Surge in Banking Complaints: RBI Ombudsman Scheme Reports 68% Increase

The Reserve Bank’s Ombudsman Schemes have seen a substantial surge in complaints, skyrocketing by over 68% during the fiscal year 2022-23, reaching a staggering 7.03 lakh, according to a recent report.

The grievances cover various banking services, from mobile and electronic banking to loans, ATM/debit cards, credit cards, pension payments, and more. This surge is credited to increased public awareness efforts and a more straightforward process for lodging complaints under the Reserve Bank Integrated Ombudsman Scheme (RB-IOS), introduced in 2021.

The Annual Report of the Ombudsman Scheme 2022-23, the first standalone report under RB-IOS, 2021, sheds light on the activities of the 22 Offices of the RBI Ombudsman (ORBIOs), Centralized Receipt and Processing Centre (CRPC), and the Contact Centre throughout the year.

Complaints against banks dominated, making up the largest portion with 1,96,635 complaints, representing 83.78% of the total received by ORBIOs. Out of the 7,03,544 complaints, ORBIOs handled 2,34,690, while 4,68,854 were resolved at the CRPC.

Mobile/electronic banking complaints were the leading contributor to the total number of complaints against both banks and non-bank payment system participants. Meanwhile, complaints related to non-adherence to fair practices code topped the grievances against Non-Banking Financial Companies (NBFCs).

Geographically, Chandigarh, NCT of Delhi, Haryana, Rajasthan, and Gujarat were identified as the top five contributors to Ombudsman complaints, while Mizoram, Nagaland, Meghalaya, Manipur, and Arunachal Pradesh had the lowest contributions during the fiscal year 2022-23.

The report also highlights the efficiency of the Ombudsman process, noting a significant improvement in the average turnaround time (TAT) of 33 days during 2022-23, compared to 44 days in the previous fiscal year. A majority (57.48%) of complaints were resolved through mutual settlement, conciliation, or mediation, showcasing an encouraging trend in complaint resolution.