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Annual Report 2016-17

BANKING CODES AND STANDARDS BOARD OF

www.bcsbi.org.in PUBLISHED BY

Anand Aras Chief Executive Officer Banking Codes and Standards Board of India C-7, 4th Floor, Reserve of India Building Bandra Kurla Complex Mumbai- 400051 Banking Codes and Standards Board of India Governing Council

Chairman

A C Mahajan

Members

C Krishnan Rama Bijapurkar

Shubhalakshmi Panse Uday Phadke

Anand Aras Chief Executive Officer Banking Codes and Standards Board of India

Banking Codes and Standards Board of India Annual Report 2016-17

BANKING CODES AND STANDARDS BOARD OF INDIA Annual Report of the activities of BCSBI during the year 2016 - 17

Governing Council The present Governing Council was last reconstituted by RBI with effect from December 14, 2014 for a period of three years ending on December 13, 2017. During the year 2016- 17, Shri Nalin M Shah retired from the Governing Council on February 12, 2017 after completion of his tenure and was replaced by Shri Uday Phadke with effect from February 14, 2017. BCSBI places on record the invaluable services rendered by Shri Nalin M Shah. The Governing Council which is vested with the powers of general superintendence, direction and control of the affairs and funds of BCSBI, held nine meetings during the year 2016-17. Several new ideas with regard to Code Monitoring Studies, Identification of Thrust Areas and drawing up of Annual Action Plan etc were discussed in the meetings and requisite resolutions passed.

Membership During the year under review, two scheduled commercial (viz. Ltd and IDFC Bank Ltd) have been enrolled as members of BCSBI. However, one Member viz. Commonwealth Bank of Australia closed their Indian operations from 28.02.2017 and sought cancellation of its membership. With these two additions and one deletion the total number of members stood at 135 as on March 31, 2017. During the year several Small Finance Banks and Payment Banks have evinced interest in becoming members of BCSBI. They have been advised of the procedural requirements for becoming members. BCSBI will continue its efforts to enlist eligible banks as members so that all bank customers benefit from the provisions of both the Bank’s commitment to Customers and the MSE Codes. During the year under review, an amount of Rs.801.53 lakh was collected from members towards their annual membership fees. There were no arrears of membership fees. Names of member banks as on March 31, 2017 are listed in Annex I.

Monitoring of Code Implementation and visits to bank branches to assess implementation of the Codes BCSBI, apart from its main task of preparing and periodically reviewing of Codes for customer service in banks also looks into the aspect of ongoing monitoring of implementation of the Codes by the member banks. BCSBI has been monitoring the implementation of Code provisions by examining Annual Statement of Compliance (ASC) which itself is a self- certified statement submitted by banks covering status of implementation of some of the important provisions of the Codes. In addition to this, BCSBI has also adopted a system of conducting visits to select bank branches / processing centres to verify the position regarding ground level implementation of the Code of Bank’s Commitment to Customers and the Code of Bank’s Commitment to Micro and Small Enterprises (MSE) as a tool for on-site monitoring. Such visits to branches for verification are confined to a sample of branches selected at random and are undertaken by authorized representatives of BCSBI,

1 Banking Codes and Standards Board of India Annual Report 2016-17 who record their observations in a structured questionnaire on important Code provisions. During such visits, BCSBI representatives also interact with a few customers of the bank branches and obtain their feedback. In the year 2016-17, BCSBI has carried out visits to a representative sample of 2733 branches of 51 select member banks at 87 centres including 20% branches from rural and semi-urban areas. The BCSBI representatives have also obtained feedback from 8485 customers during such visits. During this round of branch visits five select scheduled Urban Cooperative Banks were included for the first time.

BCSBI Code Compliance Rating-2017: The outputs of branch visits and responses of customers were utilized as inputs for rating of banks on Code compliance. BCSBI has engaged the services of CRISIL for developing the Rating methodology and framework. CRISIL analyses the data provided by BCSBI within the laid down framework and assesses the Code compliance of banks by grouping the parameters covered in Branch Visit findings and Customer feedback into five main categories viz: Information dissemination (ID), Transparency (TR), Customer centricity (CC), Grievance redressal (GR) and Customer feedback (CF), and allocating them numerical weightages to arrive at a score out of 100. The aspects relating to complaints received by Banking Ombudsmen have been factored into Grievance redressal segment of above mentioned rating framework. Based on the overall score achieved by a bank, a rating described as “BCSBI Code Compliance Rating-2017” was awarded from out of four categories, viz., High’, ‘Above Average’, ‘Average’ and ‘Below Average’ depicting the corresponding level of Code compliance of the bank. The scoring scale and overall position of rating of 46 banks, excluding five select scheduled Urban Cooperative Banks being included for the first time, in current round vis–a- vis their position in 2014-15 is given in the following table:

Scoring Scale Grade /Category Number of Banks and percentage 2014-15 2016-17 85 and above High 13 28% 12 26% 70 to less than 85 Above Average 23 50% 24 52% 60 to less than 70 Average 10 22% 10 22% Below 60 Below Average 0 0 0 0 Total 46 100% 46 100%

The above table reveals a relatively unchanged position with the number of banks in each grade remaining more or less same. However, the same may be viewed in the background of the fact that, the bar for current rating exercise has been raised by a) rearticulating the parameters for verification, b) addition of some more aspects based on the principles laid down in the model Customer Rights Policy adopted by banks, c) increased emphasis given to complaints received by Banking Ombudsman (under the category of Grievance

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Redressal) and d) added focus and weightages for Customer Centricity and Customer Feedback. Thus, under the circumstances, it is noteworthy that 15 banks have improved their scores of which 5 have improved their rating category while 10 remained in the same band of their previous rating category. The five Scheduled Urban Co-operative banks, selected for the survey for the first time, have all been rated in the ‘Above Average’ category. This is not captured in the above table for want of historical data.

