When the Reserve Bank of India (RBI) placed Yes Bank under a month’s moratorium in March, many customers from smaller banks tried to shift away to larger banks. RBL Bank was no different. Surinder Chawla, Head Branch Banking - RBL Bank, talks to Moneycontrol’s Hiral Thanawala to explain the repercussion. He further discusses on recommendation process being followed by bank’s wealth management division for its customers and precautions you need to take while undergoing video-KYC process with the bank while opening an account or applying for new credit card.
The havoc caused by Yes Bank fiasco had hurt your business as well. What was the immediate impact on savings and deposits from your customers? Do you think the pain is largely behind now?
Yes, retail depositors panicked. Some small depositors of smaller banks withdrew their savings and deposits. Around that time, we too, saw our deposits go away. But then we were able to recover within a month’s time.
Since then we have raised capital as an organisation and announced two quarter results which have given confidence to our customers / investors at large that the bank is stable and doing well. Our deposits since then have grown at 11 per cent in the July to September quarter, 2020 compared to the previous quarter.
The smaller and newer set of banks offer higher interest rates on savings accounts. Should customers shift their savings account to these new-age banks?
Do not just look at higher interest rates. Also look at the new bank’s services. It should be a long-term relationship. The bank’s brand name, financial stability and management’s reputation must also be looked at. The bank you are choosing should be able to offer the entire bouquet of financial products you may require over a period.
Many cases of mis-selling of financial instruments by banks have been heard over the years. In the year of 2020, some banks were seen selling Additional Tier-1 bonds to individual investors under the garb of regular income and safe products. What has RBL Bank doing to ensure that it sells a right product to the customer?
We do not sell additional tier-1 (AT-1) bonds, market linked debentures or distribute structured products because as a bank, we are risk-averse.
Having said that, we are conscious of our investment recommendations. Our wealth management division has multiple controls and checks built in. As we are not an advisor (RBL has a mutual fund distribution license; it has not applied for a SEBI Registered Investment Advisor license), we don't advise clients on where to invest. We are a distributor, so we have a list of products that we are selling. From the list, customers choose what they think is right or wrong for them.
We do our own research and shortlist products that we want to sell. Our basket of funds is just about 10 percent of the schemes available in the mutual fund space. We also take advice and research from renowned agencies such as ICRA and CRISIL to shortlist the products and update the recommendation list periodically. We ensure our relationship managers are experienced professionals and fully certified as per regulations.
Before customers start a wealth management relationship with us, they fill a risk-assessment questionnaire. This helps us to understand the investor’s risk appetite, i.e., whether the investor is conservative or aggressive. We ensure that our investors understand the products they buy from us.
Also read: SEBI’s investment adviser regulations | The hits and the misses
Has RBL customers adapted to contactless banking transactions? How has the journey been so far?
We have seen accelerated adoption of digital banking options by our customers in the pandemic times. Mobile and net banking has grown by 70-80 per cent this financial year compared to previous year. We have also added the new channels to facilitate transactions and customer inquiries such as a chatbot on our website and WhatsApp banking to resolve the queries of our customers.
Then on the account opening side we started a video KYC (know your customer) process to sign up new customers. We launched virtual debit cards for our digital customers. So, the new customers do not have to wait for plastic cards for making a transaction on e-commerce websites.
Our overall new customer acquisition is significantly higher than previous years. This is because of the increase in our digital footprint. We are now opening 35,000 to 40,000 new accounts a month, earlier it was around 20,000-22,000 new accounts per month.
While under-going video KYC what are the precautions customers need to take so the personal details are not shared to imposter representing from the bank?
The video KYC is carried out only via a bank’s website or its mobile application. There is no requirement for any third-party video calling applications. So, do not click on the unknown link in messages or email to complete the video KYC.
To secure yourself from any fraudulent activity, you must ask the verifying person on video-call taking you through the KYC process to show his bank identity card, get his full name and employee ID number for reference before beginning the video KYC process. The customer shouldn’t share one-time password (OTP), CVV on cards, PIN or any confidential related parameters while under-going the video KYC process.