Surge in Banking Complaints Under Ombudsman Scheme

January 27, 2025

The Reserve Bank of India (RBI) reported rise in customer complaints under its Integrated Ombudsman Scheme for the fiscal year ending March 2024. The total complaints surged by 32.81 per cent, reaching 934,355. This increase indicates a decline in customer service standards across the banking sector. The rise in complaints marks the need for immediate improvements in service delivery.

Background of the Ombudsman Scheme

The Integrated Ombudsman Scheme was launched on November 12, 2021.
It aims to provide a streamlined process for addressing customer grievances related to banks, non-banking financial companies (NBFCs), payment system participants, and credit information companies.

Overview of Complaints

The Ombudsman Scheme received complaints from various banking segments.
The most notable was in loans and advances, with 85,281 complaints, marking a 42.70 per cent increase from the previous year. Mobile and electronic banking complaints reached 57,242, a 32.61 per cent rise.
Complaints related to deposit accounts and credit cards also increased .

Geographic Distribution of Complaints

Chandigarh, NCT of Delhi, Rajasthan, Gujarat, and Uttarakhand were the top contributors to complaints per lakh accounts.
In contrast, Mizoram, Nagaland, Ladakh, Manipur, and Lakshadweep had the lowest complaint rates.
This geographical disparity raises questions about banking service quality across different regions.

Nature of Complaints

Many complaints revolved around unfair banking practices. Customers reported issues such as interest being charged from the date of loan sanction rather than disbursement. Other complaints included unauthorized charges, fraudulent activities, and disputes with merchants. Customers also expressed dissatisfaction with credit card rewards and promotional benefits.

Complaint Resolution Statistics

The RBI Ombudsman disposed of 284,355 complaints during the year, achieving a disposal rate of 95.10 per cent.
Of these, 67.83 per cent were maintainable complaints.
A number of cases were resolved through mutual settlement, conciliation, or mediation. However, 40.78 per cent were rejected due to no service deficiency.

Increase in Centralised Receipt and Processing Centre Complaints

The Centralised Receipt and Processing Centre (CRPC) experienced a substantial increase in complaints, receiving 766,957, a 30.10 per cent rise.
The majority of these were closed as non-maintainable complaints.
A portion of complaints were addressed to the RBI without prior lodging with the concerned entity.

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