Code of Bank’s Commitment to Customers The Code of Bank’s Commitment to Customers was first introduced in the year 2006 and revised in 2009 and 2014. The Code sets minimum standards of banking practices when dealing with individual customers. The code contains obligations of banks towards the customers in their day to day banking operations. A fresh review of the Code is proposed in the next financial year and suggestions / views have been sought from Member Banks, Indian Banks Association, Reserve and other stakeholders like consumer organisations and members of the public. The revised code will additionally focus on Customer’s Charter of Rights. Considering the technological enhancement in the payment and settlements systems and emergence of new modes of payments and settlements, and the shift to digitization, additional coverage on App-based banking is proposed.

Code Monitoring Studies BCSBI undertook certain studies around select themes relating to Code provisions and also certain other important customer service related areas. During the year 2016-17, BCSBI conducted the following studies: (i) Study of cheque clearing process under Cheque Truncation System with reference to compliance with the relevant Code provisions A study of 13 banks comprising 8 from Public Sector and 5 from Private Sector on CTS Cheque Clearing System was carried out in the first quarter of 2016-17. The specific aspects covered during the study were as under: - Availability of facility to hand over cheques at counter against acknowledgement even though Cheque drop box facility is available at branches. Relevant display at appropriate places (Branch premises and on drop box) - Display of cut-off time for lodging instruments and information about when customers can withdraw money. - Timely communication with reasons about returned unpaid cheques/instruments - Timely return of the unpaid / dishonoured cheques - Timely re-presentation of “technical” return cheques and levy of charges for such returns - Compensating customers in the case of delay in collection of cheque irrespective of demand by the customer.

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The Study report was examined by Governing Council of BCSBI in its meeting held on September2, 2016 which approved the recommendations made in the report regarding best practices/systems adopted by banks in this regard. Accordingly, the same were shared with all the public sector, private sector and foreign member banks for implementation, if not already done at their end. (ii) A study of select banks on centralized implementation of BCSBI Codes through efficient flows and use of technology covering Retail and MSE Loans A study of 21 select banks on the centralized implementation of Codes with use of technology covering Retail and MSE Loans was carried out in the third quarter of 2016- 17. The specific aspect covered during the study was to determine the operational efficiency at various stages of the loan life cycle i.e. from receipt of application, process flow, communication and sanction process, closure and servicing, post disbursal, for both Retail and MSE Loans. The objective was to identify the best practices followed by different banks and share the same with other member banks for their consideration and implementation. It was observed that most of the banks are i) using internal software for tracking applications and also various stages of the appraisal process. ii) extensively using SMS / email for communicating to customers of the various changes on terms and conditions or interest rate changes. iii) using technology and email / sms facility to manage the disbursal and post disbursal process iv) extensively using technology for communicating with the customers with regard to implementation of the Codes. The GC advised that letters be sent to the banks concerned regarding deficiencies pointed out in the study. Accordingly, attention of the PCCOs of the banks was invited to the following major areas for improvement: • Acknowledging receipt of loan applications and indicating the period within which the customer can expect disposal of the loan application, • Making available a list of documents to be provided along with the application and the Most Important Terms and Conditions of the loan on bank’s website and • Simplification of the operational workflow for small ticket MSE loans, etc., besides sharing of the best practices of certain banks in this regard. (iii) A study on penalty levied by banks for non-maintenance of minimum balance in Savings Bank account A study of 13 Banks was conducted in the last quarter Jan – March 2017 on penalties levied by Banks for non-maintenance of minimum balance requirement in Savings Bank Accounts and charges for value added services to find out the reasons for

4 Banking Codes and Standards Board of India Annual Report 2016-17

Shri Anand Aras, CEO, BCSBI makes a point at the meeting of Controlling Heads of Banks at Guwahati. Also seen on the dais are Shri PVSLN Murty, CGM, SBI and Smt. Gopika Arora, AVP, CIBIL.

A cross section of the officers

Shri A C Mahajan, Chairman, BCSBI addresses the officers of banks at Ahmedabad. Seated on the dais are Shri Anand Aras, CEO, BCSBI (left) and Shri Amit Singh Panwar, Manager, CIBIL.

5 Banking Codes and Standards Board of India Annual Report 2016-17

A cross section of the audience

Shri U V Sathish, Manager, TransUnion CIBIL Ltd. Interacts with the participants at the meeting with officers of banks at Hyderabd, while Shri S Krithivasan, Internal Ombudsman, and Shri Anand Aras, CEO, BCSBI look on.

A cross section of the audience

Shri P K Agrawal, Senior V P welcomes the participants at the Customer Meet at Nasik. Seated from left are Shri Edwin Fernandes, Senior V P; Shri Anand Aras, CEO, BCSBI; Zonal Manager, Bank of ; and Ms. Sneha Valentine, Manager, TransUnion CIBIL Ltd.

