Know your confidentiality rights while banking

Ever wondered where the scores of telecallers that hound you get your contact details from? Now, remember the last time you casually gave away your mobile number while filling up that feedback form at your favourite diner.

Chances are that information was later sold to a third party, which sold it to some young company looking for a database to sell its products. However, it’s not only your diner. Is there a possibility that your bank is doing the same thing?

The answer is ‘NO’. There are stringent codes drafted by Banking Codes and Standards Board of India (BCSBI), a quasi-regulatory body which protects customer rights, and restricts banks from sharing customers’ confidential information.

Recently, a woman from a tier II city in northern India was appalled to know that her bank statements, from a joint account she held with her sister, were produced in court as evidence in a family dispute between her and her husband. Neither she, nor her sister had authorised the bank to release this information — it was procured illegally by her husband.

The bank tried to justify its stand by claiming it wasn’t aware of the family dispute and that the husband had all the required documents with him. This doesn’t reduce the severity of the offence committed by the bank. No information can be supplied by the bank without an authorisation by the account holder (or either of the account holders, since this was a joint account).

A breach of privacy is a breach of trust. If a bank shares customer information it is not supposed to, even accidentally for that matter, it has breached its fundamental duty of confidence to its customer. Customers rightly expect high standards of security from their banks, especially in today’s day and age when information is the most important resource.

If customers discover that their private information, especially information about their finances has been wrongly divulged to someone who should not be privy to it, it could lead to unhappiness and frustration, but more importantly, severely compromise our financial security. True, we hold banks up to high security standards, but it is important to be educated about how to address our grievances in the scenario that a breach of privacy and confidentiality does occur.

The Banking Codes ensure that member banks comply with a set of codes to protect and deliver quality services to the consumer. The presence of a body as such legitimises complaints that consumers may have against their banks and offer a simple redressal procedure.

For instance, in the case of breach of trust, a customer can approach the customer service officer at his bank. If he finds the response inadequate, the customer may approach the Banking Ombudsman of the region.

The Banking Ombudsman is an RBI sanctioned body to enable resolution of customer complaints relating to certain services rendered by banks. However, if the customer is not satisfied with the decision passed by the Banking Ombudsman, they can approach the customer court.

In the relationship between a customer and his bank, there is a deep underlying agreement to keep customers’ information secure. This confidentiality is not just confined to account transactions – the bank is not supposed to use this information for any purpose apart from what it was collected for, and cannot divulge this information to a third party without the explicit consent of the customer.

While there is a huge burden on banks to take into account the risks involved in the processing and the nature of data being created, maintained and otherwise disseminated, a customer needs to be aware of the risks they are getting into, and how to adequately resolve issues as such, if and when they appear.

 Banks are here to help facilitate our success in life, but to hold them up to absolute standards of perfection is unrealistic. Educating oneself and being an informed customer for any product or service is necessary to ensure that customers are never unduly cheated or harassed.

(The writer is CEO of Banking Codes and Standards Board of India)