Executive Summary:
This circular from the Reserve Bank of India (RBI) permits financially sound and well-managed (FSWM) Urban Cooperative Banks (UCBs) to voluntarily offer doorstep banking services. Non-FSWM UCBs require prior approval from the RBI. UCBs must establish a board-approved scheme aligning with provided guidelines and manage associated risks. The scheme's operation is subject to periodic review by the UCB's board.
Key Points / Main Content:
Eligibility and Approval:
* FSWM UCBs can offer doorstep banking services voluntarily.
* Non-FSWM UCBs require prior approval from the RBI Regional Office.
Scheme Formulation:
* Eligible UCBs must formulate a board-approved scheme for doorstep banking services.
* The scheme must align with the guidelines provided in the circular's enclosure.
Services Offered:
* Permissible services include cash and instrument pick-up, demand draft and cash delivery, and submission of KYC documents and life certificates.
* UCBs offering cash pick-up should train employees/agents to detect forged notes.
Delivery Mode:
* Services can be delivered through own employees or agents.
* Agent selection and compensation should adhere to a board-approved policy.
* Outsourcing guidelines from DoR.ORG.REC.2721.04.158/2021-22 dated June 28, 2021, must be followed.
Delivery Process:
* Receipts must be issued for cash and instrument pick-ups.
* Cash should be credited to the customer's account on the same or next working day.
* Demand drafts should be delivered against written requisition/cheque, not cash/instruments collected at the doorstep.
* Acknowledgement should be provided for KYC documents and Life Certificates collected.
Risk Management:
* Agreements with customers should limit the bank's liability for service failures beyond its control.
* Service should be considered an extension of branch banking.
* Cash limits for collection and delivery should be established.
* Technology risks must be managed.
Transparency and Compliance:
* Doorstep service charges must be board-approved, disclosed in agreements, and displayed on websites/brochures.
* KYC guidelines must be followed.
* Services should be offered at the customer's residence or office as stated in the agreement.
* The UCB is responsible for the actions of its agents.
* Outsourcing payment restrictions under Section 10(1)(b)(ii) of the Banking Regulation Act, 1949, apply.
Grievance Redressal:
* UCBs must establish an internal grievance redressal mechanism.
* The Grievance Redressal Officer's contact information should be accessible to customers.
* Customers can approach the Banking Ombudsman for unresolved complaints (for Scheduled Primary UCBs and Non-Scheduled Primary UCBs with deposits of Rupees 50 crore and above).
Scheme Review:
* The scheme's operation should be reviewed by the Board of UCBs on a half-yearly basis during the first year, then annually.
Impact Analysis:
Primary Urban Cooperative Banks (UCBs):
Impact: UCBs, particularly FSWM ones, have a new avenue for customer service and potential business growth, but they also bear the responsibility for implementing and managing the doorstep banking scheme according to RBI guidelines. Non-FSWM UCBs face restrictions and the need for prior approval.
Action Required: Eligible UCBs must formulate a board-approved scheme, manage risks, ensure transparency, and establish a grievance redressal mechanism. Non-FSWM UCBs must seek approval from the RBI before offering doorstep banking services. All UCBs must review the scheme's operation periodically.
Customers of UCBs:
Impact: Access to banking services at their doorstep, offering convenience, especially for those with limited mobility or time.
Action Required: Understand the terms and conditions of the doorstep banking service, including charges and the grievance redressal mechanism.
Employees and Agents of UCBs:
Impact: Employees and potential agents will need training and clear guidelines on procedures, risk management, and customer service. Agents will be subject to a selection process and must adhere to the UCB's policies.
Action Required: Employees/agents must be trained on detecting forged notes, following security protocols, and adhering to customer service standards.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
Banking Regulation Act, 1949: An act that regulates banking companies in India.
Primary Urban Cooperative Banks: Cooperative banks that operate in urban and semi-urban areas in India.
Doorstep Banking Services: Banking services provided to customers at their residence or office.
Department of Supervision of the Reserve Bank: A department within the Reserve Bank of India responsible for supervising banks.
Know Your Customer KYC Direction, 2016: A set of guidelines issued by the Reserve Bank of India regarding customer identification procedures.
Office of the Banking Ombudsman: An office that provides a mechanism for resolving complaints against banks.
Mumbai, Maharashtra: The city in which the Central Office of the Department of Regulation is located.
भारतीय �रज़वर् बक�
RESERVE BANK OF INDIA
RBI/2022-23/66
DOR.REG.No.45/19.51.052/2022-23 June 8, 2022
All Primary (Urban) Co-operative banks
Madam / Dear Sir
Section 23 of the Banking Regulation Act, 1949 – Doorstep Banking
In terms of Section 23 of the Banking Regulation Act, 1949 (AACS) Primary (Urban) Co-
operative Banks (UCBs) are required to seek prior approval of the Reserve Bank for
opening any new place of business including offering services at the doorstep of the
customer.
2. Keeping in view the above, it has been decided to allow financially sound and well
managed (FSWM) UCBs to provide Doorstep Banking Services to their customers on a
voluntary basis. However, Non-FSWM UCBs would have to seek prior approval of
concerned Regional Office of Department of Supervision of the Reserve Bank to provide
Doorstep Banking Services.
