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Last Updated : Dec 20, 2017 10:06 AM IST | Source: Moneycontrol.com

What's the cost of a banking complaint? Nearly Rs 4,000, says RBI

Average cost of handling a complaint was Rs 3,780 during 2016-17 which was lower than the average cost of Rs 4,396 during 2015-16 on account of increase in complaints.

Beena Parmar @BeenaParmar

Bank consumer complaints at the central bank’s Banking Ombudsman increased 27.4 percent to 1.3 lakh, with the highest coming from New Delhi and Mumbai, said the Reserve Bank of India’s annual report of the Banking Ombudsman Scheme (BOS).

In the total 20 offices of Banking Ombudsman (OBO) of RBI in the country, “In 2016-17, the OBOs handled 136,511 complaints (5,524 from the previous year) of which 92 percent were disposed within the year. The complaints received by OBOs increased by 27 percent in 2016-17 as compared to a rise of 21 percent in the previous year.”

Costs of a complaint

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The banking ombudsman takes care of customer grievances, petty and big, such as non-acceptance of small denomination currency, forced closure of deposit without notice or without any proper reason and non-adherence to the instructions of RBI-related to ATM/debit/credit card operations.

The average cost of handling a complaint was Rs 3,780 during 2016-17 which was lower than the average cost of Rs 4,396 during 2015-16 on account of increase in complaints.

The aggregate cost of running the Banking Ombudsman Scheme (BOS) has increased from Rs 45.2 crore in FY16 to Rs 49.5 crore in FY17. The volume of complaints increased by 27.30 percent during this period, thereby reducing the average cost of handling a complaint to Rs 3,780.

The RBI has borne the expenditure incurred on running the ombudsman scheme from 2006. This includes revenue expenditure and capital expenditure incurred on administration of the BOS. The revenue expenditure includes establishment items like salary and allowances of the staff attached to OBOs and non-establishment items such as rent, taxes, insurance, law charges, postage and telegram charges, printing and stationery expenses, publicity expenses, depreciation and other miscellaneous items. The capital expenditure items include furniture, electrical installations, computers/related equipment, telecommunication equipment and motor vehicle.

Eastern zone received the highest number of complaints at 33 percent, majority from Kolkata at 61.6 percent, followed by Western zone at 32.4 percent majority from Ahmedabad at 61.65 percent, northern zone at 30 percent (Jaipur at 44.5 percent) and southern zone at 13.8 percent (Bengaluru at 37.5 percent).

The highest complaints came from New Delhi (18.9 percent) followed by Mumbai (12.4 percent) and Ahmedabad (7.3 percent).

Rural population group witnessed the highest rise at 40.5 percent in reporting of complaints.

During the year, the 20 OBOs received 130,987 number of complaints, which increased 244 percent from 38,000 in the year 2006-07. In 2015-16, the volume of complaints stood at 102,894.

ATM and Card complaints

ATM/Credit and Debit card complaints together represented 18.9 percent (only Debit cards at 12.5 percent) of complaints. Pension-payment related complaints accounted for 6.5 percent of total complaints while the remaining categories including loans and advance and remittance which were all below 5 percent of total complaints, the annual report said.

As high as 44 percent people complained over emails and 39 percent through Post/Fax/Courier/hand delivery.

The Banking Ombudsman Scheme is a flagship program of the Reserve Bank started in 2006, which has evolved as an important pillar of the grievance redressal mechanism available to the customers of banks.

“This rising trend, while reflecting the increasing awareness about the BOS, also underlines the need for banks to strengthen their internal grievance redressal mechanism,” RBI said.

In this context, in the recent past 34 banks, on RBI’s advice, had appointed Internal Ombudsman (IO) to ensure that all rejected or partially redressed complaints are reviewed independently before these are escalated to the BO, by the complainant.

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First Published on Dec 20, 2017 10:06 am
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