6 Banking Codes and Standards Board of India Annual Report 2016-17

Shri Anand Aras, CEO, BCSBI addresses the Customer Meet at Kochi. Seated from left are Shri P S Rajan, DGM, ; Smt.Harshala Chandorkar, COO, TransUnion, CIBIL Ltd; and Smt. Sati Nair, Senior V P, BCSBI.

A cross section of the officers

Shri A C Mahajan, Chairman, BCSBI addresses the Meeting of of Bank Officers at Vadodara. Seated from left are Shri Amit Panwar, Manager, TransUnion CIBIL Ltd; Shri Anand Aras, CEO, BCSBI; and Shri K R Kanojia, GM, .

7 Banking Codes and Standards Board of India Annual Report 2016-17

Shri P K Abrol, AGM, Customer Care, SBI welcomes the participants of the Customer Meet at Kalka. Seated from left are Shri P K Agrawal, Senior V P, BCSBI; Shri P Raghavendra, DGM, SBI; Shri S L Paul, Chief LDM, ; and Smt. Jyoti Sharma, Senior V P, BCSBI.

“Puppet Show” – organized as part of the Women’s Empowerment and “Know Your Rights” Programme at Kochi.

8 Banking Codes and Standards Board of India Annual Report 2016-17

proportionately high number of customers’ complaints in these areas and to find out if the charges levied are in line with the prevailing market practices. It was observed that most of the Banks are complying with RBI guidelines and BCSBI Code of Bank’s Commitment to Customers regarding parameters of information dissemination and transparency with reference to minimum balance requirement, penalty for non-maintenance of minimum balance in Savings Bank Account, upgradation of Savings Bank Account or levying fee for various value added services. The charges were approved by the Boards of these respective banks. However, a few banks were found not adhering to RBI guidelines/ Code of Bank’s Commitment to Customers in some of the aspects related to the study and the issue has been taken up with these banks. The findings of the study have also been shared with .

Resolution of Systemic Issues BCSBI receives a number of complaints, though it is not a complaint redressal organization. However, these complaints and Awards of Banking Ombudsmen received at the BCSBI are studied to find out whether there is any systemic deficiency which can be remedied. During the year, BCSBI received 878 complaints. All the complaints received are classified into twelve categories, based on the issues raised in the complaints. Analysis of the complaints indicates that most of the complaints pertained to deposits, loans and advances and ATM/ Debit cards. The profile of complaints is given in Annex II.

BCSBI At A Glance

2015-16 2016-17 Members of BCSBI 134 135 Banks admitted as members during the year 6* 2@ Applications in process for membership 2 – Participation in : Town Hall Meetings/Customer 23 19 Awareness Programmes/ Training Programmes Workshops/Conferences/Seminars 5 4 Customer Meets 10 11 Meeting with Bank Officers on Code Implementation Nil 12 Branches/ Centralised Processing Centres visited to Post visit assess- 2733 look into Code implementation ments were made during the year Monitoring Studies – Branches/Units visited 83 57 Complaints received and dealt with 1473 878 * Merger of a bank into an existing member bank and merger of another bank into new bank which has been admitted during the year. @ Two universal banks became members and one member closed their operations during the year 2016-17.

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Conference of Principal Code Compliance Officers The annual Conference of Principal Code Compliance Officers (PCCOs) representing all member banks of BCSBI was held on May 23, 2016 in Mumbai. Shri S.S. Mundra, Deputy Governor (DG), Reserve Bank of India (RBI) delivered the keynote address. The meeting was also addressed by Shri C. Krishnan, member of Governing Council of BCSBI and Shri Arun Pasricha, Chief General Manager, Consumer Education and Protection Department (CEPD), RBI. Shri Anand Aras, Chief Executive Officer(CEO), BCSBI also addressed and interacted with the participants. Shri Mundra stated that BCSBI had been instrumental in driving improvement in level of service extended by the banks to their customers. He added that RBI attached great importance to the work and assessments of BCSBI, and placed an onerous responsibility on it in this relatively unexplored area. He emphasized that the onus of empowering the frontline staff with required information and sensitizing them about customer service, lies with the banks. In the context of Banking Ombudsman Scheme, he informed that RBI was planning to augment the number of its Banking Ombudsman offices in the near future and also to come out with certain amendments to the Scheme. He advised that Internal Ombudsman, the Principal Nodal Officer and PCCOs in banks should have clearly demarcated roles and responsibilities and a clear chain of command to avoid overlaps or vacuum. He hinted that RBI was already examining whether to issue regulatory directions with regard to limiting the liability of customers for fraudulent transactions arising out of cards and electronic banking. He stated that the Right to Suitability enshrined in Charter of Customer Rights has been totally ignored or rather knowingly violated for the reasons best known to the banks. He also cautioned banks against levying of excessive charges for various services and allowing customers’ accounts to go into negative balance on account of these charges. He insisted that all banks must stop these practices forthwith, if not already done so.

Spreading Awareness of the Codes The Codes are commitments of banks towards their customers. While spreading awareness of the Codes among the customers and staff of banks is the responsibility of banks, BCSBI supplemented their efforts by organizing a few “Customer Meets” at different places such as Guwahati, Madurai, Aurangabad, Ahmedabad, Ludhiana, Mumbai, Hyderabad, Nasik, Kochi, Vadodara, Kalka, etc. Most of these Meets were held in association with TransUnion CIBIL Ltd. wherein importance of maintaining a healthy credit history was also emphasized. As it was also observed during branch visits that banks’ own staff was not sufficiently conversant with the commitments contained in the Codes, BCSBI organized meetings with the frontline officers of Banks to impress upon them the efforts to be made at the Branch level. Such Meetings with officers of Banks were held at Guwahati, Madurai, Aurangabad, Ahmedabad, , Gurgaon, Chandigarh, Mumbai, Hyderabad, Nasik, Kochi and Vadodara. In addition to the above, the CEO and other officials of BCSBI participated in the Awareness Programmes organized by Banking Ombudsmen of RBI and Banks. BCSBI has provided

10 Banking Codes and Standards Board of India Annual Report 2016-17 faculty support to training establishments such as College of Agriculture Banking (RBI), National Institute of Bank Management, Indian Institute of Banking and Finance (IIBF), etc.

