Pvt banks see faster growth in complaints

Grievances against private banks rise 33%, those against foreign banks up 26%; Most grievances relate to credit cards
Our Bureau MUMBAI

ALHOUGH most complaints with the banking ombudsman are against public sector banks, private and multinational banks are seeing larger growth in customer grievances on an incremental basis. Data published by the Reserve Bank of India (RBI) indicates that majority of complaints were related to credit cards.
According to data released by RBI, complaints against nationalised banks have risen by 4%, last year. State Bank, whose technology upgradation last year caused some changeover problems, saw its complaints rise by 12%. However, the share of private and foreign banks in customer complaints has been growing much faster than their share of overall business. For instance, complaints received against private and foreign banks in 2006-07 rose by 33% and 26%, respectively, compared with complaints received a year ago.
Nationalised banks, followed by the State Bank group, received bulk of customer complaints in 2006-07, while co-operative banks accounted only for 1% of the total number of complaints received. According to data released by the central bank in the annual report on the banking ombudsman scheme, the number of complaints received during 2006-07 has risen by 22% to 38,638 from 31,732 in 2005-06. Public sector banks attracted 10,543 complaints, comprising 33% of the total number of complaints received while the SBI group got 11,117 complaints, which formed 29% of the pie.
However, even as nationalised players and the SBI group have a larger share in the total number of complaints, on an incremental basis, private and multinational banks have seen the number of complaints against them rise sharply from levels seen in 2005-06.
Data published by the central bank states that complaints relating to credit cards formed the major share of complaints, accounting for 20% of the complaints. These included complaints regarding non-issue of cards, receiving unsolicited cards, delayed account statements, excessive charges, unauthorised debits. According to the report, customers have also voiced protests on loans having been sanctioned against credit cards, based on telephonic conversations without any written consent of the cardholder.
Customers have also faced problems in cancelling cards, settlement of insurance claims, misreporting of credit history, cards being frozen without intimation and harassment from recovery officers. Apart from credit cards, customers also registered complaints related to deposit accounts, remittances, loans and advances and agents. Mumbai and New Delhi together accounted for more than 10,000 complaints received. These cities were followed by smaller towns such as Kanpur, Jaipur, Hyderabad, Bhopal, Bangalore and Ahmedabad.
Coming to disposal of complaints, the ombudsman offices disposed off 37,661 complaints, which also included complaints which were pending from the previous year. However, there were 15,914 complaints which were considered ineligible, due to reasons such as falling beyond the purview of the scheme, crossing the time limit, lack of sufficient causes, being frivolous. Towards the close of the annual report, the central bank has also highlighted instances of important cases dealt by the ombudsman offices.