V Sivakumar 26 September 2025

Can banks drive away customers as per rbi rule

Recently I have come across a Reputed Small Finance Bank where they Publish that they will try hard to resolve the Problem to customer Satisfaction, If customers are not convinced they can leave the Bank.

"While most of our customers understand such operational constraints of the Bank, a few resort
to sending communication, the content of which, leaves a lot to be desired as the language
tends to be provocative, unparliamentary, rude and disruptive. While such reaction from
customers may be borne out of anxiety, it is needless to mention that it impacts the morale,
dignity of our employees and consequently the service to be rendered to such customers.

Under such circumstances, to avoid embarrassment to both the sides, we may be constrained
to advise such customers to close all their relationships with our Bank forthwith.

Can a Bank under RBI Guidelines can have their Own Rules and Regulations.

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3 Replies

P. Venu (Advocate) 26 September 2025

If a real issue, you may bring matters to the notice of the RBI and seek their response.

T. Kalaiselvan, Advocate (Advocate) 27 September 2025

The banks under RBI guidelines can have their own rules, but only on matters not covered by the RBI's mandatory regulations.

Banks must follow RBI guidelines on core functions like interest rates and compliance, and any of their own rules must not contradict these directives.

The RBI sets the framework, allowing banks flexibility in areas like minimum balance policies, which are then set by the individual bank's board.

Banks can determine their own rules for other product features and services, as long as they comply with RBI guidelines.

For example, a bank may have a specific policy on the duration of guarantees it issues beyond the 10-year period, with the approval of its Board of Directors.