Finance Ministry: You must have noticed during the bank visit that the bank staff tries to sell you an insurance policy. Many times you also take an insurance policy at the behest of the bank staff. But hardly you have been given complete information about it.
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After such cases came to the fore, a letter has been written by the Finance Ministry. The Finance Ministry has directed heads of public sector banks to put in place a robust mechanism to curb ‘unethical practices’ in the sale of insurance policies to customers.
Complaints received by the Department of Financial Services
Such cases are continuously coming to the notice of the Ministry of Finance that customers are not given correct information for sale of insurance products. In view of this, this step has been taken by the Finance Ministry. In a letter to the Chairman and Managing Directors of public sector banks, it has been said that the Department of Financial Services has received complaints that fraudulent and unethical methods are being adopted by banks and life insurance companies for sale of policies to bank customers .
More cases of Tier-2 and Tier-3 cities have also come to the fore, where life insurance policies have been sold to customers above the age of 75 years in Tier-2 and Tier-3 cities. Generally, the products of their associate insurance companies are promoted by the banks.
If the customers refuse to take the policy, then the branch officials explain with great enthusiasm that they are under pressure from above. When customers go to take any kind of loan or buy fixed deposits, they are asked to take insurance etc.
A letter in this regard has already been issued by the department. In this, it was advised that no bank should force customers to take insurance from a particular company. It is also reported that the Central Vigilance Commission (CVC) has objected that incentives for selling insurance products not only put pressure on the field staff but also affect the core business of the banks.
In such a situation, due to the greed of the employees for commission and incentives, the quality of the loan can be ‘compromised’.
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