Opinion | It seems that Indian banks don’t mis-sell, just 654 people complained
Unless banks are penalized heavily for mis-selling, there is no incentive to behave better
Banks don’t mis-sell financial products in India. That is the conclusion we can draw from the annual report of the Banking Ombudsman (BO) for the year July 2017 to June 2018, where a tiny 0.4% of the total complaints made to the Ombudsman were related to mis-selling. This means that 654 banking customers in India complained that they were mis-sold by their bank. Overall too, very few Indians have a complaint about their banks—of the 700 million plus Indians with bank accounts, just 0.02% complained at all. Remove the inactive and dormant accounts, but still the percentage of people complaining at all is under 1%. But did you know that India was probably the only country where there were no complaints against mis-selling before 2017-18. The Banking Ombudsman only entertains complaints that it has defined in the categories or grounds of complaints; so if there is no category, there is no complaint. In an inter-regulator meeting in 2016, Reserve Bank of India (RBI) officials proudly said that banks did not mis-sell—see no complaints. If you don’t admit such complaints, it does not mean there are none. The attitude of not wanting to find the problem defines the RBI and the BO approach to consumer complaints in general and mis-selling in particular.