Customer service in banks worsens; 32.81% surge in customer complaints

STC NEWS DESK
JANUARY 27 (STC): Customer service standards within banking sector is declining sharply, with customer complaints against banks increasing significantly.
According to the reports, Reserve Bank’s Integrated Ombudsman Scheme saw a staggering 32.81 per cent surge in complaints from banking customers, reaching 9.34 lakh during the year ended March 2024.
These complaints were registered with 24 Offices of the RBI Ombudsman (ORBIOs) and Centralised Receipt and Processing Centre (CRPC) of the RBI.
According to the statistics, a significant number of 85,281 complaints (as much as 29.01 per cent of the total complaints) with respect to loans and advances were received under the scheme, showing an increase of 42.70 per cent when compared to the previous year, the RBI said in its Annual Report on Ombudsman Scheme.
As many as 57,242 complaints (19.48 per cent of total complaints) pertained to mobile/ electronic banking, an increase of 32.61 per cent from the previous year. While 46,358 complaints (15.77 per cent) were about opening and operating deposit accounts, showing a rise of 34.45 per cent, it got 42,329 complaints (14.40 per cent) about credit cards, which showed a rise of 23.95 per cent over the previous year, the report said.
Chandigarh, NCT of Delhi, Rajasthan, Gujarat and Uttarakhand were the top five contributors to the complaints at the ORBIOs in terms of complaints received per lakh accounts (deposit and credit), while Mizoram, Nagaland, Ladakh, Manipur and Lakshadweep were the lowest contributors during FY 2023-24, the RBI report said.
The Reserve Bank came across instances of lenders resorting to certain unfair practices in charging of interest. Some of the unfair practices were charging of interest from the date of sanction of loan or date of execution of loan agreement and not from the date of actual disbursement of the funds to the customer. Similarly, in the case of loans being disbursed by cheque, instances were observed where interest was charged from the date of the cheque whereas the cheque was handed over to the customer several days later. In the case of disbursal or repayment of loans during the course of the month, some REs were charging interest for the entire month, rather than charging interest only for the period for which the loan was outstanding.
Customers complained about inaccurate or unauthorised charges on the customer’s statement, fraudulent activity, unsolicited issue of cards and disputes with merchants. Customers also complained about not receiving credit card rewards and promotional benefits and arbitrary changes in card norms.
The RBI Ombudsman report said a total of 934,355 complaints were received at the ORBIOs and the CRPC between April 1, 2023 and March 31, 2024, showing an increase of 32.81 per cent over the previous year. The complaints received at the ORBIOs increased by 25.24 per cent from 234,690 complaints in FY2023 to 293,924 complaints in FY2024, while those received at the CRPC increased by 36.59 per cent from 468,854 in FY2023 to 640,431 in FY2024. (STC)