RBI Ombudsman grievance data shows high retail discontent: Remedial measures, please

Soon after assuming office at the Reserve Bank of India (RBI) almost a year ago, Governor Sanjay Malhotra had flagged the central bank’s growing concern over the banking sector’s disregard for customer service, especially the scant resources that banks earmark for timely redressal of grievances.The 2024-25 annual report of the Integrated Ombudsman Scheme (IOS), a framework designed for complaint handling, offers details and analysis of the sector’s receipt and resolution of complaints. It shows the scale of the problem that needs to be tackled.

At a broad level, the IOS platform received 1,334,244 complaints during 2024-25, a rise of more than 13.5% over 2023-24. How lightly the banking industry appears to take customer service is reflected by the fact that over 87% of them came from individual customers.Significantly, most related to loans and advances, with disgruntlement over credit cards coming second and both categories making up over 46% of all gripes.

Rising discontent, with many grievances left unaddressed, reveals a weakness that must not be allowed to persist. The sector’s retail services account for most of last fiscal year’s grievances.

Retail customers are far more numerous in general, but rapid expansion in this segment over the past few years has had an effect on complaint data sliced by the nature of bank ownership. Private sector banks notched up the highest number, accounting for over 37.5% of the grouses.This turns on its head the popular perception that public sector banks (PSBs) lead the field in customer apathy and deficient service standards.