The Hindu Business Line : Surge in complaints with Banking Ombudsman

The number of complaints received at the Banking Ombudsman offices has seen a sudden surge. It has risen from 9,723 for the eight months ended December 2005 to 22,009 between January and June 2006.

The Reserve Bank of India has attributed this surge in complaint flow to the revision effected to the Banking Ombudsman Scheme 2002 on January 1, 2006, by including credit card-related issues, levying of excessive charges without prior notice, facilitation of online complaint filing besides others, under the ambit of the 2006 Scheme. These coupled with the unprecedented increase in the retail loan segment has seen complaints flood the ombudsman offices, numbering 15 across the country.

However, complaints involving frauds and forgeries have specifically been kept outside the ambit of the Banking Ombudsman Scheme, 2006.

According to details furnished by the RBI, the number of complaints peaked in January 2006 to 4,831. It slipped to 4,006 and 3,902 the following two months before dropping to 2,501 in April. Thereafter, it started rising to 3,367 and 3,402 in May and June respectively.

Of the total complaints received under the 2006 Scheme, the Ombudsman offices have disposed off 10,675, rejected 7,238 complaints and carried forward the balance 6,170 to July 2006. The number of dealing officers varied between 2 and 11 and the average number of complaints dealt by an officer was around 400 last year. (The RBI is initiating efforts to replace the staff in the Ombudsman offices with its own officers.)

An analysis revealed that the maximum number of complaints dealt with during the last five years pertained to deposit accounts, deficiency in servicing loans and advances and delay in collection of cheques/bills etc, besides miscellaneous complaints.

A majority of complaints pertained to the nationalised banks followed by the State Bank Group accounting for more than 70 per cent of the complaints received.

PSBs: Complaints fall

However, for 2005-06, the percentage of complaints against public sector banks, including the SBI Group, showed a decline vis-À-vis those of private and foreign banks, indicating that these banks had many complaints falling under the new grounds of complaints added in the BO Scheme, 2006.

Nationalised banks top the list in the bank group-wise break-up of complaints (from 2001-02 to 2005-06) at 26,064, followed by the SBI Group at 20,056, private sector banks at 11,289, foreign banks at 4,547, scheduled primary co-operative banks at 787, RRBs at 1,418 and others at 4,247.

A look into the review of Banking Ombudman’s Awards and unimplemented awards show that during 2005-06, 17 review applications had been received, of which banks were advised to implement the award in 12 cases and 5 remanded to BO for review.

The report further revealed that there were around 90 unimplemented awards at the start of the year. The RBI has taken exception to this by taking up the matter directly with the CEOs of the banks concerned. The periodical follow up resulted in a steep decline in the number of outstanding cases to 40. Thirty of these are presumably in a court of law and 10 under review, awaiting fresh review of the earlier award.

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