Empowerment Programme BCSBI for the first time organized a “Know Your Rights” programme for underprivileged women in Kerala in association with Kudumbashree on Jan 23, 2017. The session which focused on simplifying the technicalities of the banking codes through a skit and a puppet show, drew participation of over 100 women. At the session the women were enlightened on the Banking Codes and how to protect their rights while using banking services in their day-to-day financial transactions. The interactive session, interalia, highlighted the importance of having a nominee for their banking products like savings accounts and fixed deposits, the process of exchanging soiled/mutilated notes, ways to protect their privacy and confidentiality, introduction to digital banking and the Codes coming to their aid during an unauthorized transaction, grievance redressal mechanism, etc. The fun-filled session was followed by an interactive spot quiz to gauge the comprehension of the Codes.

Pictorial presentation of basic rights contained in the Code of Bank’s Commitment to Customers A pictorial booklet on Codes covering 19 topics like opening of BSBD Accounts, nomination, privacy and confidentiality, grievance redressal etc has been prepared and shared with Banks with an instruction to widely popularise it for the benefit of Prime Minister’s Jan Dhan Yojana and BSBD Account Holders. The booklet originally published in Hindi has since been translated into English and the Banks have been advised to popularise it in the various vernacular languages. Translation of the booklet into Marathi, Tamil and Malayalam has also been recently completed. The booklet has been well received by the target groups.

BCSBI Newsletter-“Customer Matters” The quarterly Newsletter “Customer Matters” was launched in the year 2009.The primary objective of the Newsletter is to educate and ensure the rights of customers. It is designed to let customers know of any changes in regulations pertaining to customer service areas in the banking industry alongwith recent developments in that space leading to improved customer satisfaction. The newsletter highlights the activities done to increase the awareness of the Codes and Standards developed by BCSBI. During the year,the Newsletter covered various relevant and critical topics like plastic money, credit card charges, electronic banking and minimum balance to be maintained in Savings Bank accounts and service charges for non maintenance of minimum balance. From the last quarter, a guest column has been included in the newsletter and the topic was “Digital Channels-Security Features” aimed at improved customer service.

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Funds Position During the year 2016-17, the total income of BCSBI from its Corpus Fund investments amounted to Rs. 3,45,16,682/- to which an amount of Rs. 2,08,51,786/- transferred from Public Awareness Fund was added. The total amount available was, therefore, Rs.5,53,68,468/-. Out of this, an amount of Rs.2,08,51,786/- was spent on the objects of the trust, Rs.1,14,04,388/- on Administrative Expenses and the unspent balance of Rs.2,31,12,294/- has been transferred to Public Awareness Fund to be utilised within the next five years. With the above transfer, the balance in the Public Awareness Fund as on March 31, 2017 stood at Rs.2,67,99,866/-. As the funding support from RBI has ceased from the year 2016-17 onwards, BCSBI will be required to meet all its expenditure out of income generated from the funds invested. For the year 2017-18, Members’ contribution was retained at Rs.800 lakh as of previous year to be contributed by each member in proportion to their Gross Domestic Assets as on March 31, 2016 subject to a minimum contribution of Rs.50,000/-. As in the past, the entire contribution made by the member banks in the form of registration fees and annual membership fees has been credited to the Corpus Fund as directed by them. As on March 31, 2017, the Corpus Fund amounted to Rs.3,795.02 lakh. With the proposed membership fees for the year 2017-18, the Corpus Fund of BCSBI will go up to Rs.4,595.02 lakh. As in previous years, BCSBI will continue to build up the Corpus steadily with a view to become more self sufficient and manage future capital and recurring expenditure. As on March 31, 2017, BCSBI’s investments in GoI securities stood at Rs.177.70 lakh and Rs.3,137.16 lakh in Term Deposits with Member banks.

Acknowledgements BCSBI wishes to thank the top management of RBI including its Customer Education and Protection Department for their continued guidance and support in discharging the responsibility cast on the BCSBI and including it in the awareness programmes and town halls organized by various departments of RBI/Banking Ombudsman. BCSBI also wishes to thank Indian Banks’ Association and all Member Banks for their support and co-operation.

