fine tuning the regulatory framework and supervisory rigour as risks evolve and new challenges emerge, the reserve bank as a regulator and supervisor constantly focuses on being vigilant, adaptive and proactive with regard to the regulatory frameworks and supervisory systems to safeguard the stability of the financial system. over the past few years, the reserve bank has undertaken a comprehensive review of regulations under the aegis of the regulations review authority ( rra ) 2. 0 constituted by it. apart from withdrawal of many redundant instructions, the rra has also made valuable recommendations to ease compliance and reduce the regulatory burden ; streamline the reporting mechanism ; and bring in more clarity in regulatory instructions. 3 / 6 bis - central bankers'speeches in recent years, the reserve bank has also comprehensively restructured the regulatory architecture for banks ( both commercial and urban co - operative banks ), nbfcs, housing finance companies ( hfcs ), asset reconstruction companies ( arcs ), digital lenders, micro - finance lenders and core - investment companies. thus, the financial sector regulations are now not only in sync with the changing times but also forward looking with the required readiness to take further proactive measures as may be necessary. steps have also been taken to set up self - regulatory organisations ( sros ) for nbfcs and fintech companies. this is a completely new approach to facilitate greater consultation and close interface with the stakeholders in the system. it will make regulations even more dynamic and proactive. in the same breath, i would like to emphatically state that there is no intention to make frequent regulatory changes, but only to ensure that there is greater regulatory clarity and responsiveness to changing circumstances. the reserve bank has also significantly strengthened its supervisory systems, transitioning beyond an entity - focused approach to a more thematic and activity - based approach. we now look at sustainability of business models of banks and nbfcs. root cause analysis of problems and vulnerabilities are undertaken. advance action is initiated wherever we notice or smell a crisis. structural changes have been implemented within the reserve bank by creating a unified department of supervision5 to ensure holistic assessment of the financial sector as well as to analyse the health of multiple entities within a group. the idea is to enhance agility and comprehensiveness of supervision. unconventional methods are also being adopted now. onsite supervision of credit information companies has been made annual and intense. when problems appear too serious in a financial entity, a senior officer of the reserve bank

not be actively offered to customers. hence, understanding their customers and understanding their own product offerings needs to be the starting point of any customer service framework. 7. i have been informed that a recent bcsbi study on the practices followed by banks in respect of charges levied on deposit accounts has brought out several anomalies viz. fixing of charges based on competition instead of on cost plus basis, levying charges without providing any service such as for non - maintenance of minimum balance, levy of intersol charges, etc. visits by bcsbi representatives to bank branches also reveal several deficiencies in implementation of the codes. 8. clearly, more efforts are needed by pccos and banks to ensure that the codes are implemented and in turn, customer expectations are effectively met. i am told that the bcsbi is considering introducing a rating scheme for the banks based on their performance on code implementation and customer service parameters. such an exercise should cajole banks for creating an effective internal framework for ensuring that the principle of “ treating customers fairly ” gets ingrained into the organizational ethos. treating customers fairly 9. what do we mean by treating the customers fairly? can we define the principles of fair treatment and can we measure and compare quality of customer service within the banking industry? measuring quality of banking services is more difficult than measuring the quality of manufactured goods as services are intangible in nature and there is no “ real ” product that the customer takes home. even within banking, there are a variety of dissimilar services like retail banking, commercial banking, investment banking, etc. and, hence, standardized quality measurement becomes difficult. it can only be accomplished by focussing on the outcomes of customer experience. do we have the systems in place to seek feedback on what the customers feel about the services and quality of customer care? in the absence of an effective feedback mechanism, can we say that banks ensure fair treatment of their customers? fair treatment of customers is an ideal which we should all strive to achieve. the tcf ( “ treating customers fairly ” ) principles define standards which the institutions must aspire to meet so that the consumers are benefited and have increased confidence in the financial services industry. specifically, tcf is aimed at : • helping customers fully understand the features, benefits, risks and costs of the financial products they buy • minimising the sale of unsuitable products by encouraging best practices before, during and after a sale bis central bankers ’ speeches • transparent and non - discrim