Financial services secretary Vivek Joshi has said that public sector banks have been asked to check mis-selling of insurance products and ensure the protection of account holders’ interests.

Banks have been sensitised on the matter, as the Department of Financial Services (DFS) regularly gets complaints that fraudulent and unethical practices are being adopted by banks and life insurance companies for procuring policies from bank customers.

“Banks have been asked to give utmost importance to the interest of account holders,” he said. There have been instances where life insurance policies were sold to customers aged above 75 years in the smaller cities.

Usually, banks push products of their subsidiary insurers. When resisted by customers, branch officials would sheepishly admit that they were under pressure from the top. Insurance products are pushed when customers go to seek any kind of loan.

It is also conveyed that the Central Vigilance Commission (CVC) has objected, as incentives for selling insurance bring not only pressure on the field staff but the business of banking also gets affected and the quality of advances may get compromised.

PTI