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Annex I LIST OF MEMBER BANKS OF BCSBI (As on 31.03.2017)

Sl.No. Name of the bank Sl.No. Name of the bank Scheduled Commercial Banks 45 Ltd 1 AB Bank Ltd. 46 National Australia Bank 2 47 Oriental Bank of Commerce 3 48 Punjab & Sind Bank 4 Ltd. 49 Punjab National Bank 5 Bandhan Bank Ltd 50 RBL Bank Ltd 6 N A 51 Plc 7 Bank of Baroda 52 SBM Bank (Mauritius) Ltd. 8 53 Shinhan Bank 9 Bank of India 54 Societe Generale 10 55 Sonali Bank Ltd. 11 Bank of Nova Scotia 56 South Ltd 12 Bank Plc 57 Bank 13 Bhartiya Mahila Bank Ltd 58 State Bank of Bikaner and Jaipur 14 BNP Paribas 59 State Bank of Hyderabad 15 60 16 Catholic Syrian Bank 61 17 of India 62 18 Citibank N A 63 19 Ltd 64 20 65 Tamilnad Mercantile Bank Ltd. 21 Credit Agricole Corporate and Investment 66 UCO Bank Bank 67 Union Bank of India 22 DBS Bank Ltd 68 23 DCB Bank Ltd. 69 24 70 Ltd. 25 AG 26 Ltd. Scheduled Urban Cooperative Banks 27 Doha Bank QSC 1 Bharat Cooperative Bank (Mumbai) Ltd. 28 Ltd 2 Citizen Credit Cooperative Bank Ltd. 29 HDFC Bank Ltd. 3 Cosmos Cooperative Bank Ltd. 30 Honkong and Shanghai Banking 4 Dombivli Nagari Sahakari Bank Ltd Corporation Ltd 5 Gopinath Patil Parsik Janata Sahakari Bank 31 ICICI Bank Ltd. Ltd 32 IDBI Bank Ltd. 6 Janata Sahakari Bank Ltd., Pune 33 IDFC Bank Ltd 7 Kallappana Awade Ichalkaranji Janata 34 Indian Bank Sahakari Bank Ltd 35 8 Karad Urban Cooperative Bank Ltd. 36 IndusInd Bank Ltd. 9 Nagar Urban Cooperative Bank Ltd. 37 Jammu & Kashmir Bank Ltd 10 Nagpur Nagarik Sahakari Bank Ltd 38 JP Morgan Chase Bank N A 11 Nasik Merchants Cooperative Bank Ltd 39 Bank Ltd. 12 Nutan Nagarik Sahakari Bank Ltd. 40 Ltd 13 Punjab and Maharashtra Cooperative Bank 41 Ltd. Ltd. 42 Krung Thai Bank Plc 14 Saraswat Cooperative Bank Ltd. 43 Ltd 15 Surat People's Co-op Bank Ltd 44 Mashreq Bank PSC 16 SVC Cooperative Bank Ltd

13 Banking Codes and Standards Board of India Annual Report 2016-17

Sl.No. Name of the bank Sl.No. Name of the bank 17 Thane Bharat Sahakari Bank Ltd. 23 Maharashtra Gramin Bank 18 Zoroastrian Cooperative Bank Ltd. 24 Malwa Gramin Bank 25 Meghalaya Rural Bank Regional Rural Banks 26 1 Allahabad U P Gramin Bank 27 Narmada Jhabua Gramin Bank 2 Andhra Pradesh Grameena Vikas Bank 28 3 Andhra Pragathi Grameena Bank 29 4 Baroda Gramin Bank 30 Pragathi Krishna Gramin Bank 5 Baroda Kshetriya Gramin Bank 31 Prathama Bank 6 Baroda Gramin Bank 32 Puduvai Bharathiar Grama Bank 7 33 Punjab Gramin Bank 8 Central Gramin Bank 34 Purvanchal Bank 9 Chaitanya Godavari Grameena Bank 35 Rajasthan Marudhara Gramin Bank 10 Chhattisgarh Rajya Gramin Bank 36 Saptagiri Grameena Bank 11 Dena Gujrat Gramin Bank 37 Sarva Gramin Bank 12 Gramin Bank of Aryavarta 38 Sarva U P Gramin Bank 13 Gramin Bank 39 Saurashtra Gramin Bank 14 J & K Gramin Bank 15 Jharkhand Gramin Bank 40 Sutlej Gramin Bank 16 Karnataka Vikas Grameena Bank 41 Telangana Grameena Bank 17 Kashi Gomti Samyut Gramin Bank 42 Utkal Grameen Bank 18 Kaveri Grameena Bank 43 19 44 20 Langpi Dehangi Rural Bank, Assam 45 Uttarbanga Kshetriya Gramin Bank 21 Madhya Bihar Gramin Bank 46 Vananchal Gramin Bank 22 47 Vidharbha Konkan Gramin Bank

Annex II Profile of Complaints Sr. No. Nature of Complaints 2015-16 2016-17 1 Deposit Accounts 299 223 2 Credit Cards 203 62 3 Pension 14 12 4 Tariff Schedule and Service Charges 63 59 5 Cheque Collection/Clearing Cycle – Delayed Credit 43 26

6 ATM/Debit Cards 170 94 7 CIBIL Records 14 5 8 Compensation Policy 0 0 9 Harassment by Recovery Agents 23 47 10 Loans and Advances 298 141 11 Insurance Products 15 14 12 Miscellaneous 331 195 Total 1473 878

14 Statement of Accounts for the year 2016-17 Banking Codes and Standards Board of India Annual Report 2016-17

INDEPENDENT AUDITOR’S REPORT To The Trustees of Banking Codes and Standards Board of India Report on the Financial Statements We have audited the accompanying financial statements of Banking Codes and Standards Board of India (The Trust), which comprise the Balance Sheet as at 31st March 2017 and the Income and Expenditure Account of the Trust for the year ended on that date, and a summary of significant accounting policies. Management’s Responsibility for the Financial Statements The Trust’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Trust in accordance with the Section 32 of Bombay Public Trust Act 1950. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing opinion on the effectiveness of entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by trust’s management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion and to the best of our information and according to the explanations given to us, the financial statements give true and fair view in conformity with the accounting principles generally accepted in India : a. in the case of the Balance Sheet, of the state of affairs of the Trust as at 31st March 2017 and b. in the case of the Income and Expenditure Account of the Trust of the income and expenditure for the year ended on that date. Report on other Legal and Regulatory Requirements : We report that, 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; 2. In our opinion, proper books of account as required by law have been kept so far as appears from our examination of those books; 3. In our opinion, the financial statements dealt with by the report comply with the Accounting Standards issued by the Institute of Chartered Accountants of India. 4. The financial statements dealt with by this report are in agreement with the books of account.

