Banks and NBFCs Face Record Number of Complaints in FY24

Mumbai: Consumers have come out stronger against banks and NBFCs, with complaints against these institutions representing a staggering 82.28 per cent of total grievances, according to the Reserve Bank's Integrated Ombudsman Scheme annual report.

Data shows that consumer complaints related to loans and advances made up 29 percent of the total 2.9 lakh complaints received by the ombudsman in FY24, with this segment experiencing a massive 43% increase over previous years. The overall number of complaints rose 33 per cent during the year.

Complaints linked to deposit accounts surged sharply by 34.5%, reaching an unprecedented high of 46,358 cases, while those related to mobile and internet banking accounted for 19.8 percent of total grievances.

On the other hand, the adoption of UPI saw a remarkable 15 per cent drop in complaints related to ATMs and debit cards, dwindling to 25,231 cases. The majority of these complaints were directed against services provided by banks, while NBFCs accounted for only slightly less than 15% of total grievances.

The digital revolution played out in the complaints filed, with an astonishing 88.8 per cent lodged through official channels such as CMS portal, email, and CPGRAMS - up from 85.6 per cent in previous years.

Complaint categories like loans and advances, mobile and electronic banking, deposit accounts, credit cards, and ATMs/debit cards made up a combined 87.2 per cent of total complaints, with all except ATM and debit card grievances showing an upward trend.

In dealing with these grievances, 67.8 percent were disposed off by the ombudsman while 40.8 percentage was rejected due to lack of service deficiencies. The appellate authority received only 82 appeals where 72 came from complainants, leading to the system's capacity being extensively tested during this year.

Moreover, an overall drop in handling costs to Rs 1,732 down from Rs 2,041 per complaint suggests efforts have been made at a corporate and administrative management level to cut down these rates. Overall, the latest growth reflects on the progress of the bank- ombudsman scheme which is critical when dealing with consumers' complaints.

(This report has been rewritten in the style of a news article.)