Sunday, 23 Mar, 2025
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Mobile and e-banking complaints made up 22.48% of all grievances with the RBI ombudsman in 2023-24, highlighting challenges in India’s growing digital banking sector. Complaints about loans and deposit accounts also increased, driven by swift digital adoption.
Customer complaints under the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021 jumped 32.81 per cent in 2023-24, several reports mentioned, citing the RBI’s latest report. The surge includes grievances lodged with both the RBI ombudsman and the Centralised Receipt and Processing Centre. The national average of complaints per 100,000 accounts spiked from 2.85 in March 2022 to 8.9 in March 2024.
However, resolution efficiency declined—the ombudsman’s complaint disposal rate fell from 97.99 per cent in 2022-23 to 95.1 per cent in 2023-24, even though only two-thirds of the cases were deemed maintainable. The data signals increasing pressure on the grievance redressal system, highlighting the need for stronger consumer protection and improved banking services.
The primary source of discontent comes from mobile and electronic banking, which accounted for nearly 20 per cent of complaints in 2023-24—a staggering 32.61 per cent rise from the previous year. Issues related to deposit accounts and credit cards also saw significant upticks, with deposit-related complaints climbing 34.45 per cent and credit card complaints rising 23.95 per cent. This shift highlights the rising concerns around digital transactions, account management, and credit card services. For banks, these trends indicate an urgent need to bolster transparency, improve cybersecurity, and ramp up customer service efficiency.
According to the RBI report, Chandigarh, NCT of Delhi, Rajasthan, Gujarat, and Uttarakhand were the top five contributors to complaints per lakh accounts at the Ombudsman Offices (ORBIOs) in FY 2023-24. These regions saw the highest volume of grievances, suggesting more prevalent banking issues or heightened awareness of the grievance redressal system. On the contrary, Mizoram, Nagaland, Ladakh, Manipur, and Lakshadweep recorded the fewest complaints, indicating either lower banking activity, fewer complaints, or potential gaps in consumer awareness in these regions. The disparity emphasises regional variations in banking service experiences and the need for tailored solutions.
The complaint conversion ratio, a measure of how well banks address customer issues, improved across most banking sectors, except for payments banks. Private sector and foreign banks saw notable improvements, with conversion ratios reaching 4.05 per cent and 6.88 per cent, respectively. Small finance banks also demonstrated progress, doubling their ratio from 1.66 per cent in 2020-21 to 3.32 per cent in 2023-24. However, payments banks lagged, experiencing a huge drop in their conversion ratio—from 13.77 per cent in 2020-21 to just 2.77 per cent in 2023-24—highlighting their ongoing struggle to handle complaints effectively.
The decline in ATM or debit card complaints, from 21.97 per cent in 2019-20 to 10.41 per cent in 2023-24, signals improvements in these services, possibly due to better technology or customer support mechanisms. Meanwhile, the modest rise in credit card complaints reflects persistent issues, likely related to fees, disputes, or service quality. Complaints about other financial products and services like pensions and remittances saw a dramatic drop from 47.18 per cent to 11.76 per cent, indicating either more effective service delivery or less reliance on these products. These shifts in complaint patterns illustrate how customer concerns are evolving with improvements in some areas and ongoing challenges in others.
The surge in complaints against non-banking financial companies (NBFCs) underscores increasing dissatisfaction with their lending practices and regulatory compliance. Complaints related to loans, advances, and violations of the Fair Practices Code have escalated significantly, rising from 7,052 in 2019-20 (36.29 per cent of total NBFC complaints) to 27,471 in 2023-24, which now accounts for 64.34 per cent of all complaints.
Analysts say the rising volume of complaints signals an urgent need for NBFCs to revisit their business practices and strengthen their commitment to customer-centric, compliant operations. Addressing these concerns promptly will be essential to mitigate the growing dissatisfaction and avoid further reputational damage.
