Allegations of breaches in observing fair practices and failure to meet commitments while delivering products and services to the customers against banks galore. Reserve Bank of India (RBI) in the annual publication on banking ombudsman for 2016-17, has said that complaints against banks, particularly private sector banks has showed the rising trend during the last three years. There is 30% increase in complaints against the new generation private sector banks. The increasing trend indicates that their internal grievance redressal mechanism is weak and the customers are forced to approach the banking ombudsman for redressal of their grievances.
The Banking Ombudsman Scheme, RBI’s flagship grievance redressal mechanism and is appointed by the RBI to resolve customers’ complaints regarding banking services. Currently, there are 20 banking ombudsman centres in India.
So, if you have any complaint against your bank, the first step is to contact the bank and register a complaint. Grievances such as unauthorised electronic transactions, miss-selling of insurance and mutual fund products, loan and deposit, and mobile banking transactions can be raised at your bank.
In case you are not satisfied with the bank’s response, you can file a complaint with the banking ombudsman. However, there is another option: you can take the bank to court. To file a complaint with them, you need to have proof that you have already filed the complaint with your bank. Also, you must reach out to the ombudsman within 1 year of the action taken by the bank with regard to your complaint. You don’t have to pay any charges for approaching the banking ombudsman.
Notably, last financial year it handled over 1.36 lakh complaints. According to the apex bank, 34% of the complaints received were related to failure to meet commitments and non-observance of fair practices code. Over 60% complaints were against Public sector banks.
Meanwhile, last three decades have seen a remarkable increase in size, spread and scope of activities of the banks. Their business profile has transformed dramatically as their operations have gone beyond traditional activities. In fact, integration of information technology has revolutionised the banking landscape and today’s customer carries a bank in his pocket.
Even as customers are now accustomed to ease of doing banking transactions at their finger tips and that too anywhere and anytime, anger against the banks for lapses in rendering services has been only growing. Question marks about the banks’ customer-friendly attitude continue to prevail. It’s not the state-of-the-art technology of the banks which makes a difference in the brand image of the banks. But the most important factor which determines the reputation of a bank lies in its degree of customer service. High quality customer service alone can help the banks to build their brand image.
Today we have a plethora of cases involving banks fighting its small customers that has brought the inept attitude of banks to the fore. Frankly speaking, those wealthy and well-connected customers do not have to bother; banks are always at their doorsteps. Issues related to credit and debit cards and unfair and discriminatory practices towards the borrowers keep cropping up. Besides, the most common irritant is mis-selling of investment products and services. Banks focus more on increasing their fee based income through this unethical practice of mis-selling rather than protecting the trust and confidence of their customers.
There is urgent need for banks to make necessary corrections in the system to rebuild the trust and gain confidence of the customers. Notably, ‘Indian banking in 2020’ survey conducted by Boston Consulting Group, Indian Banking Association and FCCI. the survey reveals that in the coming years, the largest consumer segment will comprise those below middle class with annual income between Rs.90,000 to Rs.200,000 per annum. These customers may need low-cost banking solutions.
Let me also share the findings of a global survey – ‘A New Era of Customer Expectation’ conducted by Ernst & Young. The survey was conducted on the background of growing wavering customer faith and confidence. It found 44 per cent of global customers are feeling put off by the banks. The confidence level of people towards the banking sector all over the world seems to be dwindling day by day.
So, the only way out of this customer attrition crisis for the banks is to rebuild customer confidence. There’s still time to shape up. The average customer may remain loyal if the services are offered with a personal touch. Banks that offer innovative and personalised customer-focussed services at efficient process will succeed in the future.
(The views are of the author and not that of the institution he works for)