Government Banks take action against wrong selling of insurance and other products to customers

This month, several state-run banks, including the State Bank of India, Indian Bank, and Bank of Baroda, issued internal circulars prohibiting senior executives from organizing business conclaves, seminars, or felicitation events until the end of March.
Reason Behind the Circulars
The primary reason behind these circulars is to prevent the aggressive selling of insurance and mutual fund products through campaign-style promotions. Such campaigns often lead to executives being rewarded for achieving high sales targets, potentially encouraging forced selling or mis-selling practices to customers.
Pressure from Top Management
The pressure to sell these financial products trickles down from the top management level to individual bank branches. In many cases, customers are not adequately informed about the risks associated with the products, resulting in instances of mis-selling. This culture of rewarding aggressive sales and penalizing those who fail to meet targets is prevalent in the banking industry.
Examples of Mis-Selling
Notable examples of mis-selling include former Yes Bank executives allegedly selling Additional Tier 1 bonds to fixed-deposit holders and HDFC Bank executives force-selling GPS products to auto-loan customers. These practices have led to regulatory penalties and customer dissatisfaction.
Consequences of Mis-Selling
Mis-selling can have severe consequences, as seen in cases where retail investors found their money stuck in financial instruments like AT1 bonds when the issuing bank wrote them down during a bailout. The toxic culture of pressuring employees to meet sales targets has resulted in instances where products are sold to clients without considering their suitability.
Initiatives to Curb Mis-Selling
Amidst these challenges, some banks have taken initiatives to curb the mis-selling of products. Recent directives from large state-run banks may set a positive example for other financial institutions to follow suit. These actions are aimed at fostering a change in the operational culture within the banking industry.
Emphasizing Customer Needs over Sales Targets
It is crucial for banks to prioritize selling products based on the genuine needs of customers rather than meeting sales targets. This shift in focus can contribute to a healthier and more customer-centric banking environment.
Miss and forced selling under pressure of top management is a toxic culture due to which the ethics of core banking are compromised
All Banks should stop facilitating higher officials for their cross-selling targets, that will end the miss-selling.
I am an SBI customer and I have also experienced this type of unwanted solicitation with regard to SBI Life.The manager somehow coerces into buying one of their products. He/ she doesn’t consider the need of the ccustomer.
Most Banks,specially SBI,whenever a customer go for FD,new account opening,banks insist for life insurance,Mutual fund,health insurance and other financial products Even,their staff is compelled by Senior management for selling insurance products and threatens them if target is not achieved Everyone knows,from IRDA to Bank top management,but only shows that they are against mis selling but in fact paying full attention to sell insurance product selling instead of banking.They are getting lucrative incentives for achieving target.
Most Banks,specially SBI,whenever a customer go for FD,new account opening,banks insist for life insurance,Mutual fund,health insurance and other financial products Even,their staff is compelled by Senior management for selling insurance products and threatens them if target is not achieved Everyone knows,from IRDA to Bank top management,but only shows that they are against mis selling but in fact paying full attention to sell insurance product selling instead of banking.
My name is Ramana Kumar, need help from Max life insurance team, for ten years and more I was paying 10,000 per annum towards pension plan which build a corpus fund of 2.18 lakhs, unfortunately I received a call from MG road, Bangalore from a Deputy Manager & an advisor requesting for an appointment to meet me to hand over a cheque of 2.18 lakhs being accumulated, latter on the next day both of them convinced & requested to deposit an amount of 2.28 lakhs which would gain 12% per annum & I had to vest this fund only for I year. They abruptly took my signatures on a cheque & lot of signatures on many Maxlife documents and left, the advisor Mr.Mahesh delivered an insurance copy after cooling period by hand and when I mentioned that I was not interested in a regular insurance, both Mr.Mahesh misguided me saying to hold on to get 12% interest towards the end of the year, I was forced to belive their words, end of the year I started receiving calls from the backend team to pay 2.18 lakhs for the next year, which took me to surprise. I started explaining my difficulties to the back end team, which was only a collection team who promised me to get the problem resolved, this went on and on, to my surprise I noted Mr.Mahesh had taken ECS from me and my bank had debited INR 300 for 10 times, when approached Mr.Mahesh, he misguided me again mentioning it was by mistake and he said it would be deactivated. I was asked to share an OTP received and was deactivated, he promised the amount of INR 3000 would be returned. They robbed me of INR 230000, when I went looking for them at Mg road Bangalore Branch I understand Mr.Mahesh is resigned and the other deputy manager is transferred. My funds is struck for 4 to 5 years now, no one is answering me how to get this issue resolved. Need help from Maxlife team. Can reach me at 9902452707.
Sir, aap max life ke office me issue in written application do nd also say them about complaining to banking ombudsman, nd also take the help of banking ombudsman…..
If management doesn’t help the customer, or mislead the customer, therefore, RBI has given BANKING OMBUDSMAN for the us only….
If any query regarding BANKING OMBUDSMAN, GOOGLE it and read….
Same thing happens everywhere. The strength of the Insurance companies with the bank partnership is bancassurance channel, arond 75% business comes from it. After the transfer of the bank branch manager, the policies are lapsed, as there is no follow up for payment of renewal premium, except the msg. Once a policy is lapsed, the customer lose risk cover for which it is meant.