Service complaints by bank customers rise 57% to over 300,000: RBI report

Consumer complaints about banking services jumped 57 per cent to 3.08 lakh for the year to June 30, 2020, the Reserve Bank said on Monday.

In its annual report on Ombudsman Schemes, the central bank said over a fifth of the complaints were about services at ATMs or with debit cards, followed by mobile or electronic banking at 13.38 per cent. Non-observance of Fair Practices Code (FPC) was at third place.

Complaints received regarding credit cards, failure to meet commitments, levy of charges without notice, loans and advances and non-adherence to the Banking Codes and Standards Board of India (BCSBI) norms increased this year as compared to previous year.

The number of complaints pertaining to 'Direct Sales Agent (DSA) and recovery agents' increased from 629 complaints in 2018-19 to 1,406 this year, it said.

The disposal rate declined marginally to 92.36 per cent, as against 94.03 per cent in 2018-19 as the surging complaints had to be handled by the same number of staff, it said.

On the non-bank finance companies front, there was a 386 per cent jump in the number of complaints received by the Ombudsman Scheme for Non-Banking Financial Companies at 19,432 and the disposal rate stood at 95.34 per cent.

The Ombudsman Scheme for Digital Transactions handled 2,481 complaints during the year with a maximum 43.89 per cent being related to non-adherence of RBI code for payment transactions.

Deputy Governor M K Jain said the year was a challenging one for the financial consumers vulnerable to the adverse consequences of the pandemic and commended the Ombudsmen offices for being functional through the difficult period.

He also said the RBI will strive to improve the disposal rate going forward.

Governor Shaktikanta Das had last week announced a plan to integrate all the three offices (banks, NBFCs, digital payments) into a single ombudsman for the country.

The share of SBI and nationalised banks in the consumer complaints decreased to 59.65 per cent as against 61.90 per cent, on the back of a surge in the share of private banks.

SBI had the largest share among lenders in the number of maintainable cases disposed at 48,333, followed by HDFC Bank at 15,004, ICICI Bank at 11,844 and Axis Bank at 10,457.

The turnaround time for complaints went up to 95 days from the 47 days in the year-ago period, and stood at 45 days for the January-June 2020 period, it said.

The Chandigarh office led when it came to maintainable complaints in 2019-20 with 30,574 concerns as against under 21,000 complaints across two ombudsmen offices in Mumbai and about 29,000 in New Delhi.