For Mukund M. Chitale & Co. Chartered Accountants Firm Reg No. 106655W

Sd/- (A. V. Kamat) Place: Mumbai Partner Date : June 21, 2017 Membership No: 39585

16 Banking Codes and Standards Board of India Annual Report 2016-17

BANKING CODES AND STANDARDS BOARD OF INDIA Balance Sheet as on 31st March 2017 (As per Schedule VIII of Bombay Public Trusts Act, 1950) As on 31st FUNDS & LIABILITIES As on As on 31st PROPERTY & ASSETS As on March 2016 31st March 2017 March 2016 31st March 2017 (Rs.) (Rs.) (Rs.) (Rs.) Fixed Assets(Net of Depreciation) (Sch A) Trust Funds or Corpus 44,701 Computer and Peripherals 1,56,375 22,69,19,000 Balance as per last Balance Sheet 29,93,49,000 – Office Appliances 53,400 Add: Contribution received during the year (including registration 7,24,30,000 fees) 8,01,53,000 37,95,02,000 2,394 Furniture & fixtures 14,505 29,93,49,000 – Immovable Properties – 2,24,280 Investments – Other earmarked funds – 2,17,16,662 Govt Securities(Cost) (Sch B) 1,77,70,414 – Loans (Secured or unsecured) – Public Awareness Fund – Advances- – 2,20,94,859 Balance as per last Balance Sheet 2,45,39,358 – To others- – Less: Trd to Income & 94,55,656 Expenditure Account 2,08,51,786 – Prepaid Expenses 61,110 Add: Trd from Income & 1,19,00,155 Expenditure Account 2,31,12,294 2,67,99,866 Tax Deducted at Source 2,45,39,358 16,590 A.Y 2007-08 16,590 Advance from Member Banks- 24,415 A.Y 2013-14 24,415 Membership Fee for the following 3,58,36,000 year 2,51,00,000 42,928 A.Y 2014-15 42,928 – A.Y.2017-18 10,72,585 11,56,518 Unamortised premium on GOI 1,979 Securities 621 Liabilities Interest Outstanding On Fixed Deposit Receipts – Provision for Expenses 11,660 3,82,61,695 with banks 6,59,53,769 Professional and Audit Fees On Government of India 1,04,500 Payable 1,23,900 6,98,540 Securities 5,80,796 6,65,34,565 – Survey Expense Payable 10,08,000 Cash & Bank Balances including Fixed Deposits 10,000 TDS Payable 1,07,800 (Sch C) – Payable to ICICI Bank 85,655 13,37,015 1,88,13,322 - Cash and Bank Balance 3,32,75,741 28,02,15,632 - Fixed Deposit with Banks 31,37,15,632 34,69,91,373 35,98,38,858 Total 43,27,38,881 35,98,38,858 Total 43,27,38,881

Notes on Accounts - Schedule F The above Balance Sheet to the best of our belief contains a true account of the Funds and Liabilities and of the Property and Assets of the Trust. As per our report of even date For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Chartered Accountants (A C Mahajan) Firm Reg No:- 106655W Chairman

(Anand Aras) (A.V.Kamat) Chief Executive Officer Partner Membership No:- 39585 Place : Mumbai Place : Mumbai Date : June 21, 2017 Date : June 21, 2017

17 Banking Codes and Standards Board of India Annual Report 2016-17

BANKING CODES & STANDARDS BOARD OF INDIA Income & Expenditure Account for the year ended 31st March 2017 (As per Schedule IX of Bombay Public Trusts Act, 1950)

Year ended EXPENDITURE Year ended Year ended INCOME Year ended 31st March 31st March 31st March 31st March 2017 2016 (Rs.) 2017 (Rs.) 2016 (Rs.) (Rs.)

To Expenditure in respect of – Properties – – By Rent – –

51,899 Repairs and maintenance 29,442 By Interest

92,63,135 To Establishment Expenses (Sch D) 42,82,203 17,18,030 On Securities 15,07,487

63,37,689 To Remuneration to Trustees 69,53,221 3,95,686 On Savings Bank account 3,59,614

– To Legal Expenses – 2,63,87,038 On Fixed Deposits with banks 3,26,15,828 3,44,82,929

38,282 To Audit Fees 46,000 – On Income Tax Refund

– To Contribution and Fees – – By Dividend –

To Amount written off – By Donation in cash or kind –

1,358 Premium on Govt Securities amortised 1,358 – By Miscellaneous receipts –

By Premium on maturity of – Government Securities 33,753

– To Miscellaneous expenses –

By Transfer from Public 35,387 To Depreciation 92,164 94,55,656 Awareness Fund 2,08,51,786

