After SBI, Bank of Baroda orders officers not to conduct parties related to third party products
Public sector lender Bank of Baroda (BOB) has issued a directive to its zonal heads, prohibiting the conduct of wealth business campaigns related to life, general, and health insurance policies or mutual funds until March 31. The move comes in response to growing concerns about mis-selling practices within the industry.
“It is further advised that all zones and field units should not conduct any business conclaves, seminars or reward and recognition programs/ facilitation program during this quarter and until further instructions,” the letter stated.”It is also directed by our top management that no campaigns including any local training programs/reward programs etc, with any of our channel partners shall also be conducted till March 31, 2024, ” it added.
Internal Communication: An internal letter dated January 12, accessed by Moneycontrol, reveals BOB’s decision to curb wealth business campaigns. The bank emphasizes the need to ensure proper product suitability, alignment with customer requirements, and the recording of customer consent at all stages of the sales process.
Industry-Wide Crackdown: BOB becomes the third bank, following State Bank of India (SBI) and Chennai-based Indian bank, to crack down on mis-selling practices. SBI had earlier instructed senior employees to refrain from conducting business conclaves, seminars, or felicitation functions until March 31, emphasizing the need for prior approval for any deviation.
Withdrawal of Campaigns: The internal letter specifies the withdrawal of all existing campaigns, including the PRIDE 6.0 campaigns, for the current quarter. Additionally, zones and field units are directed not to organize business conclaves, seminars, or reward and recognition programs during this quarter.
Department of Financial Services (DFS) Advisory: The Department of Financial Services had previously communicated to public sector banks about an alarming increase in customer complaints related to forced purchases of insurance products. Banks were warned against adopting fraudulent and unethical practices, especially selling policies to elderly customers.
Industry Pressure and Practices: Bankers, on condition of anonymity, have revealed the immense pressure from top management to sell third-party products, including insurance. Targets for selling these products have led to informal penal actions for non-compliance and perks for meeting targets, such as lavish parties.
Employee Perspectives: A Bank of Baroda manager, speaking anonymously, expressed concerns about the disruption of core banking work due to the increasing focus on selling insurance products. The All India Bank Employees Association (AIBEA) General Secretary, CH Venkatachalam, highlighted the practice of insurance companies offering gifts and lavish incentives to bank managers promoting their products.
This regulatory intervention and internal directive from BOB reflect the industry’s efforts to address mis-selling challenges and ensure responsible wealth business practices.
Now senior management is realising just to earn fee income and dancing on party songs staffs were forced to sell TPD and losing faith of their own customers sometimes, lot of banker have forgotten their key roles and has became agent of these companies. Hope for a change, sell what is needed by the customer.
Every controller of SBI calls the BM how much you sourced today. They want insurance only . No business other than SBI life is required. The STDR customer also misguided in this regards
This unethical practices were going on for last about 10 years. I as Chief Manager in a very big Public Sector Bank was transferred to a distant branch in 2018 for not succumbing to my Deputy General Manager.
A banker should do only own bank business and it’s customers services.
We have to serve the public and offer them what they need, instead we are forced to sell these useless insurance products and credit cards which is much more dangerous.
Credit cards lead to financial indiscipline and if credit card slips to NPA, other performing accounts of customers also slip to NPA. Finally the customer future is in trouble
These letters are just an eyewash and the Campaigns are still running as they were previously in SBI.
This selling of third party products has gained roots in the Banking Industry as they are mainly beneficial to the Top Management only & few ZMs, RMs. The Branch Managers have to dance to the diktat of the Higher Ups who go to any length to pressurise the Branch staff to achieve Big targets since they will be rewarded by these TP Companies with Big Rewards & Foreign Trips. The main business of Banking in PSUs has got totally sidelined as the focus is totally shifted to these Rewarding products by the Top Management. The entire manpower & infra are now directed to focus in this new direction. The public money in the bank is being utilised to host various conferences, seminars, get togethers & parties. Thus the Core business of Banking is relegated to back seat. This should have been the actual focus for the Top Management. But sadly the focus lies somewhere else. Many a times the customers are forced to take up TP Schemes where incentives are beneficial to Management. At times they are not made fully aware of the TP Products’ benefits, money to be invested, time period of investing etc. leaving the customers high & dry after selling the TP products to them.
Hope good sense prevails especially when they are dealing with public money. It is high time this TP is totally stopped & a complete ban on all such products & all its related activities are put in place.
Let us hope Banking will now be the Real Focus !!!🙏