Complaints against banks rise one-third; most on credit cards

Complaints against banks rise one-third; most on credit cards

Mumbai: Customer complaints about banking services increased by nearly one-third in the 12 months to 30 June, with a majority related to credit card services, the Reserve Bank of India (RBI) said in a report.

The annual study, entitled Report on Trend and Progress of Banking in India, 2007-08, said the number of complaints registered with the banking ombudsman for the year ending 30 June was 45,772, up from 34,499 a year earlier. The data excludes regional rural banks and primary cooperative banks.

Complaints against public sector banks, which meet 70% of India’s banking needs, were highest at 25,694, or 56.13% of the total. Private banks accounted for 30.48% of the complaints, and foreign banks, 13.39%.

The State Bank of India group faced the most complaints—13,531, or 52.66% of the complaints against public sector banks. State Bank of India alone accounted for 10,867 complaints, with 3,047 related to credit cards.

Credit card-related complaints rose to 10,107 from 7,669 in the earlier period, with private and foreign banks accounting for 61% of related grievances. Foreign banks had 3,087 credit card-related complaints, against 3,084 for private banks.

RBI noted the outstanding amount under credit card receivables had grown by almost 50% in the year to 31 March due to an increase in their use. Credit card receivables rose to Rs27,437 in March from Rs18,317 a year ago.

“The maximum complaints were received in respect of credit cards across all bank groups, barring nationalized and old private sector banks. This was followed by complaints relating to failure on commitments made, deposit accounts, remittances and loans and advances (general)," RBI said. A significant number of complaints on public sector banks were also related to pensions, and on private banks to direct selling agents, it added.

Most grievances were received at New Delhi, where customers lodged 6,742 complaints in the 12 months ending 30 June, against 5,481 in the previous year.

“The number of complaints received in Chennai, Guwahati, Bhubaneswar, Kolkata and Ahmedabad also increased sharply during 2007-08," the report said.

Mumbai customers complained 6,070 times against last year’s 5,525.