To Amount Transferred to Public 1,19,00,155 Awareness Fund 2,31,12,294 –

To Expenditure on the objects of the 1,03,28,505 trust (Sch E) 2,08,51,786

3,79,56,410 Total 5,53,68,468 3,79,56,410 Total 5,53,68,468

Notes on Accounts - Schedule F

As per our report of even date

For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Chartered Accountants (A C Mahajan) Firm Reg No:- 106655W Chairman

(Anand Aras) (A.V.Kamat) Chief Executive Officer Partner Membership No:- 39585

Place : Mumbai Place: Mumbai Date : June 21, 2017 Date: June 21, 2017

18 Banking Codes and Standards Board of India Annual Report 2016-17

Schedule A BANKING CODES AND STANDARDS BOARD OF INDIA Schedule to Balance Sheet as on 31st March 2017 Particulars Rate Gross Block Depreciation (Rs.) Net Block (Rs.) of Opening Addition Closing Opening Charge Closing as at as at Dep. Balance (Rs.) Balance Balance for the Balance 31.03.2017 31.03.2016 % (Rs.) (Rs.) year Computer 60% 47,143 1,97,849 2,44,992 19,980 75,652 95,632 1,49,360 27,163 Printer 60% 9,219 – 9,219 3,521 3,419 6,940 2,279 5,698 Tally Software 60% 17,600 – 17,600 9,960 4,584 14,544 3,056 7,640 Knowledge Manangement Tool Software 60% 6,000 – 6,000 1,800 2,520 4,320 1,680 4,200 79,962 1,97,849 2,77,811 35,261 86,175 1,21,436 1,56,375 44,701 Office Appliances 15% – 58,500 58,500 – 5,100 5,100 53,400 – Furniture 10% 2,520 13,000 15,520 126 889 1,015 14,505 2,394 Grand Total of 2016-17 82,482 2,69,349 3,51,831 35,387 92,164 1,27,551 2,24,280 47,095 Grand Total of 2015-16 37,573 44,909 82,482 37,573 (2,186) 35,387 47,095 – Schedule B BANKING CODES AND STANDARDS BOARD OF INDIA Schedule of Investments belonging to the Trust as on 31st March 2017 ( As per Part III - Schedule VIII of Bombay Public Trusts Act, 1950) (Amount in Rupees) Date and year of Kind of investments Full description such as name Face Value Cost Rate of preparation of the company, distinctive interest Nos. of shares and certificates, borne by type of shares, etc. Date of investments redemption or repayment 1 2 3 4 5 6 At the beginning (i) Shares – of the year (ii) Bonds and Debentures – (as on 1st April, (iii) Deposits – 2016) (iv) Others – (v) Public Securities a) 7.49% GOI Securities 2017 1,20,00,000 1,14,70,414 7.49% b) 7.59% GOI Securities 2016 25,00,000 24,66,248 7.59% c) 7.99% GOI Securities 2017 28,00,000 28,00,000 7.99% d) 8.07% GOI Securities 2017 14,80,000 14,80,000 8.07% e) 8.24% GOI Securities 2018 35,00,000 35,00,000 8.24% Total 2,22,80,000 2,17,16,662 Increase during – – the year (2016-17) Decrease during (i) Public Securities a) 7.59% GOI Securities 2016 25,00,000 24,66,248 the year (2016-17) b) 8.07% GOI Securities 2017 14,80,000 14,80,000 Total at the end of the year (as on 31st March 2017) 1,83,00,000 1,77,70,414

For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Sd/- Chartered Accountants (A C Mahajan) Firm Reg No:- 106655W Chairman Sd/- Sd/- (A.V.Kamat) (Anand Aras) Partner Chief Executive Officer Membership No:- 39585 Place : Mumbai Place: Mumbai Date : June 21, 2017 Date: June 21, 2017

19 Banking Codes and Standards Board of India Annual Report 2016-17

Schedule C BANKING CODES AND STANDARDS BOARD OF INDIA Schedule to Balance Sheet as on 31st March 2017 (Amount in Rupees) As on Bank Accounts As on 31st March 2016 31st March 2017 In Savings Account 10,37,520 - ICICI Bank Ltd. 97,83,184 1,77,68,938 - Yes Bank Ltd. 2,34,78,476 In Current Account 6,864 - 14,081 1,88,13,322 Total(I) 3,32,75,741 In Fixed Deposits 11,88,15,632 - State Bank of Mysore 11,33,15,632 7,23,00,000 - Vijaya Bank 5,48,00,000 7,96,00,000 - State Bank of Travancore 7,96,00,000 95,00,000 - ICICI Bank Ltd. 95,00,000 – - Saraswat Co-op. Bank Ltd. 1,65,00,000 – - Lakshmi Vilas Bank Ltd. 2,00,00,000 – - RBL Bank Ltd. 2,00,00,000 [All accounts in the name of Banking Codes and Standards Board of India] 28,02,15,632 Total(II) 31,37,15,632 29,90,28,954 (I)+(II) 34,69,91,373

Schedule D BANKING CODES AND STANDARDS BOARD OF INDIA Schedule to the Income and Expenditure Account for the year ended 31st March 2017 Establishment Expenses (Amount in Rupees) Year ended 31st Particulars Year ended 31st March 2016 March 2017 14,338 News Paper and Periodicals 18,092 92,48,797 Professional fees (Staff) 42,64,111 92,63,135 TOTAL 42,82,203

