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special featureBest Practices in Customer Service inIndian Banks : An Economist's PerspectiveM. R. Das *Customer service is a perennial topic for discussionfor the service sector in general and banking inparticular. For the metaphorically oriented, this reflectsthe perennial desire on the part of customers to aspirefor better and even better services always. Banks,being financial intermediaries, are “special” and so istheir customer service. Bank failures can precipitatein economic catastrophes as recently demonstratedby the crisis which is everyday taking a new turn.Therefore banks have to always remain alert to theneeds of its customers be they depositors, borrowersor service seekers.Best practices in customer service in banks cannotbe static. They exhibit inter-temporal and inter-spatialdynamism. What is best today may not remain besttomorrow and what is best in one place may not be thebest at another place. However, there are some bestpractices which remain eternally the best. Therefore,banks should always try to better the best. That is whywe wake up from time to time to search for thesebetter than the best practices. For example, what wasconsidered the best by Goiporia Committee in 1990 is nolonger considered the best today and therefore we hadDamodaran Committee on customer service in banks(2011). The entire banking landscape has undergone acomplete metamorphosis over the intervening period. Asthe saying goes, change is the only constant.Customer service becomes crucial in an industry wherethere is no or very little product differentiation. In today'sworld, where scientists have successfully cloned animalsand aim at even cloning human beings, product or servicecloning is a mere sleight of hands. The banking worldis full of such examples where products and servicesushered in by a bank have been copied within no time tooffer similar products or services. In such a scenario,customer service can really make a big difference.Customer service enhances the nation's income byfacilitating the sale of goods and services. Peopleengaged in rendering customer service in an industryare the people who make the ultimate activity of saleof products / services a reality.Customer service is not the monopoly of only bigindustries / services. Even a small economic factor cangive better service than their bigger counterparts.I would strive to make this paper not 'yet another' onebut a bit avant garde - you may call it an economist'sperspective. This essay is structured as follows :Section - 1 : conceptualizes what all comprise “bestpractice”;Section - 2 : depicts how good customer service can helpachieve better financial inclusion;Section - 3 : outlines the 'internal' customer service inbanks; andSection - 4 : concludes.Section - 1Conceptualizing Best PracticesWhat is meant by “Best Practices”? Is there a manualor handbook which defines “Best Practices in customerservice”? Probably not. One may recall here theexhaustive list of recommendations contained inthe RBI-appointed Goiporia Committee (1990) or thelatest Damodaran Committee (again RBI-appointed)on customer service in banks. It has to be definedin the context of each and every commodity or service,by setting certain standards for various parametersassociated with the product or service. A list of such bestpractices is enunciated below.* AGM (Economist), State Bank Staff College, Hyderabad.The Journal of Indian Institute of Banking & Finance October - December 2011 17