Surinder Chawla, Head- Retail Liabilities and Wealth Management, RBL Bank, encourages the bank’s customers to use debit cards while travelling abroad.

The bank is now charging zero foreign currency fee, as against 3.5 per cent charged by many other banks on all spends made in foreign currency, for a limited period. In a conversation with Moneycontrol, he talks about the bank’s lowest foreign currency mark-up campaign on debit cards, the way the bank ensures the right investment product are sold to the customers, the automated teller machine (ATM) interchange fee structure, digital retail savings accounts and more. 

 

Wealth managers are under the scanner now because of the recent Karvy wealth fiasco, where a first information report (FIR) has been filed. What is RBL Bank doing on its part to ensure that it sells a product to the customer only if it is suitable?

 

We are very conscious in our investment products recommendation to customers. So, specifically for the wealth management space, there are multiple controls and checks that we have built in our system.

 

First of all, we are in the distribution space of investment products. We are not an advisory, so we don't advise clients on where to invest. We are a distributor, so we have a list of products that we are selling. From the list, customers choose what they think is right or wrong for them.

 

Second, we do our own research and shortlist the products that we want to sell. The selected shortlist is about 10 per cent of the products that are available in the mutual fund space.

 

Third, we take advice and research from renowned agencies such as ICRA and CRISIL to shortlist the products and update the recommendation list periodically.

 

Fourth, our relationship managers are experienced professionals and fully certified as per regulations.

 

Fifth, for every customer, before we actually start on-boarding them into the wealth space, they go through a full risk assessment questionnaire. This helps us to understand the investor’s risk appetite, i.e., whether investor is conservative or aggressive.

 

At the backend, we also have a product team to ensure that the right products are sold to the customer according to his/her risk profile. We also have a mechanism, wherein at a second level bank executive (excluding relationship managers) checks with investors whether they have understood the investment product being sold and does the investment scheme really suit their risk profile.

 

Recently, the Reserve Bank of India (RBI) sets up a committee to review the ATM interchange fee structure. What are your expectations from the committee on ATM charges and how it is likely to affect money withdrawal from account holders?

 

The interchange fees were fixed many years back. Because of security reasons, multiple security features have been brought in to upgrade the ATMs as well as the network around them. So, the cost of managing ATMs has gone up in the last few years. Now, the committee is set up to review the ATM interchange fee structure since it’s not changed despite the increase in costs for ATM operators.

 

We would suggest that it is time RBI deregulates this interchange charges, and allows banks to decide their own rate structure for charging other banks and customers. Depending on the bank’s size and structure, let them decide on charges. If you want to make it a regulated high-level charge, it will actually have a negative impact on smaller banks. So, our recommendation would be to make it open and deregulated. Let banks decide what they want to charge and negotiate fees with other players.

 

In case the committee decides to increase the interchange fees, then a lot of banks will pass on these charges to the customers. But, if it is deregulated, then the market will find its own value and that is the best for the customers as well.

 

Elaborate on your recently launched foreign currency mark-up campaign on debit cards.

 

While using a debit card abroad for transaction in a foreign currency, there is a rate of exchange which is applicable and then the banks charge a certain rate over and above that, which is known as mark-up fees. We wanted to encourage usage of our debit cards more aggressively when our customers travel abroad. So, as part of the offer, card holder shall be levied zero foreign currency fee instead of the 3.5 per cent charged by other banks on all spends made in foreign currency, during the ‘offer period’. The offer is available till September 30, 2019.

 

The offer is valid on international spends in foreign currency, i.e. all purchases made in foreign currency including purchases made on international websites online and merchant locations abroad. For transactions in foreign currency, only conversion rate as per forex market will be applicable which will be competitive and benefit the customers. While using our debit card, you don’t have to carry another card (mainly forex prepaid card which is preferred) while travelling abroad and you don’t have to remember multiple pins while transacting.

 

How has the journey of digital retail savings account since its initiation been?

 

We started offering the digital retail savings account since March 2017. We were amongst the initial banks to launch digital retail savings account after Reserve Bank of India (RBI) consents came in. Our initiative was largely focused on making sure that the journey for the customer is seamless and comfortable by using our banking operations sitting at home, using mobile phones and laptop (RBL Bank serves customers only digitally). Our attempt was to make sure that customer is able to get a full suite of banking products on the same platform. Based on our customers’ feedback, we kept investing in the technology solutions and improved user interface (UI).

 

We are offering the same product range and services as any traditional bank on our digital platform to customers. So, customers can invest in fixed deposits, apply for loans and credit cards, shop with merchants we have tied up with, etc. We’ve created our digital offerings as a tool to provide service, engage customers and sell as many products as we can to the customers. We are providing full banking to customers at their fingertips and therefore it works for us.

 

Published On : 01-07-2019

 

Source : Money Control