For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Chartered Accountants Sd/- Firm Reg No:- 106655W (A C Mahajan) Chairman Sd/- Sd/- (Anand Aras) (A.V.Kamat) Chief Executive Officer Partner Membership No:- 39585 Place : Mumbai Place: Mumbai Date : June 21, 2017 Date: June 21, 2017

20 Banking Codes and Standards Board of India Annual Report 2016-17

Schedule E BANKING CODES AND STANDARDS BOARD OF INDIA Schedule to the Income and Expenditure Account for the year ended 31st March 2017 EXPENDITURE ON THE OBJECTS OF THE TRUST

(Amount in Rupees)

Year ended Particulars Year ended 31st March 2016 31st March 2017

– Field Manager Expenses 1,514

5,33,140 Advertisement and publicity 33,67,245

399 Bank charges 346

1,52,868 Catering and refreshments 1,97,576

1,26,817 Conveyance and car hire 93,825

– Internet Charges 3,104

1,17,856 Postal courier 1,00,098

3,95,179 Printing and stationery 3,14,292

30,20,644 Seminar and conference expenses 21,67,724

57,13,625 Survey expenses 78,01,741

1,05,009 Telephone expenses 1,13,432

– Professional fees (Staff) 64,20,300

1,05,740 Professional fees - Others 1,95,005

57,228 Web site maintenance 75,584

1,03,28,505 TOTAL 2,08,51,786

For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Chartered Accountants Sd/- Firm Reg No:- 106655W (A C Mahajan) Chairman Sd/- Sd/- (Anand Aras) (A.V.Kamat) Chief Executive Officer Partner Membership No:- 39585 Place : Mumbai Place: Mumbai Date : June 21, 2017 Date: June 21, 2017

21 Banking Codes and Standards Board of India Annual Report 2016-17

BANKING CODES AND STANDARDS BOARD OF INDIA Schedule F SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2017 A. SIGNIFICANT ACCOUNTING POLICIES : 1. Method of Accounting: 1.1 The financial statements are prepared under the historical cost convention on the basis of going concern and in accordance with the Generally Accepted Accounting Principles in India (GAAP) and provisions of the Bombay Public Trust Act, 1950. 1.2 The Presentation of financial statements are in conformity with generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognized in the periods in which the results are known/ materialized. 1.3 The Financial Statements are prepared on accrual basis. 2. Revenue Recognition: Interest Income : Interest income is recognized on accrual basis. 3. Corpus Fund : As per the funding proposal agreed with Reserve Bank of India, the trust continues to build up the Corpus from Registration and Membership Fees as Reserve Bank of India has ceased funding. The member banks have also desired that the entire contribution made by member banks in the form of Registration Fees and Membership Fees be credited to the Corpus. Accordingly, the Registration Fees and the Membership Fees are credited to the Corpus Fund during the year. 4. Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use. 5. Depreciation: Depreciation on fixed assets is provided on written down value method at rates specified in the Income Tax Act, 1961. 6. Investments : Long term Investments are stated at cost. Provision for diminution in value of long term investments, if any, is made, if such diminution is other than of temporary nature.

22 Banking Codes and Standards Board of India Annual Report 2016-17

Investments under Held to Maturity (HTM) category are carried at Acquisition Cost. The premium paid, if any, under this category is amortised over the residual life as per the guidelines of the Reserve Bank of India and the policy of the trust. 7. Related Party Transaction : Disclosure is made as per the requirement of the AS -18 – Related Party Disclosures and the same is given as part of Notes to Accounts. 8. Provisions, Contingent Liabilities and Contingent Assets : Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent liability is disclosed in case of possible obligation where the probability of outflow of resource is not certain. Contingent Asset is not recognized in balance sheet. B. NOTES TO ACCOUNTS : 1. Related Party Disclosure : Reporting Enterprise : Banking Codes and Standards Board of India Name of the related parties and description of relationship : Governing Council Members – a. A C Mahajan (Chairman) b. C Krishnan c. Rama Bijapurkar d. Nalin M Shah (Upto 12th February 2017) e. Shubhalakshmi Panse f. Uday Phadke (From 14th February 2017) g. Anand Aras (Chief Executive Officer) (w.e.f 27th July 2015) h. N. Raja (Chief Executive Officer) (Upto 31st July 2015)

Details of Related Parties transactions are as under :

Particulars Governing Council Members

2016-17 2015-16

Rs. Rs.

Remuneration to Chief Executive Officer 34,17,434/- 36,34,200/-

Remuneration and Sitting Fees to Trustees 35,35,787/- 27,03,489/-

23 Banking Codes and Standards Board of India Annual Report 2016-17

2. Public Awareness Fund : The Board has transferred an amount of Rs.2,31,12,294/- to the Public Awareness Fund FY 2016-17 from the Income and Expenditure Account. Public Awareness Fund to the tune of Rs.2,08,51,786/- was transferred to Income & Expenditure account during the FY 2016-17 to the extent of expenditure incurred on object of trust. 3. Previous Year’s figures The corresponding figures for the previous year are re-grouped / re-classified, wherever necessary. Signatures to Schedule A to F

For Banking Codes and Standards Board of India For Mukund M. Chitale & Co. Chartered Accountants Sd/- Firm Regn. No. 106655W (A.C. Mahajan) Chairman

Sd/- Sd/- (Anand Aras) (A. V. Kamat) Chief Executive Officer Partner Membership No. 39585

Place : Mumbai Place : Mumbai Date : June 21, 2017 Date : June 21, 2017

24