Customer Services in Commercial Banks

Customer service is the service provided in support of a banks core products. Customer service often includes answering questions; handling complaints. Customer service can occur on site (as when an onstage employee helps a customer or answers a question) or it can occur over the phone or the Internet. Quality customer service is essential to building cordial customer relationship. Banking being a service industry, a lot depends on efficient and prompt customer service. Customer service is the most important duty of the banking operations. Prompt and efficient service with smile will develop good public relations reduce complaints and increase business. Why is Customer Service Important? Changing customer expectations: Today the customer is more demanding and more sophisticated than he or she was thirty years ago. The increased importance of customer service: With changing customer expectations, competitors are seeing customer service as a competitive weapon with which they differentiate their products and services. The need for a relationship strategy: To ensure that a customer service strategy that will create a value preposition for customers should be formulated implemented and controlled. It is necessary to give it a central role and not one that is subsumed in the various elements of the marketing mix. The customer is the kingpim in growth organizations like commercial banks. Only those institutions which work according to his dictates will flourish. Quality, Consistency and Durability at low price are the final expectations of a customer. Quality will have to be unambiguous, of world class quality. Quality cannot be of minimum acceptable standards. Customer responsiveness must be quick and also competent. Speed, performance and cost will be the new values mantra for success. The ten key areas of customers services to be attended timely and regularly are: 1. 2. 3. 4. 5. 6. Submission of statement of A/Cs to customers Updating of savings pass books. Teller system efficiency. Cleanliness and Upkeep of premises. Intermediate Credit for institution cheques/land bills. Advance intimation to customers for rewards of Term Deposits Receipts on maturity.

7. 8. 9.

Advance for Debit/credit to accounts. Punctuality of staff. Handling of complaint register.

10. Maintain a complaint register. Customers dissatisfaction in the banking industry is neither recent nor unknown. This is mainly due to delays in handling transactions across the counter in collections, update of passbooks supply of statements of accounts, etc. Failure to provide prompt and efficient customer service is likely to lead to reduction in the number of customers and they may have to face closure. To event such situation the following improvements in the customer services may be carried out: 1. Personal relations of the bank employee with customers will improve customer satisfaction. 1 service with smile should be the motto of every bank employee. 2. 3. Rapid customer services should be provided through automation of work and simplification of procedures. ATMs may be introduced in all the branches of the banks, based upon the volume of transactions. This shall facilitate non-stop banking. 4. Credit Cards Services, Debit Card Services, which should be provided to the customers, must a link service with all the banks and branches if possible to facilitate the customer and the business organizations. 5. 6. 7. 8. 9. E-mail service made freely available at all banking centers. Foreign Exchange transactions are to be extended to all the branches to facilitate trade and industries. All the customers are not homogenous in their needs. Hence need based schemes may be introduced. Totally deregulated interest rate structure should be there. The banking staff must be trained to understand the customers psychology, so they may p rovide customer service in a qualified manner. 10. Educating the customers will increases better utilisation of banking services.

COMMERCIAL BANKS

Functions [edit]
Commercial banks perform many functions. They satisfy the financial needs of the sectors such as agriculture, industry, trade, communication, so they play very significant role in a process of economic social needs. The functions performed by banks, since recently, are becoming customer-centred and are widening their functions. Generally, the functions of commercial banks are divided into two categories: primary functions and the secondary functions. The following chart simplifies the functions of commercial banks. Commercial banks perform various primary functions, some of them are given below:

Commercial banks accept various types of deposits from public especially from its clients, including saving account deposits, recurring account deposits, and fixed deposits. These deposits are payable after a certain time period

Commercial banks provide loans and advances of various forms, including an overdraft facility, cash credit, bill discounting, etc. They also give demand and demand and term loans to all types of clients against proper security.

Credit creation is most significant function of commercial banks. While sanctioning a loan to a customer, they do not provide cash to the borrower. Instead, they open a deposit account from which the borrower can withdraw. In other words, while sanctioning a loan, they automatically create deposits, known as a credit creation from commercial banks.

Along with primary functions, commercial banks perform several secondary functions, including many agency functions or general utility functions. The secondary functions of commercial banks can be divided into agency functions and utility functions. The agency functions are the following:

To collect and clear cheque, dividends and interest warrant. To make payments of rent, insurance premium, etc. To deal in foreign exchange transactions. To purchase and sell securities. To act as trusty, attorney, correspondent and executor. To accept tax proceeds and tax returns.

The utility functions are the following:

To provide safety locker facility to customers. To provide money transfer facility. To issue traveller's cheque. To act as referees. To accept various bills for payment: phone bills, gas bills, water bills, etc. To provide merchant banking facility. To provide various cards: credit cards, debit cards, smart cards, etc.

