Bank customers are disenchanted with the services offered to them.
In the last three financial years through March 2019, customer complaints to the Reserve Bank of India’s banking ombudsman jumped nearly 50 percent to 1.96 lakh, according to the annual report of the RBI’s ombudsman scheme. The count rose 19.5 percent from 1.64 lakh in the previous fiscal.
The average turnaround time for disposal of complaints, however, fell from 53 days in 2017-18 to 47 days in 2018-19. That came despite a considerable increase in complaints pertaining to digital transactions which require more time for investigation and analysis of documents, the report said.
The central bank said the majority of complaints received during the year pertained to non-observance of fair practices code, although the count declined over the previous year.
While the number of issues related to automated teller machines and debit cards increased in FY19, complaints regarding pension, levy of charges without notice, credit cards and remittance declined.
Complaints about “misselling”, however, rose 93 percent over the previous fiscal to 1,115.
Customers of State Bank of India and HDFC Bank Ltd., India’s two largest banks, submitted the highest number of complaints under the Reserve Bank of India’s ombudsman scheme, the banking regulator said.
Public sector banks other than SBI contributed around a third of the total complaints, while private banks contributed 28 percent. Regional rural banks and primary urban cooperative banks saw a dip in their contribution to the total complaints.
While state-run banks, including SBI, led in the total number of complaints, data showed that customers of private banks were more unhappy. Kotak Mahindra Bank Ltd. and Yes Bank Ltd. had the highest ratio of complaints for every 1,000 accounts. Other private lenders such as IndusInd Bank Ltd., HDFC Bank Ltd. and IDBI Bank Ltd. also showed a higher share of complaints per 1,000 accounts.
Foreign banks such as Qatar National Bank and AB Bank Ltd., too, had a high ratio of complaints per 1,000 accounts.
The northern zone, comprising cities like Chandigarh, Dehradun, Jaipur, Jammu, Kanpur and New Delhi, contributed the most complaints. The southern zone, with cities like Bengaluru, Hyderabad, Chennai and Thiruvananthapuram, came second.
Nearly 48 percent of complaints were lodged by bank customers in urban areas. Complaints from metropolitan areas accounted for 27.90 percent, while semiurban and rural areas accounted for 12.06 percent and 11.67 percent, respectively.
“Recognising that relatively lower share of complaints received from rural and semi-urban areas highlights the need to scale up the awareness campaigns in these areas in addition to taking initiatives to undertake such programmes in local languages, uniform guidelines have been issued to OBOs (office of banking ombudsman) for selection of venue, conduct of programmes and evaluation of their impact so as to maximize their impact,” the central bank said.
Out of the total number of complaints lodged in 2018-19, 92.44 percent were by individuals. Of these, 0.68 percent complaints were lodged by senior citizens. The second category of complainants was “Individuals–Business” with a share of 2.81 percent.
The RBI had, in the year ended March, introduced a single-window for complaints to be filed against banks and non-bank lenders. The ombudsman scheme received 3,991 complaints in FY19 against 675 complaints in the four months of operation in FY18. Here again, non-adherence to fair practices code was the largest contributor to the complaints.
Bajaj Finance Ltd. received more than 1,300 complaints in FY19—the highest among non-bank lenders—followed by Fullerton India Credit Company Ltd., with 155 complaints.
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