Huge incentives to staff has led to mis-selling: RBI

Huge incentives to staff has led to mis-selling: RBI

Huge incentives to staff has led to mis-selling: RBI

MUMBAI: Senior Reserve Bank of India official has said that the huge incentives given to the staff has been one of the root cause for mis-selling of financial products while urging banks to work portability of account number for customers satisfaction. 

Speaking at the annual conference of Banking Ombudsmen, deputy governor S S Mundra blamed "challenging targets set for employees, incentive linked quotas, lack of training and fast rotation of frontline staff" for mis-selling and asked the top management to look into it. 

The DG also urged the banks to work towards Account Number portability in line with the telecom industry whereby a customer can retain their account number even if they switch to another bank. Mundra said that this move "will be a far-reaching step towards enhancing competition and improving customer service." 

Addressing the conference, Mundra directed that banks to move away from seeking ‘negative confirmation’ from customers on legal agreements that often have several fine prints. He said that banks should obtain ‘positive confirmations’ from the customers that they have read and understood the terms and conditions of the product or the service