The number of customer complaints against banks and other regulated entities (REs) increased by 68.24 per cent to 7,03,544 lakh in 2022-23 from 4,18,184 in the previous financial year, according to an annual report of the Reserve Bank of India (RBI) on the progress of the Integrated Ombudsman Scheme launched in 2021 to strengthen the customer grievance mechanism.

RBI implemented the Integrated Ombudsman Scheme in November 2021 to make the grievance redressal mechanism against RBI-regulated entities (REs) quicker and cost-efficient. Complaints against banks accounted for around 83.78 per cent of the total complaints received by the Office of the Reserve Bank of India Ombudsman (ORBIO). The complaints were mainly related to mobile and electronic banking, credit cards, loans, and deposit accounts.

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However, despite the increasing number of complaints, a large chunk (4,68,270 complaints) was not ‘maintainable’ under the scheme. The maintainable complaints ORBIO handled declined from 3,04,496 in 2021-22 to 2,34,690 complaints in 2022-23. The turn-around time of complaint redressal was reduced from 95 days in 2019-20 and 44 days in 2021-22 to 33 days in 2022-23.

The report said senior citizens’ complaints declined from 9,244 in 2021-22 to 5,081 in 2022-23, or from 3.04 to 2.16 per cent, respectively. RBI’s Consumer Education and Protection Department (CEPD) compiles the reasons for complaints handled by ORBIO. This data will formulate policy interventions for grievance redressal and better customer service.

The primary reasons for complaints included the following:

Fraudulent Digital Transaction: Unauthorised digital transactions due to the absence of the REs’ fraud prevention measures and accidental leak of sensitive information by customers.

Delayed Reversal: The lack of a daily reconciliation mechanism at REs has delayed the reversal of failed transactions.

Lack Of Communication: Loans and advances account for a larger portion of complaints due to unclear or lack of communication by the REs regarding interest rates, other charges, etc.

Mis-Selling: Cross-selling and mis-selling products to customers by REs due to incomplete or wrong information.

Pension Issues: Senior citizens experience delayed responses regarding pension queries due to inadequate mechanisms at the banks.

Non-Maintenance Charges: Complaints against charges due to non-maintenance of the minimum deposit in bank accounts.

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Outdated Credit Reports: Wrong credit reports due to the delay in sending updated credit information to credit information companies (CICs).

Insensitive Recovery Measures: Harsh measures adopted by REs’ recovery agents, a failure of REs to sensitise their agents to the regulatory guidelines.

What Is RBI Doing?

RBI has taken several initiatives to improve the complaints redressal mechanism, such as bringing CICs under its purview, creating a committee to review REs’ customer service standards, running awareness campaigns, opening more ORBIO offices to enhance coverage, etc.

In FY24, CEPD plans to review, consolidate and update the existing regulatory guidelines on customer service, integrate the internal ombudsman scheme for different types of REs, and start two more Reserve Bank Contact Centres at various locations. RBI also plans to explore using artificial intelligence in the Complaint Management System (CMS) for better decision-making, improved customer service, protection, and quicker grievance redressal.

What Can Customers Do?

Customers must know their rights while dealing with REs. For lodging complaints, they must first register them with the concerned RE before raising them to the next level.

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If they do not receive a response within 30 days or receive an unsatisfactory response, they can escalate the matter to the Reserve Bank Ombudsman. The report observed that increased digital awareness and a simplified process resulted in a higher number of complaints lodged.

The complaint can be filed physically, through mail, or online via the CPGRAM portal. If in doubt, they can call the toll-free number 14448 for help lodging a complaint, tracking status, etc.