In the Reserve Bank's Integrated Ombudsman Scheme, complaints by banking customers increased 32.81 percent in one year. They reached 9.34 lakh. This dramatic increase in complaints suggests that customer service standards have declined within the banking industry, and highlights the need to improve.
The complaints were filed with 24 Offices of RBI Ombudsman and the Centralised Receipt and Processing Centre of the RBI.
The RBI reported in its Annual Report on Ombudsman Scheme that a significant number of 85 281 complaints were received (as high as 29,01 percent of all complaints) regarding loans and advances. This represents a 42.70 percent increase compared to last year.
The number of complaints related to mobile/electronic banking increased by 32.61 percent from the previous year. The report stated that while 46,358 complaints were made about opening and using deposit accounts (showing a 34.45 percent increase), 42,329 complaints (14.40%) were received about credit cards. This was a 23.95 percent rise over the previous years.
The RBI reported that Chandigarh and NCT of Delhi were the top contributors of complaints to ORBIOs, in terms of the number of complaints per lakh accounts (deposits and credits). Gujarat, Uttarakhand, and Rajasthan were the next five highest contributors. Mizoram was the lowest contributor, followed by Nagaland, Ladakh and Manipur.
The Reserve Bank found that lenders were using unfair practices to charge interest during the on-site examinations of banks for the period ending March 31, 2023. Some unfair practices included charging interest from the day of sanctioning the loan or the date the loan agreement was executed and not the actual date the funds were disbursed to the customer. In the same way, when loans were disbursed via cheque, interest was often charged on the date of cheque even though the cheque wasn't handed to the customer for several days. Some REs charge interest on loans disbursed or repaid during a month.
Customers have complained about fraudulent activity, uninvited cards being issued, and disputes with retailers. Customers complained of not receiving promotional and rewards benefits from credit cards, and about arbitrary changes to card norms.
The RBI Ombudsman's report stated that a total 934,355 complains were received between April 1, 2020 and March 31, 2024 at ORBIOs. This represents a 32.81 percent increase over the previous years. The ORBIOs received 25.24 percent more complaints from FY2023 than FY2024. The CRPC received 36.59 percent more complaints from FY2023 than FY2024.
In FY 2023-24, the share of individual complaints in total complaints reached its highest level at 256 527 (87.27%). The RBI reported that complaints against banks and non-bank financial companies accounted for 82.28 percent and 14.53 percent of total complaints, respectively.
The ORBIOs handled a total number of 284,355 cases during the past year. This represents a 95.10 percent disposal rate. The ORBIOs have disposed of 192,886 complains, which is 67.83 percent of all complaints.
It said that 57.07 percent of maintainable complaints resolved by mutual settlement, conciliation, or mediation, while 40.78 percent of maintainable complains were rejected due to lack of deficiency in service.
CRPC received 766,957 (including those assigned to ORBIOs/Consumer Education and Protection Cell), a 30.10 percent increase compared to last year. CRPC disposed of 758,483 of these complaints.
While 631.876 complaints were classified as non-complaints/non-maintainable, 126.607 were assigned to ORBIOs/CEPCs for further resolution. Of the non-maintainable cases, 47.75 percent were closed as First Resort Complaints. The report stated that the complainant approached directly RBI before lodging a complaint with the RE concerned.
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