Banking & Credit :: REGIONAL RURAL BANKS

The Narasimham committee on rural credit recommended the establishment of Regional Rural Banks (RRBs) on the groun commercial banks or co-operative banks in meeting the needs of rural areas. Accepting the recommendations of the Narasimh Rural Banks Act, 1976. A significant development in the field of banking during 1976 was the establishment of 19 Regional R Act1976.

The RRBs were established with a view to developing the rural economy by providing, for the purpose of development of productive activities in the rural areas, credit and other facilities, particularly to small and marginal farmers, agricultural la matters connected therewith and incidental thereto . Objective Functions Regional Rural Banks in India Regional Rural Banks in Tamil Nadu

RRBs established with the explicit objective of

Bridging the credit gap in rural areas Check the outflow of rural deposits to urban areas Reduce regional imbalances and increase rural employment generation

The main objectives of setting up the RRB is to provide credit and other facilities especially to the small and marginal fa entrepreneurs in rural areas. Each RRB will operate within the local limits specified by notification.

If necessary a RRB will also establish branches or agencies at places notified by the G

Each RRB is sponsored by a public sector bank which provides assistance in several ways viz., subscription to its share ca assistance as may be mutually agreed upon and help the recruitment and training of personnel during the Functions

Every RRB is authorized to carry on to transact the business of banking as defined in the Banking Regulation Act and may also the said Act. In particular a RRB is required to undertake the business of

(a) granting loans and advances to small and marginal farmers and agricultural laborers whether individually or in groups, marketing societies agricultural processing societies cooperative farming societies primary agricultural credit societies o purposes or agricultural operations or other related purposes, and

(b) granting loans and advances to artisans small entrepreneurs and persons of small means engaged in trade commerce ind operation.

The Reserve Bank of India has brought RRBs under the ambit of priority sector lending on par with the commercial banks. The are accounted for the priority sector. Within the 40% priority target, 25% should go to weaker section or 10% of th Regional Rural Banks in India

The State Bank of India is one of the major commercial banks having regional rural banks. There are 30 Regional Rural Banks i in 13 states across India. The number of branches the SBI Regional Rural Banks is mor

Several other banks, apart from the State Bank of India also functions as the promoter of rural d The other Regional Rural Banks in India are -

Haryana State Cooperative Apex Bank Limited

The main purpose of the Haryana State Cooperative Apex Bank Limited is to financially assist the artisans in the rural areas, rural entrepreneurs of Haryana. Haryana State Cooperative Apex Bank Limited also referred as the HARCOBANK, is one of t HARCOBANK holds a special economic position in the state of Haryana. The Haryana State Cooperative Apex Bank Limited individuals. The financial aids include credit for the promotion of agriculture, non-agrarian credit, and bank deposit faciliti investor for more than three decades.

National Bank for Agriculture and Rural Development

The main purpose of the National Bank for Agriculture and Rural Development is to provide credit for the development and p crafts, village industries, cottage industries, agriculture, etc. The NABARD also supports all other related economic operations in the rural sector. The NABARD also plays the role of a contributor to the rural development by the means of promoting inst providers in the rural sector, inspection, monitoring, and evaluation of client financial corporations. National Bank for Agr established as the premiere rural development bank.

Sindhanur Urban Souharda Co-operative Bank

The main purpose of the Sindhanur Urban Souharda Co-operative Bank is to provide financial support to the rural sector. Th more commonly known as the SUCO Bank.

United Bank of India

The role played by the United Bank of India (UBI) as one of the regional rural banks is phenomenal. The UBI has propagated th in the rural improvement and development. Syndicate Bank

The Syndicate Bank has it grass roots in the rural sector. The development of the Syndicate Bank was in accordance to the d Syndicate Bank has performed actively in the development of the rural sector in

The Regional Rural Banks in India has actively contributed to the growth of the rural sector. The growth of the rural industrie and economy have been dependent largely on the investment and financial aids provided by the Reg

Regional Rural Banks in Tamil Nadu

Indian Bank has sponsored two Regional Rural Banks (RRBs) viz., Saptagiri Grameena Bank and

Pallavan Grama Bank with Head Quarters at Salem is operating in 14 districts of Tamilnadu viz., Salem, Namakkal, Krishnagi Karur, Erode, Nilgiris, Vellore, Tiruvannamalai, Kancheepuram and Tiruvallu The third RRB sponsored by Indian Bank is Puduvai Bharathiar Grama Bank at Union Territory of Puducherry

What are the functions of Cooperative Banks in India? The cooperative banks in India plays an important role even today in rural financing. The businesses of cooperative bank in the urban areas also has increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks. Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. Cooperative banks in India finance rural areas under: Farming Cattle Milk Hatchery Personal finance Cooperative banks in India finance urban areas under: Self-employment Industries Small scale units Home finance Consumer finance Personal finance