Mumbai: The number of customers who have registered complaints of unsatisfactory service with the Reserve Bank of India (RBI) has fallen in the year that ended 31 March after a sharp rise in the preceding fiscal.

The number of complaints that reached the banking ombudsman in 2010-11 stood at 66,927, down from 75,927 in 2009-10, when it rose sharply from 66,823 in the year before, according to central bank data.

To be sure, experts say the numbers may not depict the real status as only a small portion of the customers approach the RBI-appointed bank ombudsman with complaints. Also, nearly 90% of the complaints are from metro cities, they said.

Photo: Bloomberg

Complaints on loans and card products of commercial banks fell to 4,293 and 16,871 in 2010-11, respectively, from 6,156 and 18,533 the previous year, while those on recovery agents and pensions rose to 1,706 and 5,810, from 1,554 and 4,709, respectively. The number of complaints per branch, which is a more accurate gauge when comparing different banks due to their varying business size, too, has shown a decline during the year, with private and foreign banks faring better than state-run banks. On average, it declined to 0.9 complaint per branch from 1.1 in 2009-10.

One should not read too much into these numbers, an RBI official said, requesting anonymity. “A reduction in numbers does not mean banks have improved their quality of service. These numbers are only those that have come up to the ombudsman, which is not much because 90% of complaints still come from the metros," he said. “There is a need for more awareness of the scheme."

The official also said that instead of looking at the absolute number of complaints, a better measure would be to look at complaints per branch or ratio of complaints to total business.

“There are some foreign banks, which have very few branches, and so even if the total number of complaints from them is small, it must be higher than public sector banks if the per-branch ratio is considered," he said. “Public sector banks have many branches, so it is not fair to blame them for a rise in absolute numbers."

Among the larger banks, complaints from ICICI Bank Ltd customers came down to 6,895 during the year from 10,328 the previous year. ICICI’s complaints per branch have fallen sharply from 6.08 per branch to 2.7.

A.K. Kargutkar, a credit counsellor at the Bank of India-supported credit counselling centre, said banks going slow on loans could also be a reason for the dip in the number of complaints.

Some state-run banks, however, have seen a rise in their number of complaints per branch, especially those related to pensions, ATMs, debit cards and recovery agents. For instance, Kolkata-based United Bank of India saw the number of complaints per branch rise to 0.3 in 2010-11 from 0.2 a year before.

Bankers, however, say the number of complaints tends to be higher in the public sector as these banks deal with more customers and relatively larger businesses compared with smaller rivals in the private and foreign sectors.

K.R. Kamath, chairman and managing director of Punjab National Bank (PNB), said state-run banks have been encouraging customers to come forward to approach the ombudsman, which could have resulted in a rise in the number of complaints.

During the year, the number of complaints per branch for PNB showed a marginal rise to 0.61 from 0.59.

Complaints received by the ombudsman from the customers of private lenders declined to 17,122 from 22,553 in the previous year, and that of foreign lenders to 7,081 from 11,450.

Complaints per branch for HDFC Bank Ltd fell to 2.9 from 4.4, while Axis Bank Ltd saw a drop to 1.6 complaints per branch from 2.12, RBI data showed.

Among foreign banks, Standard Chartered Bank customers posted the most complaints at 2,144 against 2,263 last year.