Awareness about banking ombudsman scheme yet to catch up in rural areas

Awareness of the Banking Ombudsman Scheme is yet to catch up in rural and semi-urban areas, according to the latest annual report of the Banking Ombudsman Scheme .

This is underscored by the fact that 71 per cent of the total complaints received by the 15 Offices of the Banking Ombudsman (OBO) during 2013-14 were from the metro and urban areas.

The annual report of the Banking Ombudsman Scheme said continued thrust on consumer awareness would help in improving the position in the future.

During 2013-14 there was an 8.55 per cent increase in the number of complaints received at 76,573 (70,541 in the previous year).

With 11,045 complaints, the New Delhi OBO topped the list in terms of the number of complaints received. OBOs in four metro centres — New Delhi, Chennai, Kolkata, Mumbai — and one non-metro centre, Kanpur, put together accounted for 56 per cent of the total complaints received.

Public sector banks accounted for 64 per cent of the total complaints received, with State Bank of India & its associates and other nationalised banks receiving complaints in equal proportion. Private sector banks accounted for 22 per cent, whereas foreign banks received 6.5 per cent of the total complaints.

Complaints pertaining to the failure to meet commitments, non-observance of the fair practices code, and the Banking Codes Standards Board of India taken together constituted the largest category of complaints with 26.6 per cent of the complaints received.

“A large number of complaints in this category indicates the lack of awareness about these codes amongst bank staff as also the customers.

“It also reveals the lack of the bank’s commitment to adhere to agreed terms and conditions. There is a need for banks to devote special attention to this aspect and provide appropriate training to their front level staff regarding these codes,” the report said.

Card-related complaints comprised 24.1 per cent of the total complaints and formed the second largest category of complaints. There was a marginal decline of 0.9 per cent in card-related complaints over the previous year.

Broadly, the reasons for these card-related complaints were issue of unsolicited cards, sale of unsolicited insurance policies and recovery of premium, charging of annual fees in spite of being offered a 'free' card, authorisation of loans over phone, wrong billing, non-settlement of insurance claims after the demise of the card holder, exorbitant charges, wrong debits to account, and non-dispensation/ short dispensation of cash from ATM.

Pension-related complaints, which stood at 8.5 per cent of the total complaints received, recorded a marginal increase of 0.5 per cent over the last year. Complaints on ‘loans and advances’ accounted for 7.4 per cent of the total complaints received during the year.

Complaints received pertaining to the category of ‘levy of charges without prior notice’ accounted for 5.9 per cent of complaints received. These were mainly regarding charges for non-maintenance of minimum balance, processing fees, pre-payment penalties in loan accounts, and cheque collection charges.

Complaints in the category of ‘Deposit Accounts’ constituted 5.3 per cent of complaints received. 

Delays in credit, non-credit of proceeds to parties’ accounts, non-payment of deposit or non-observance of the Reserve Bank directives were the major reasons for complaints in the deposit accounts category.

The objective of the BO Scheme is to provide a cost-free avenue to common bank customers for resolution of their complaints on deficiency in banking services.