3. Eligible UCBs may formulate a scheme for providing Doorstep Banking Services to
their customers, with the approval of their Boards, in accordance with the guidelines
enclosed to this letter.
4. UCBs are further advised to take into account the various risks that may arise on
account of offering Doorstep Banking Services to customers either directly through own
employees or through agents and take all necessary steps to manage the same.
_____________________________________________________________________________________
�व�नयमन �वभाग,क�द्र�य कायार्लय,क�द्र�य कायार्लय भवन,12वीं/13वीं मंिज़ल,शह�द भगत �सहं माग,र्फोटर्,मुबई- 400001
टेल�फोन/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort,
Mumbai – 400001
�हदं � आसान है, इसका प्रयोग बढ़ाइए5. The operation of the scheme may also be reviewed by the Boards of UCBs on a half-
yearly basis during the first year of its operation. The scheme may be reviewed thereafter
on an annual basis.
Yours faithfully
(Shrimohan Yadav)
Chief General Manager
Encl: as above
2Annex
Guidelines for Doorstep Banking by UCBs
1. Services to be offered
UCBs can voluntarily offer the following banking services to individual customers/ natural
persons at their doorstep: -
i. Pick up of cash against receipt;
ii. Pick up of instruments against receipt;
iii. Delivery of demand drafts against withdrawal from account;
iv. Delivery of cash against withdrawal from account either against cheque received at
the counter or request received through any secured convenient channel, such as
phone banking, internet banking, etc;
v. Submission of Know Your Customer (KYC) documents;
vi. Submission of Life Certificate.
UCBs which offer services of pick-up of cash may take suitable steps to educate their
employees and agents to enable them to detect forged and mutilated notes so as to avoid
frauds and disputes with customers.
2. Mode of Delivery
i. Through own employees
ii. Through Agents
Where UCBs engage the services of Agents for delivery of services, it should be ensured
that the policy approved by the Board lays down the broad principles for selection of
Agents and payment of fee/commission etc. UCBs must refer to the guidelines on
Managing Risks in Outsourcing of Financial Services by co-operative banks issued vide
our circular DoR.ORG.REC.27/21.04.158/2021-22 dated June 28, 2021 and ensure that
the principles enumerated therein are complied with while offering Doorstep Banking
Services.
33. Delivery process
i. Cash collected from the customer should be acknowledged by issuing a receipt on
behalf of the UCB;
ii. Cash collected from the customer should be credited to the customer’s account on
the same day or next working day, depending on the time of collection;
iii. At the time of collection of cash, the customer should be informed of the date of
credit by issuing a suitable advice;
iv. Delivery of demand draft should be done by debit to the account on the basis of
requisition in writing/ cheque received and not against cash or instruments collected
at the doorstep;
v. Acknowledgment should be provided for collection of KYC documents, Life
Certificate.
4. Risk Management
It may be ensured that the agreement entered into with the customer does not entail any
legal or financial liability on the bank for failure to offer doorstep services under
circumstances beyond its control. The services should be seen as a mere extension of
banking services offered at the branch and the liability of the bank should be the same as
if the transactions were conducted at the branch. The agreement should not provide any
right to the customer to claim the services at his doorstep.
The UCB should provide cash limits (for collection as well as delivery) for their employees/
agents and customers, for doorstep banking. The UCB should also take all necessary
steps to contain technology risk while providing these services.
5. Transparency
Charges, if any, to be levied on the customer for doorstep services should be incorporated
in the policy approved by the Board and should form part of the agreement entered into
with the customer. The charges should be prominently indicated on the banks’ website
and brochures offering doorstep services.
46. Other conditions
i. UCBs shall ensure compliance with the Master Direction - Know Your Customer
(KYC) Direction, 2016 as updated and amended by the Reserve Bank with regard to
customer identification procedures while offering doorstep services to their
customers.
ii. The services should be offered at either the residence or office of the customer as
opted by the customer, the address of which should be clearly and explicitly
mentioned in the agreement.
iii. The agreement/ contract with the customer shall clearly specify that the UCB will be
responsible for the acts of omission and commission of its ‘agent’.
iv. UCBs shall keep in view the restrictions imposed by Section 10 (1) (b) (ii) of the
Banking Regulation Act, 1949, while making payments for the services outsourced.
7. Redressal of Grievance
i. UCBs should constitute an appropriate Grievance Redressal Machinery internally
for redressing complaints about services rendered by its employees/ agents. The
name and telephone number of the designated Grievance Redressal Officer of the
‘UCB’ should be made available to the customers including on the UCB’s website.
The designated officer should ensure that genuine grievances of customers are
redressed promptly.
ii. If a customer feels that his complaint has not been satisfactorily addressed, he will
have the option to approach the Office of the concerned Banking Ombudsman for
redressal of grievance/s in case of (a) Scheduled Primary (Urban) Co-operative
Banks and (b) Non-Scheduled Primary (Urban) Co-operative Banks with deposits
size of Rupees 50 crore and above as on the date of the audited balance sheet of
the previous financial year.
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