15, Nethaji Subhas Road Sikkim

Kolkata-700 001

Tel.No.033-22306222/033-
22305580

Fax No.033-22305899

email: bokolkata@rbi.org.in
Mumbai C/o Reserve Bank of India Maharashtr
Garment House, a and Goa

Ground Floor,

Dr. Annie Besant Road,

Worli, Mumbai-400 018

Tel.No.022-24924607/022-
24960893

Fax No.022-24960912

email: bomumbai@rbi.org.in
New Delhi Jeevan Bharati Building Delhi,
Haryana,
Tower No.1, 7th Floor Jammu and
Kashmir
124 Connaught Circus and
Ghaziabad
district of
Uttar
 Pradesh
New Delhi-110 011

Tel.No.011-23725445/011-
23710882

Fax No.011-23725218

email: bonewdelhi@rbi.org.in
Patna ‘Biscomaun Towers’, Bihar and
Jharkhand
2nd Floor,

West Gandhi Maidan

Patna-800 001

Tel.No.0612-2201734/0612-
2206308

Fax No.0612-2320407

email: bopatna@rbi.org.in
Thiruvananthapur C/o Reserve Bank of India Kerala and
am Union
Bakery Junction Territory of
Lakshadwee
Thiruvananthapuram-695 p
033

Tel.No.0471-2332723/0471-
2329676

Fax No.0471-2321625

email:
bothiruvananthapuram@rbi.o
rg.in

Know Your Customer Standards and Anti-Money Laundering Measures

......................................................................................................................................................................................

1 Preamble :In terms of the guidelines issued by the Reserve Bank of India on the 29th
 November, 2004 on Know Your Customers (KYC) Standards - Anti Money Laundering
(AML) Measures, banks are required to put in place a comprehensive policy framework
covering KYC Standards and AML Measures. The guidelines issued by the Reserve
Bank of India take into account the recommendations made by the Financial Action Task
Force (FATF), an inter governmental agency, on AML Standards and on combating
financing of terrorism. The guidelines also incorporate aspects covered in the Basel
Committee document on customer due diligence which is a reflection of the international
financial community's resolve to assist law enforcement authorities in combating
financial crime. This policy document is prepared in line with the RBI guidelines and
incorporate the Bank's approach to customer identification procedures, customer
profiling based on the risk perception and monitoring of transactions on an ongoing
basis.
2 Definition of Money Laundering :Section 3 of the Prevention of Money Laundering
(PML) Act, 2002 has defined the "Offence of money laundering as under :-

"Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly

is a party or is actually involved in any process or activity connected with the
proceeds of crime and projecting it as untainted property shall be guilty of offence of
money laundering."

Money launderers use the banking system for cleansing 'dirty money' obtained from
criminal activities with the objective of hiding/disguising its source. The process of
money laundering involves creating a web of financial transactions so as to hide the
origin and true nature of these funds.

For the purpose of this document, the term money laundering would also cover financial
transactions where the end use of funds goes for terrorist financing irrespective of the
source of the funds.
3 Obligations under Prevention of Money Laundering (PML) Act, 2002
Section 12 of PML Act, 2002 places certain obligations on every banking company,
financial institution and intermediary, which include.

• maintaining a record of prescribed transactions-

• furnishing information of prescribed transactions to the specified authority
• verifying and maintaining records of the identity of its clients.
• preserving records in respect of (i), (ii) (iii) above for a period of ten years from
the date of cessation of transaction with the clients.

These requirements would come into effect after Govt. of India frames rules under the
Act.
4 Money Laundering - Risk Perception: Money Laundering activities expose the Bank to
various risks such as operational risks, reputation risk, compliance risk and legal risk.
5 Policy Objectives
• To prevent criminal elements from using the Banking System for money
laundering activities.
• To enable the Bank to know / understand the customers and their financial
dealings better, which in turn would help the Bank to manage risks prudently.
• To put in place appropriate controls for detection and reporting of suspicious
activities in accordance with applicable laws/laid down procedures.
• To comply with applicable laws and regulatory guidelines.
• To take necessary steps to ensure that the concerned staff are adequately
trained in KYC/AML Procedures.
6 Scope :This policy is applicable to all branches/offices of the Bank and is to be read in
 conjunction with related operational guidelines issued from time to time.
7 Definition of a Customer :A customer for the purpose of this policy is defined as :

• A person or an entity that maintains an account and/or has a business

relationship with the Bank.
• One on whose behalf the account is maintained (i.e. the beneficial owner).
• Beneficiaries of transactions conducted by professional intermediaries such as
Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the
law, and
• any person or entity connected with a financial transactions.
8 Key Elements of the Policy :

• Customer Acceptance Policy

• Customer Identification Procedures
• Monitoring of Transactions; and
• Risk Management
8.1 Customer Acceptance Policy The Bank will :

• classify customers into various risk categories and based on risk perception
decide on acceptance criteria for each category of customers;
• accept customers after verifying their identity as laid down in Customer
Identification Procedures;
• Not open accounts in the name of anonymous/fictitious/benami persons;
• strive not to inconvenience the general public, especially those who are
financially or socially disadvantaged.
8.2 Customer Identification Procedures :The first requirement of customer identification
procedures is to be satisfied that a prospective customer is who he/she claims to be.

