Monday, July 15

10 Interesting Facts about Indian Banks

This write-up will introduce you to some interesting facts about Indian banks and the banking system. The Indian Banking System has users around the globe. It has a rich history and currently has stood as the backbone of the nation and its government through thick and thin. 

Reserve Bank of India (RBI) governs all banks in India (these include both nationalized and private banks). The RBI has laid out a series of rules for ensuring that all Indian banks can provide customers with a friendly banking experience. While users are aware of most of those Indian bank facts, there are also some lesser-known regulations related to banking transactions and services. 

The section below would introduce you to several interesting facts about the history of Indian banks and also provide you information on some unique banking regulations followed by the country’s banks. 

Interesting Information about the History of Indian Banks

  • About Nationalization of Indian Banks

    The country witnessed the first nationalization of its banks on 19th July 1969. The country was under the rule of Prime Minister Indira Gandhi at that time. The government under Ms. Gandhi decided to nationalize 14 banks at one go. The next nationalization of banks took place after 11 years (on 15th April 1980 to be more precise). A total of 6 banks got nationalized at this time. It was again Mrs. Gandhi, who lead the nationalization drive.

  • About Banking Ombudsman Scheme 2006

    This banking ombudsman scheme got introduced under Section 35A of the Indian Banking Regulation Act of 1949. The Reserve Bank of India announced that the new scheme will take effect from 14th June 1995 and will play an instrumental role in offering appropriate solutions to customer complaints. The banking ombudsman is an RBI-appointed administrator and is responsible for supervising all rural banks, scheduled cooperative banks, and scheduled commercial banks.  

  • Commercial Banks of India

     

Commercial Banks in India

India is home to several commercial banks. In India, a commercial bank is a revenue-seeking institution that accepts deposits made by the public; and gives loans to individuals aiming at earning profits through commissions, interests, etc.
The RBI classifies commercial banks of the country into two types, non-scheduled and scheduled. To be classified as a scheduled bank, a bank will have to meet the following criteria:

    • The combined value of its funds and capital should be a minimum of Rs. 5 lakhs. 
    • The bank must succeed in convincing the RBI that none of its regulations and modes of operation will ever be detrimental to the consumers’ interest.
    • The bank must be a corporation. Organizations owned by a single individual or run in partnership will not qualify as a scheduled commercial bank.

Scheduled banks enjoy a series of privileges. These include concessional or free borrowing and remittance facilities from the Reserve Bank of India.

Interesting Information about RBI Regulations followed by the Indian Banks

  • There’s No Restriction on Transfer of Accounts Between Bank Branches

    Suppose, you are planning to relocate to a different Indian city or looking to move to a new location in the city you are already living in.  One of the main jobs you have in hand in such situations is transferring bank accounts. The RBI had made sure that the process remains absolutely hassle-free for the consumers. It will allow you to transfer your bank accounts to your nearest branches without any restraints. 

The RBI regulations require every bank to provide customers with the option of bank account portability. However, for that, the customers will need to meet the bank’s KYC (Know Your Customer) norms. The process of account portability involves minimum paperwork and takes just a few days to complete. 

Role of Reserve Bank of India (RBI)

This is one of the interesting facts you must be aware of if you are planning to close all your old accounts and open new ones in banks located near your new location. 

The RBI doesn’t only allow the transfer of bank accounts. You are also allowed to transfer term deposits from one branch of your bank to another if you are planning to relocate. This means when moving to a different city or state you will neither have to apply for closure nor need to manage the deposits remotely. All you will have to do is visit your bank branch and request the customer care executive attending you to transfer your term deposits to the nearest branch of your new residence. 

  • Indian Banks Care about the Language You Speak

    India is a country of diversity and hundreds of languages are spoken by the residents of our country. The banking system of the country knows this fact and thus comes up with suitable regulations. 

Are you someone who needs to write cheques but don’t know good-enough English for doing the job? Rest assured. The RBI guidelines allow Indians to write their cheques in Hindi (the most widely spoken language in India) and all local languages. What’s more, customers can even request banks to issue cheque books with the content of the cheque leaves written in their regional language. 

The RBI also takes care of the language preference of customers and depositors even when it comes to forms required to be filled for different banking services and transactions. The governing body of Indian banks requires every bank to print trilingual forms. The three languages are usually a widely spoken local language, Hindi, and English. This rule needs to be met in case of deposit slips, account opening forms, passbooks, and more. 

  • Banks Are Not Allowed to Use Personal Information of Clients for Cross-Selling

    Do you get frequent phone calls from insurance agents and banks talking about different cross-selling offers? Are those callers pushing you to reveal your investment information and account balance? This is happening most likely due to a breach of law by your bank. The RBI doesn’t permit banks and financial institutions governed by them to use their clients’ personal information for doing any kind of cross-selling. 

According to the Reserve Bank of India, you will need to share your personal information with your bank only for their record. The banks don’t have the right to cross-sell or share those facts and figures with third-party service providers. So, whenever you get such calls you are free to take actions against your bank. 

  • Banks Are Not Allowed to Impose Foreclosure Costs on Home Loans with Floating Rate of Interest

    This is one of the most fascinating Indian banks fun facts, more so if you are planning to foreclose your home loan sometime soon. 

Has your NBFC or bank contacted you recently to inform you about the pre-payment or foreclosure charges you will have to bear for paying back your home loan before the loan term is over? The phone call has little value for you if you are looking to pay back a home loan with a floating rate of interest. The only other criterion that needs to be met is that the loan must be taken by an individual borrower. 

  • Your bank Has No Right to Deny an Over the Counter Cash Deposit

    As everything is turning automated, this has become a regular norm in banks. Many banks have decided to not allow OTC or over the counter cash deposits to get rid of the crowd building up near the cash counter. While the banks can impose such rules for their convenience and safety, you also have the right to force the bank officials to accept your OTC cash deposits. 

  • Banks Dispatch Cheque Books at a Risk of Their Own

    It’s the duty of your bank to ensure that the cheque books issued by them in your name reach your address safely. The bank will remain liable for an incident where the cheque book gets delivered at a wrong address or is lost in transit because of the courier service’s fault. They will not be able to charge you anything extra for issuing the lost cheque books again. 

  • Banks Must Resolve ATM-related Grievances Within 7 Business Days

    If you have faced any issue during or related to an ATM transaction, you should contact your bank immediately. It’s the duty of your bank to solve the issue within 7 days from receiving the complaint. If you don’t get any favorable response from the bank even after 7 days, it’s their duty to pay you ₹100 per day until the matter is solved. This is one of the most lesser-known Indian banks fun facts. So, if there’s a delay from your bank’s end, you should never forget to ask for the compensation you deserve. 

Final Words

People in India have umpteen trust in the banks operating in the country. Fixed deposits and recurring deposits have been the most frequently used investment vehicles for the Indians. Indeed, the past few years have witnessed incidents where certain banks have announced serious financial debacles. However, even in such circumstances, RBI looked after the interest of the customers diligently. It ensured that no depositor lost their money.

Leave a Reply

Your email address will not be published. Required fields are marked *