68% spike in complaints against banks, mobile banking biggest concern

The Reserve Bank of India (RBI) has reported a spike of 68.2% in complaints under its Integrated Ombudsman Scheme (RB-IOS) for the financial year 2023, with figures reaching a staggering 703,000. This leap marks a substantial rise compared to the previous years, where FY22 saw a 9.4% increase and FY21 witnessed a 15.7% hike in complaints.

Factors behind the surge

The central bank attributes this sharp increase to its vigorous public awareness initiatives and a streamlined process for lodging complaints, making it easier for the public to voice their concerns and grievances.

Nature of complaints

Complaints related to Mobile/Electronic Banking dominated the total number of grievances against banks and non-bank payment system participants. In contrast, non-adherence to the Fair Practices Code topped the list of complaints against NBFCs. A significant portion (57.48%) of maintainable complaints was resolved through mutual settlement, conciliation, or mediation. The remaining complaints were either rejected, withdrawn by the complainants, or adjudicated by passing awards.

Which states had the most number of complaints?

Chandigarh, Delhi, Haryana, Rajasthan, and Gujarat emerged as the top contributors to ombudsman complaints. In contrast, Mizoram, Nagaland, Meghalaya, Manipur, and Arunachal Pradesh reported the lowest number of grievances.

The report highlighted an uptick in complaints from urban, semi-urban, and rural areas, showcasing a broad demographic engagement with the ombudsman scheme.

Banks were the primary focus of grievances, with complaints against them forming 83.78% of the total complaints received by the ORBIOs.

What were the common complaints?

The report detailed several common categories of complaints, including unauthorized/fraudulent digital transactions, delay in transaction reversals, lack of clear communication regarding loan terms, issues with pension resolutions, non-maintenance of minimum balance charges, cross-selling/mis-selling of products, delay in reporting credit information, and non-compliance by recovery agents with regulatory guidelines.

Complaints handling and resolution

Out of the total complaints received, 234,000 were managed by the ombudsman office, while the Centralised Receipt and Processing Centre (CRPC) disposed of 468,000 complaints. The CRPC plays a crucial role in the initial scrutiny and processing of complaints received through physical mode, further enhancing the efficiency of the complaint management system.