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Know Your Rights on Banking

The number of Banks in operation in Sri Lanka amounting to twnty-four out of which nine Banks are Licensed Specialized Banks. Bank density (Number of Bank branches per 100,000 person) is around 11. With the rapid expansion in Bank branches it is estimated that the Bank density will exceed thirty by year 2015. According to a recent study carried out by the Central Bank, Sri Lanka’s low level of financial literacy has improved primarily due to developments in the country’s telecommunication and information technology infrastructure. Meanwhile Sri Lanka’s Central Bank put forward a “Customer Charter of Licensed Banks” in which it outlined a ‘code of conduct’ for licensed banks, as well as the customers of these financial institutions, with the aim of providing “key standards for fair banking practices” in 2011. Having said it’s not rare to find customers victimized on numerous occasions due to lack of awareness about their rights in Banking. This article is to briefly outline the rights of the banking customers.

Right to Receive information about the banking Products/Services

  1. The licensed banks should help the customers to understand the financial products/services offered by providing   adequate information about them, explaining their financial implications and assisting the customers to choose the appropriate banking products/services.
  2. Brochure/leaflet about the products and services offered should be written in simple language.
  3. Fees/charges, commission, interest etc., charged from customers should be clearly stated in uch brochures.
  4. Customers should not be misled by the media and promotional material used by the Banks.
  5. A periodic statement should be sent to customers either in printed form or electronic form opted by them regarding transactions and balances in their deposit or loan accounts.
  6. Statements for credit cards should set out the minimum payment required and the total interest amount charged if only the required minimum payment is made and late payment fee if the minimum payment is not made.
  7. The following information should be conspicuously displayed in the Head Offices and all branches and other banking outlets of the licensed banks.
  • i. Current interest rates on all deposit and loan products
  • ii. Buying and selling rates of foreign currencies
  • iii. Credit rating of the bank with underlying specifications
  • iv. The contact details of the Financial Ombudsman and Credit Counseling Centre
  • v. Banking hours and Holiday notices
  • vi. Any other relevant information

Right to know the ‘Terms & Conditions’ on Products/Services

This is the tricky part where most of the Financial Institutions thrive by misleading the customers as the “Terms & conditions” are printed in tiniest letters that cannot be read in naked eye. So be vigilant next time you banking and make sure your banker adhere to following;

  1. The ‘Terms and Conditions’ associated with each product or service should be available in all three languages and should be clearly explained and a written confirmation should obtained from the customer that the details of the products or services and their terms and conditions were received, explained and understood;
  2. The details of the bank’s general charges such as interest rates, fees and commissions, if any, required to be paid by the customer including the method of computing interest charges.
  3. The course of recovery actions a bank may follow in the event of any default by the customer on his/her obligations and bank’s expenses that will be reimbursed from the customer.
  4. The disclosure of customer information to a party legally to obtain such information.

Right to receive Compensation in the event of withdrawal/cancellation of products/services by the Bank

In the event a licensed bank seeks to withdraw/terminate a product or service already on contract, especially deposit products, customers have the right to receive a reasonable time with an exit compensation scheme disclosed in advance

Right to know the details of the agents appointed for customer services

This is to prevent customers from Harassing, abusive debt collection practices, Disclosing information to others, misleading by giving false information about products/services and getting signatures for any security documents outside the bank.

Right to resolve the complaints with transparency and effectively.

The Banks should implement a quick and effective resolution mechanism on disputes between customers and banks by rectifying disputes quickly, handling complaints within a short period, directing to take the complaints forward if the customer is still not satisfied and reversing any charges that applied due to a mistake.

Right to receive Special attention and Care

The customers such as elderly, disabled or customers with low financial literacy have the right to receive special attention to facilitate them to have a fair access to banking services.

If you have any question related to this topic, please leave a comment below. Also check out my other articles related to banking and finance.

Sandun W

Sandun joined Lanka Help Magazine as a contributor in June, 2011. He has been consistently writing articles to our magazine. Many useful articles of this site are under Sandun's name.

2 thoughts on “Know Your Rights on Banking

  1. I always have problem with credit cards. It is always better to understand all the rules, regulations, terms before you get a credit card. I have had enough of troubles when trying to cancel my cards. 
    Also, I think it is high time for Sri Lankan bank to use advance technologies and expand to online banking and easy customer care by phone.

  2. All most all the Sri Lankan Banks offer Internet Banking,Phone Banking and SMS Banking facilities. But the problem is most of the people still afraid to use the technology due to lack of knowledge.Even the use of ATM cards is relatively low and there are people who wait long time on que to withdraw and deposit money.

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