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Very soon, distribution of mutual funds and insurance by banks will be subject to audit to check mis-selling.
An RBI committee constituted for reviewing customer service standards in RBI regulated entities like banks and NBFCs has proposed that banks should do audit of their third-party product sales.
Third party product sales include distribution of mutual funds and insurance by the bank sales representatives.
The committee said that audit function will ensure that there is no mis-selling by the sales representative.
The committee said, “Cross selling of third - party products by the sales team of the regulated entities should be subject to verification by the audit function to ensure that there was no mis-selling and all instructions / guidelines with respect to sale of such products were adhered to.”
Among other key recommendations are:
- Life certificates of pensioners can be submitted at any branch of their respective bank. Also, they are allowed to submit it any time of their choice
- Banks may facilitate door-step services to senior citizens and levy charges if any
- In addition, banks should make claim settlements simple and completely online for legal heirs and nominees of the depositors
- Obtaining nomination on deposit accounts will be mandatory for hassle free settlement of claims
- Banks should regularly update KYC and ensure continuity of bank accounts
- Also, banks should maintain a centralized database of KYC of all customers