The second requirement of customer identification procedures is to ensure that

sufficient information is obtained on the nature of the business that the customers
expects to undertake and any expected or predictable pattern of transactions.

The information collected will be used for profiling the customer.

Identity to be verified for :-

• The named account holder

• Beneficial owners
• Signatories to an account and
• Intermediate parties.
The Customer Identification Procedures are to be carried out at the following stages

• While establishing a banking relationship

• when the Bank feels it is necessary to obtain additional information from the
existing customers based on the conduct or behavior of the account.

Wherever applicable, information on the nature or business activity, location, mode of

payments, volume of turnover, social and financial status etc. will be collected for
completing the profile of the customer.

Customers will be classified into three risk categories namely High Medium and Low,
based on the risk perception. The risk categorization will be reviewed periodically.
 Customer Identification will be carried out in respect of non-account holders approaching
bank for high value one-off transaction as well as any person or entity connected with a
financial transaction which can pose significant reputational or other risks to the Bank.
8.3 Monitoring of Transactions : Monitoring of transactions will be conducted taking into
consideration the risk profile of the account. Special attention will be paid to all
complex, unusually large transactions and all unusual patterns which have no apparent
economic or visible lawful purpose. Transactions that involve large amounts of cash
inconsistent with the normal and expected activity of the customer will be subjected to
detailed scrutiny.

After due diligence at the appropriate level in the Bank, transactions of suspicious
nature and/or any other type of transaction notified under PML Act, 2002 will be
reported to the appropriate authority and a record of such transactions will be
preserved and maintained for a period as prescribed in the Act.
8.4 Risk Management :While the Bank has adopted a risk based approach to the
implementation of this policy. It is necessary to establish appropriate framework covering
proper management oversight, systems, controls and other related matters.

Bank's Internal Audit of compliance with KYC/AML Policy will provide an independent
evaluation of the same including legal and regulatory requirements. Concurrent/Internal
Auditors shall specifically check and verify the application of KYC/AML procedures at the
branches and comment on the lapses observed in this regard. The compliance in this
regard will be placed before the Audit Committee of the Board at quarterly intervals.

All employees training programmes will have a module on KYC Standards - AML
Measures so that members of the staff are adequately trained in KYC/AML procedures.

The Principal Officer designated by the Bank in this regard will have an important
responsibility in managing oversight and coordinating with various functionaries in the
implementation of KYC/AML Policy.
9 Customer Education :The Bank recognizes the need to spread awareness on KYC,
Anti Money Laundering measures and the rationale behind them amongst the customers
and shall take suitable steps for the purpose.
10 Introduction of New Technologies : Bank will pay special attention to the money
laundering threats arising from new or developing technologies and take necessary
steps to prevent its misuse for money laundering activities. Bank will ensure that
appropriate KYC Procedures are duly applied to the customers using the new
technology driven products.
11 KYC for the existing accounts :While the KYC guidelines will apply to all new
customers, the same would be applied to the existing customers on the basis of
materiality and risk. However, transactions in existing accounts would be continuously
monitored for any unusual pattern in the operation of the accounts. On the basis of
materiality and risk the existing accounts of companies, firms, trusts, charities, religious
organizations and other institutions are subjected to minimum KYC standards which
would establish the identity of the natural/legal person and those of the 'beneficial
owners' Similarly, the Bank will also ensure that term/recurring deposit accounts are
subject to revised KYC procedures at the time of renewal of the deposits on the basis of
materiality and risk.
12 Branches and subsidiaries outside India :This policy shall also apply to the branches,
subsidiaries and majority owned joint ventures located abroad to the extent local laws
permit. Based on this policy, each foreign office is required to put in place an Anti Money
Laundering Policy (duly approved), which shall also contain, the KYC guidelines and
Suspicious Activity Reporting (SAR) Procedures as may be required by the rules and
 regulations of the host country.
13 Correspondent Banking :This Policy will apply to our dealings with correspondent
banks. For correspondent banking relationship an appropriate due diligence procedure
will be laid down keeping in view KYC Standards existing in the country where the
correspondent bank is located and the track record of the correspondent bank in the
fight against money laundering and terrorist financing.
14 Principal Officer (Money Laundering Reporting Officer) :Bank will designate a senior
officer as Principal Officer who shall be responsible for implementation of and
compliance with this policy.

His illustrative duties will be as follows -

•
Monitoring the implementation of the Bank's KYC/AML Policy.
•
Reporting of Transactions and sharing of the information as required under the
law.
• Maintaining liaison with law enforcement agencies.
• Ensuring submission of periodical reports to the Top Management/Board.
15 Review of the Policy :The Policy will be reviewed at yearly intervals or as and when
considered necessary by the Board.

Grievances Redressal System :Customer Service & Care Department

Addresses of the Nodal Officers
.......................................................................................................................................................................................
State Bank of Bikaner and Jaipur's Policy on Customer Grievance Redressal is based on the
following principles:
i. All initiatives and strategies of the Bank will have customer as its prime focus.
ii. Prompt and efficient customer service is essential for business growth.
iii.A suitable mechanism must exist for receiving and redressing customer grievances. The
details of grievance redressal mechanism are to be placed in the public domain. All
grievances must be dealt with promptly and courteously. Any mistakes made by the Bank will
be rectified immediately.

The above principles have been incorporated into the Bank's Policy on Grievance Redressal.

I. Grievances relating to branch transactions:

(i.) In case of any difficulty in transactions, the customers may approach the officer
concerned or the Manager of the Division or the Branch Manager, who will ensure that the
customers' banking needs are attended to. However, if this does not happen, customers may
demand the complaint book, which will be available at all branches, and lodge a written
complaint. A copy of the 'complaint' shall be handed over to the customer, duly
acknowledged. The branch shall make efforts to ensure that the redressal of the complaint
takes place expeditiously and in any case within a maximum period of three weeks. If for any
reason the branch is unable to redress the grievance within three weeks, the customer will be
informed of the reasons and the action taken for early redressal.

(ii.) In case of difficulty experienced at the branch, or unsatisfactory reply in respect of

complaint lodged with the Branch, the customer can approach the Assistant General
Manager/ Deputy General Manager of the Regional/ Zonal Office under whose administrative
control the Branch functions. The contact particulars of the Regional/ Zonal Office may be
obtained from the Branch or from the Help line at the concerned Regional/ Zonal Office. The
Help line number(s) will also be made available on the Bank's website.
(iii.) The customer may also write to Regional/ Zonal Office under whose jurisdiction the
Branch functions. The addresses and contact details of the Assistant General Manager/
Deputy General Manager of the Regional/ Zonal Office are available at the branches.
Customers may also obtain them by calling the Help line.
II. Grievances relating to technology related transactions
(i.)Considering customers' expectations, lack of familiarity and the need for broadening the
customer base, Bank may consider introduction of exclusive mechanism for redress of
grievances arising from use of alternate channels. Presently, an exclusive toll free Help line
1800-112-211 has been made available for A.T.M. related matters.Customers may also
contact the nearest card issuing branch or e-mail contactcentre@sbi.co.in for redressal of
their complaints. In case the customer is not satisfied with the handling of his/her complaint,
he/she may contact the Deputy General Manager (ITS) at Head Office, at Jaipur. The contact
details/e-mail address will be made available on the Bank's web site.

(ii.)For assistance in Internet Banking transactions, the customer may contact the same Help
line as for ATM card transactions. He may also post his grievance online on the Bank's
Internet banking web site at www.sbbjonline.com. The system will generate a 'ticket number,'
immediately on a grievance being posted "on-line." The customer can track the 'status' of his
grievance using the unique identification number / ticket number.
III. Nodal Officer for handling customer grievances:
Our Bank has identified General Manager (Planning & Development), at Head Office level as
the Nodal Officer, who will be responsible for the implementation of customer service and
complaint handling for the entire bank. The Chief Manager (DGM's Sectt.) at all Zonal Offices
will handle complaints/grievances in respect of branches under their administrative control.
IV. Acknowledgement of grievances and redressal:
(i.)The Regional office, Zonal Office or the Head Office; as the case may be, will
acknowledge the receipt of grievance(s) within five days of receipt and initiate action towards
resolution of the grievance(s) within a maximum period of three weeks. The customer will be
kept informed of the action taken, the reasons for delay, if any, in redressal and the progress
in redressal of grievance(s).

(ii.)In case a customer is unhappy with the service or redressal provided by the bank, he/she
may also approach the Banking Ombudsman located at State Capitals for redressal. The
customer will be given the necessary guidance in this regard by the branches and the Help
line(s). The contact details of the Banking Ombudsman of the respective region are on
display at each branch.
V. Review Mechanism:
(1.)Managing Director
The redressal of customer grievances takes place mainly at three levels - Branch,
Regional/Zonal office and Head Office. A large number of grievances are addressed by
customers directly to the Managing Director. Where the issues raised in the grievance is
considered serious, the Managing Director shall call for a report on the causes that led to the
grievance, the redressal thereof and further action taken. Such grievances will stand
'disposed off,' only on specific approval from the Managing Director.
(2.)Bank's Board
An analysis of customer grievances received and review of grievance redressal mechanism
shall be placed before the Bank's Board of Directors every Quarter. A similar review will be
carried out at the Bank's seven Zonal Offices, in respect of grievances received from
customers in their area of Operation. Directors may also bring to the notice of the Bank
grievances if any, brought to their notice.
(3.)Customer Service Committee of the Board
The Customer Service Committee of the Board shall also periodically review major areas of
customer grievances and measures taken to improve customer service. The Committee will
examine issues that have a bearing on the quality of service provided to individual depositors
 and borrowers. This Committee will also review the functioning of the Standing Committee on
Customer Service.
(4.)Standing Committee on Customer Service
The Standing Committee on Customer Service will be chaired by the Chief General Manager.
The other members of the committee will be Senior Executives from the Bank and customers
of the Bank. The committee will review feedback on customer service and implementation of
commitments in the BCSBI's Code of Bank’s Commitments to Customers and customer
grievances relating to non implementation of the code. The other functions of the Standing
Committee shall be as directed by RBI.
VI. Pre-empting occurrence of customer grievances:
Customer grievances provide valuable feedback on the quality of service at branches and
whether the initiatives taken by Bank in technology and re-engineering of business processes
are having the desired impact on business growth and improved customer satisfaction. The
Bank also understands the importance of sensitizing staff to handling customer transactions /
requests with courtesy, empathy and promptness. Customer Relations Programmes shall be
organized at all branches at least once every quarter where staff and customers meet and
interact freely on service related issues. Branch level Customer Service Committee should
meet at least once a month and it will comprise of Branch Head, Head Cashier, Clerk,
Cashier, Subordinate staff and Customers of the Bank (including a senior citizen). While
these shall be structured meets, the customers will also be free to meet the Branch Manager/
other Officials at Administrative Offices to discuss their grievances. The Bank shall also
conduct training programmes regularly for staff on customer service and for minimizing
customer grievances. The Bank shall also conduct periodical customer satisfaction surveys to
understand customers' perceptions of our Bank's service and to identify priority areas, which
need improvement.

Compensation Policy (w.e.f. 16.06.2009)

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Introduction
Technological progress in payment and settlement systems and qualitative changes in
operational systems and processes undertaken by various players in the market have
improved efficiencies for providing better service to the users of the system. It has been the
endeavor of the Bank to offer services to its customers with best possible utilization of its
technology infrastructure. Migration of all branches of the Bank to Core Banking Solution
(CBS) platform is a great leap in this direction. Reserve Bank of India has also been issuing
various instructions/guidelines, from time to time, with a view to improving the level of
customer service available to the customers of the banking industry and also to empower the
banks to promote efficient service. Towards this end, RBI has also withdrawn the instructions
to banks on time frame for collection of outstation cheques, payment of interest on delayed
collection of outstation cheques/instruments etc. Accordingly, in order to increase efficiency
of operations/better performance and to compensate adequately any customer who faces
deficiency in services, the Compensation Policy for the Bank has been formulated.
Objective
The objective of the policy, namely "State Bank of Bikaner and Jaipur Compensation Policy
(Banking Services)" (hereinafter called the Policy), is to establish a system whereby the Bank
compensates the customer due to deficiency in service on the part of the Bank or any act of
omission or commission, directly attributable to the Bank.
Scope
(a) The Policy will be applicable to all banking service customers of the Bank.

(b) The Policy is based on principles of transparency and fairness in the treatment of
customers. It is designed to cover deficiency in service in areas relating to account
operations, collections and remittances etc., as specified in this Policy.

(c) Grant of compensation under this Policy is without prejudice to the Bank's rights in
defending its position before any Court of Law, Tribunal or any other forum duly constituted to
adjudicate banker-customer disputes and does not constitute admission of liability or any
other issue, of any nature whatsoever for the purposes of Adjudicatory proceedings. .