The Banking Ombudsman received over 1.6 lakh complaints in the fiscal year 2017-18, but nearly half were non-maintainable on the grounds specified under Clause 8 and Clause 9. Non-maintainable complaints — at 48.9 per cent of total complaints received in FY18 — was lower than the previous year’s 52.3 per cent. The decline, the RBI said, can be attributed to increased awareness among consumers. Put another way, the share of maintainable complaints rose by 3.4 per cent in FY18. But even within the 83,532 maintainable complaints, a staggering 28,259 or 34 per cent, were rejected by the Ombudsman in FY18. The upshot though is that the number of rejected maintainable complaints reduced significantly from 64 per cent in FY16.
These complaints were rejected on various reasons: not on grounds of complaint or not in accordance with provisions of Clause 9 (3), requiring elaborate documentary and oral evidence under Clause 13, or complaints without sufficient cause, or not pursued by the complainant, or because there was no loss, damage, or inconvenience to the complainant.
It may be noted that the maximum number of rejections were on the grounds that ‘elaborate documentary and oral evidence’ was required for closure of such cases. “Keeping in view the high number of such rejections, this ground was made appealable with effect from July 1, 2017. The total number of appeals increased eight-fold from 15 in 2016-17 to 125 in 2017-18, of which, 98 appeals pertained to closure under the said Clause,” the Ombudsman said in its latest annual report. However, the 98 appeals account for only 4.2 per cent of 2,337 complaints closed under Clause 13 (d) of the Scheme.
Meanwhile, total complaints increased by 25 per cent, of which 64 per cent were received electronically i.e. through the online portal or by emails. Although the Ombudsman handled 28 per cent more complaints in FY18, the disposal rate was 96.5 per cent as against 92 per cent a year before. There was also a marked increase in the number of complaints resolved by agreement i.e. through mediation, which rose from 42.43 per cent in FY17 to 65 per cent in FY18.
The major grounds of complaints received include non-observance of the fair practices code (22.1 per cent), ATM and debit card issues (15.1), credit card complaints (7.7), failure to meet commitments (6.8), and mobile and electronic banking (5.2). On the other hand, of the total complaints received, problems relating to pension, levy of charges without notice, loans and advances, remittances and mis-selling each accounted for 5 per cent or less. The average cost of handling a complaint reduced from Rs 3,626 in FY17 to Rs 3,504 in FY18 due to increase in efficiency in the process and economies of scale.
An ombudsman for NBFCs is now a reality
The RBI last week extended the coverage of Ombudsman Scheme for Non-Banking Financial Companies (NBFCs) 2018 to eligible non-deposit taking NBFCs with asset size of over Rs 100 crore. The NBFC-Infrastructure Finance Company, Core Investment Company, Infrastructure Debt NBFC and an NBFC under liquidation are excluded from the ambit of the scheme. Such a scheme is essential to promote conducive credit culture and to regulate the credit system and provides a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the scheme. Here’s a cheat sheet on the scheme:
