Chapter 21: Service Standards for Retail Banking (JAIIB – Paper 4)
1. What does BCSBI stand for in the context of retail banking?
A. Banking Council for Sustainable Banking Initiatives
B. Bureau of Credit Standards for Banks in India
C. Banking Codes and Standards Board of India
D. Board for Consumer Safety in Banking Institutions
BCSBI is the Banking Codes and Standards Board of India, which sets voluntary codes for customer service in retail banking.
2. Who can become members of the BCSBI?
A. Only public sector banks
B. Banks that voluntarily agree to follow BCSBI codes
C. Only foreign banks operating in India
D. Non-banking financial companies (NBFCs) only
Any bank, public, private, or foreign, can become a member of BCSBI by voluntarily agreeing to adhere to its service codes.
3. What is the main aim of the BCSBI?
A. Promote fair and transparent banking practices for customers
B. Provide loans to underbanked regions
C. Control bank interest rates
D. Regulate forex operations of banks
The main aim of BCSBI is to protect customer interests and ensure fair treatment by setting service standards for retail banking.
4. Which of the following is an object of the BCSBI?
A. Issue licenses to banks
B. Regulate banking mergers
C. Set monetary policy guidelines
D. Lay down codes for customer service and grievance redressal
One of the key objects of BCSBI is to frame codes to ensure transparency, good service practices, and proper grievance handling in retail banking.
5. BCSBI codes apply primarily to which banking services?
A. Wholesale banking and interbank lending
B. Retail banking services offered to individual customers
C. Only foreign exchange services
D. Government treasury operations
BCSBI codes are designed to improve service standards for individual customers using retail banking services like deposits, loans, and card operations.
6. What is the primary purpose of the Code of Banks' Commitment to Customers?
A. To ensure fair treatment and transparency in retail banking services
B. To regulate bank interest rates
C. To monitor bank profitability
D. To supervise interbank lending
The Code of Banks' Commitment is designed to ensure transparency, prompt service, and fair treatment for customers in retail banking.
7. Which of the following is included in the Code of Banks' Commitment?
A. Guidelines for foreign currency trading
B. Mandatory capital adequacy ratios
C. Service standards, grievance redressal, and transparency in charges
D. Regulation of mergers and acquisitions
The code outlines service standards, transparency in charges, and a framework for customer grievance handling.
8. What is the main objective of the Code of Banks’ Commitment to Micro and Small Enterprises (MSEs)?
A. Provide investment advice to large corporations
B. Facilitate prompt, fair, and transparent banking services to MSEs
C. Control government subsidies
D. Set export-import regulations
The MSE code aims to ensure that micro and small enterprises receive timely credit, clear communication, and fair treatment from banks.
9. Under the MSE Code, banks are expected to:
A. Charge higher interest rates for MSEs
B. Provide loans only after lengthy documentation
C. Avoid lending to start-ups
D. Process loan applications promptly and clearly communicate terms
The code emphasizes speedy loan processing, transparent terms, and support for MSE customers.
10. Which of the following is NOT a feature of the Banks' Commitment Codes?
A. Setting RBI monetary policy rates
B. Clear disclosure of charges
C. Grievance redressal mechanism
D. Timely service standards
The codes focus on customer service and transparency; setting RBI rates is outside their scope.
11. What is the primary function of BCSBI?
A. Regulate foreign exchange operations of banks
B. Develop, review, and promote adoption of codes of conduct for retail banking
C. Set RBI interest rate guidelines
D. Supervise mergers and acquisitions of banks
BCSBI’s main function is to create, monitor, and promote adoption of codes to ensure fair treatment and transparency in retail banking services.
12. How does BCSBI ensure that banks comply with its codes?
A. By imposing fines directly
B. By revoking banking licenses
C. By conducting regular reviews and publishing compliance ratings
D. By issuing directives on credit policy
BCSBI monitors banks’ adherence to codes through self-certification, reviews, and publicly publishing code compliance ratings.
13. What does a “Code Compliance Rating” indicate?
A. The extent to which a bank adheres to BCSBI service codes
B. The financial performance of a bank
C. RBI’s rating of a bank’s credit portfolio
D. The number of branches in urban areas
The Code Compliance Rating reflects how well a bank follows the BCSBI codes for service standards and customer treatment.
14. Which of the following is a benefit of banks publishing their Code Compliance Rating?
A. Reduces the need for RBI inspections
B. Determines interest rates for customers
C. Increases bank profits automatically
D. Enhances transparency and customer trust
Publishing compliance ratings improves transparency, encourages banks to follow service standards, and builds customer confidence.
15. Which of the following statements is TRUE regarding BCSBI?
A. BCSBI can penalize banks by revoking licenses
B. BCSBI promotes voluntary adoption of service codes by banks
C. BCSBI sets mandatory interest rates for retail loans
D. BCSBI directly supervises bank operations
BCSBI works on a voluntary basis, encouraging banks to adopt codes for customer service, but it does not have regulatory powers like RBI.
16. What is the main objective of a customer grievance handling mechanism in banks?
A. Increase bank profits by reducing complaints
B. Monitor employee performance only
C. Resolve customer complaints promptly and fairly
D. Reduce RBI inspections
The grievance handling mechanism ensures that customer complaints are addressed promptly, fairly, and transparently, enhancing trust and service quality.
17. Which of the following channels is commonly used by banks to register customer complaints?
A. RBI’s monetary policy notifications
B. Branch grievance boxes, email, customer care helplines
C. Board of Directors’ meetings
D. Annual financial statements
Banks provide multiple channels like branch grievance boxes, dedicated email IDs, and customer care helplines to facilitate complaint registration.
18. As per banking codes, within how many days should a bank acknowledge a complaint?
A. 1 day
B. 30 days
C. 60 days
D. 3–5 working days
Banks are expected to acknowledge customer complaints within 3–5 working days to ensure timely redressal.
19. Which authority can customers approach if their complaint is not resolved by the bank?
A. Banking Ombudsman
B. SEBI
C. IRDAI
D. Ministry of Finance directly
The Banking Ombudsman is an RBI-appointed authority that resolves unresolved customer complaints against banks.
20. What general information should banks provide to customers regarding grievance handling?
A. Only branch address and IFSC code
B. Contact details of grievance redressal officer, process, and timelines
C. Annual profit report
D. RBI circulars only
Banks must provide customers with clear information about grievance redressal officers, procedures, and expected timelines to ensure transparency and accountability.
21. What is the usual maximum time for resolving most customer complaints at the first level in banks?
A. 7 working days
B. 30 calendar days
C. 30 working days
D. 60 working days
Banks are generally expected to resolve most complaints within 30 working days from receipt of the complaint.
22. If a complaint is not resolved at the branch level, what is the next step for the customer?
A. Escalate to the Grievance Redressal Officer at the bank’s regional/head office
B. File a complaint directly with RBI without informing the bank
C. Wait for 6 months before taking any action
D. Approach SEBI
Customers can escalate unresolved complaints to the designated Grievance Redressal Officer at the bank’s regional or head office.
23. Under RBI guidelines, after how many days can a customer approach the Banking Ombudsman if the complaint is unresolved?
A. 7 days
B. 15 working days
C. 60 days
D. 30 days after escalation to bank authority
RBI guidelines allow customers to approach the Banking Ombudsman if the complaint remains unresolved after 30 days of escalation to the bank authority.
24. A customer complains about a delay in crediting a deposit. Which is the correct first step according to the grievance handling mechanism?
A. File a complaint with RBI immediately
B. Register the complaint at the branch or bank’s customer care
C. Approach the media
D. Wait for 3 months
The first step is always to register the complaint at the branch or bank’s customer care channel for timely redressal.
25. Case Scenario: A customer’s ATM card is blocked due to a technical fault, and they report the issue. The branch informs them that resolution may take 10 days. According to service standards, what is the bank expected to do?
A. Ignore the complaint until customer escalates
B. Advise customer to wait without providing any alternate solution
C. Provide a temporary solution, communicate expected resolution time, and keep the customer updated
D. Direct the customer to approach RBI immediately
Banks are expected to provide temporary arrangements (like a new card or alternate cash access), clearly communicate timelines, and update customers until full resolution.
