Communication in Local Languages: A Prerequisite to Curb Bank Frauds?

The Ernakulam Consumer Disputes Redressal Commission(CDRC) in an order has directed the banks to issue notices to customers in their local language, as fraudulent activities continue to plague the banking sector. The commission proposes making account opening forms, ATM card terms, SMS, and email alerts available in the local language. The commision has also shared the copy of the order with the Reserve Bank of India.  

This directive stems from a recent complaint filed against the SBI Cheriapilly branch by Ambika Gopi, a resident of Paravur. Ambika claimed that she incurred a loss of 45,000 rupees due to unauthorized ATM withdrawals over several days. However, she couldn't understand the messages received on her phone during these transactions. It was only two months later that she realized her money was gone, leading to a formal complaint with the bank and the police. SBI's defense was that the complaint was filed after two months, and they weren't liable for losses beyond seven days.

The Commission observed that Ambika, who couldn't read English, was unable to comprehend the SMS notifications she received. Therefore, the Commission emphasized that fraud incidents could be mitigated if the messaging was conducted in a language that the customer could understand.

Existing RBI Guidelines Overlooked? 
The direction of the Kerala CDRC aligns with the Reserve Bank of India's (RBI) guidelines, which stress the importance of using regional languages in banking communication. As per the circular issued in 2015, RBI insists the ‘use of Hindi and regional languages in transacting business by banks with customers, including communications to consumers’. In order to ensure that banking facilities percolate to the vast sections of the population, banks should make available all printed material used by retail customers including account opening forms, pay-in-slips, passbooks etc, in trilingual form i.e., English, Hindi and the concerned Regional Language- the circular directs.

Former RBI governor Raghuram Rajan had also advocated for banking and financial literacy in regional languages. “Hindi and other Indian languages can act as a bridge between the banker and the customer”- he stated when he was in office as the chief of RBI.  

In December 2022, Union Minister for Finance Nirmala Sitharaman said in the parliament that 9 Public sector banks(out of 12) have already fully complied with the RBI guidelines of providing Trilingual Services. Whereas a spot enquiry following the statement conducted by the Deccan Herald among selected branches of the 12 PSBs in the city of Bangalore found none of the branches fully comply with the guidelines.

Local Language vs Banking Language: Conflicts and Concerns
Conflicting language dynamics in Indian banking have led to significant debates and disputes. Instances include the Tamil Nadu government's appeal for Tamil language integration in all public interfaces of banks, and a Karnataka lecturer's Kannada check being rejected by SBI, resulting in an 85,000 rupee penalty imposed by the Consumer Disputes Redressal body. Moreover, incidents such as Kannada speaking customers opposing a banker woman speaking only in Hindi and English in Karnataka bank and a Mandya farmer being asked to leave a bank for not knowing Hindi have raised concerns over linguistic discrimination. These conflicts reflect broader concerns highlighted by customers urging banks to prioritize communication in regional languages, as emphasized in multiple media reports and discussions. The issue remains central in discussions of inclusivity, language rights, customer convenience and banking services.