RBI reports 44% increase in customer complaints against banks

According to the Reserve Bank of India (RBI) report in 2008-09 there has been increase in the customer complaints related to banking services. The increase is by 44%, mainly related to credit card services and failure in meeting commitments. As per RBI data there has been large number of complaints against State Bank of India (SBI), ICICI Bank Ltd and the local unit of HSBC Holdings Plc.

As per the annual study – Report on Trend Progress of Banking in India, 2008-09 by the end of financial year 31st March the banking ombudsmen received 69,117 complaints as against 47,887 a year earlier.

In India around 70% or more of India’s banking needs are catered by public sector banks, thus complaints against public sector banks rose by 33,141 from 25,694 during 2007-08.

While 21,982 complaints were filed against private sector banks and against foreign banks there were around 11,700 complaints.

Amongst the public sector banks the highest numbers of complaints were registered against the SBI group accounting to 18,167. Out of this, 15,306 complaints registered were against the country’s largest lender, SBI only from which 4,295 related to credit cards, followed by 2,631 over failed commitments.

A year ago there has been increase in the complaints related to credit card which rose from 10,107 a year ago to 17,603.

ICICI Bank is the largest credit card issuer in India with a base of 8.5 million cards, around 3,560 credit card-related complaints were registered against it and 1,914 complaints were filed for failure in meeting commitments made.

The highest number of complaints around 2,838, were filed against HSBC Bank among the foreign banks. Out of this 1,418 complaints were related to credit cards.

“The credit card-related complaints could be associated with the customer being wrongly charged for a transaction not done by her. There could be disputes over certain charges levied by the bank,” informed the anonymous credit card head of a private sector bank, as the bank is in its silent period prior to the announcement of its second quarter results.

The report stated against the public sector banks there is large number of complaints related to pension payments, and in case of private sector banks the complaints were mainly related to the direct-selling agents.

An anonymous RBI official who is not the official spokesperson for the central bank told, “In case of pensioners, the common error made by bankers is when they are doing the dearness allowance computation”.

The report stated, the “banking ombudsman offices at New Delhi, Chennai and Mumbai together accounted for 44.1% of the total complaints received during 2008-09 compared with 36.3% during the previous year”.

The “banking ombudsman offices at New Delhi, Chennai and Mumbai together accounted for 44.1% of the total complaints received during 2008-09 compared with 36.3% during the previous year”, the report said.