banking ombudsman

RBI has released its annual report on the Banking Ombudsman Scheme for commercial banks, NBFCs & digital banking. Some of the statistics are staggering to say the least.

  1. The volume of complaints received under all the three Ombudsman Schemes increased by 22.27 percent on an annualized basis and stood at 3,03,107 during the reported period.
  2. The BOS (the scheduled commercial banks) accounted for 90.13 percent of total complaints (i.e. 2,73,204) received under the three Ombudsman Schemes. The number of complaints received under OSNBFC and OSDT stood at 8.89 percent and 0.98 percent respectively, of the total number of complaints. I guess OSDT (digital banking) will start growing exponentially in the future.
  3. The major areas of complaints under the BOS pertained to (a) ATM/debit cards; (b) mobile/electronic banking; and (c) credit cards, which collectively accounted for 42.74 percent of the total number of complaints as compared to 44.65 percent in the previous year. Under the OSNBFC, major areas of complaints were (a) non-adherence to Fair Practices Code; (b) non-observance to RBI directions; and (c) levy of charges without prior notice, accounting for 75.32 percent of the complaints as compared to 63.23 percent in the previous year.
  4. The overall disposal rate improved to 96.59 percent from 92.52 percent in the previous year, despite higher volume of complaints, which can be attributed to the end-to-end digitization of complaint processing in CMS. (i will not go much by the disposal rate, because typically banks give a gross unsatisfactory reply and close the complaint at their end, they have not checked whether the compliant has actually been redressed or the customer is fully satisfied with the redressal. For banks, merely sending replies is tantamount to closure, which is not right)
  5. Of the maintainable complaints, 72.67 percent were resolved by mutual agreement i.e. through intervention of the Ombudsman offices / conciliation / mediation efforts.
  6. Lot of issues never get addressed at all, for eg. bank charges on return of cheques is too exorbitant, Why should we pay the charges, when it is not our fault at all, there should be some other mechanism for this, banks should not collect charges from the customers who have deposited cheques payable to them. If the cheque is returned due to any reason, it is not the customer’s fault, it is that of the drawer of the cheque. He should be penalised. Many a times, cheques are returned because the KYC is not done at the drawer’s end. Seriously this is another bug bear and a major irritant, why should clients keep doing KYC time and again. I keep getting notification from banks and other intermediaries reminding me to do the KYC again and again.
  7. Second irritant is that nowadays with Core banking concept, one can deposit the cheques at any branch, not necessarily at the home branch. So what happens is that the customers deposit cheques in our favour in our bank branch nearest to their office, and when that gets cleared, the bank statement gives only the cheque no. & name of the drawer bank. The name of the drawer is never mentioned anywhere. With the result we are unable to know who has deposited that cheque into my account. This is something so basic. Why is that not being done. It will help us in knowing who has deposited the cheque in our favour in some other branch of our bank.

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