Banks Not To Use Unethical Practices: The Union Finance Ministry has once again given instructions to public sector banks. The ministry has asked the country’s premier banks to put in place a robust mechanism to curb ‘unethical practices’ in selling insurance products to their customers. For this again guidelines have been issued. Correct information is not given to the customers for sale of insurance products. Many times such complaints are coming to the fore.
letter to all banks
According to media reports, the Finance Ministry has asked all the banks to take concrete steps in this matter. The ministry, in a letter to the chairmen and managing directors of public sector banks, said that the Department of Financial Services has received several complaints regarding the sale of policies by banks and life insurance companies to bank customers. Fraudulent and unethical methods are being adopted for
what is the whole matter
Several such cases are coming to the notice of the Department of Financial Services, where life insurance policies have been sold to customers above the age of 75 years in Tier II and III cities. Bank branches promote the products of their insurance companies. When the customers refused to take the policy, the branch officials would vehemently explain that they were under pressure from above. When customers go to take any type of loan or buy a fixed deposit, they are also asked to take an insurance product.
Circular issued earlier also
The department has already issued a circular in this regard, stating that no bank should force customers to take insurance from a particular company. The Central Vigilance Commission (CVC) has objected that incentives for selling insurance products not only put pressure on field staff, but also affect the core business of banks.