Complaints against banks rose 44% in fiscal 2009

Complaints against banks rose 44% in fiscal 2009

Mumbai: Customer complaints against banks spiked by 44% in the financial year ended 31 March 2009, according to Reserve Bank of India (RBI) data released on Monday. Complaints from rural areas alone jumped by 65%.

The increase in customer dissatisfaction has prompted banking regulator RBI to issue general directions to all banks to “protect customers against banks’ act of commissions and omissions".

The surge in complaints comes even as banks increase their technology use to improve services and expand their presence in rural areas to promote inclusive financing.

Ironically, both these measures contributed to the growth in customer dissatisfaction.

Complaints relating to credit and automated teller machine cards were most common, accounting for 25.5% of the complaints. They jumped 74% over the previous year.

The report, released in Mumbai by RBI governor D. Subbarao, said increased penetration of banking, growing awareness and higher expectations of customers in rural areas were the main reasons for the larger number of complaints.

According to the report prepared by RBI’s customer services department, complaints against banks grew to 69,117 in fiscal 2009, up against 47,887 in fiscal 2008.

The biggest chunk of complaints came from metropolitan areas, where 29,662 consumers accounted for 43% of the complainants.

Foreign banks were the worst offenders, with complaints against them increasing 91% to reach 11,700. Domestic public sector and private sector banks saw complaints growing by 29% and 58%, respectively.

Public sector banks, including State Bank of India group—which accounts for 70% of the country’s banking needs—saw complaints rising to 33,141 in fiscal 2009, against 25,565 in the previous fiscal. Private sector banks accounted for 21,982 complaints, against 14,077 a year ago.

Complaints relating to failure on commitments made jumped 85%, and at 17%, accounted for the second largest reason for complaints.