Bank ATM Alert! Credit card, debit card warning! You will be shocked

Complaints made to the Banking Ombudsman, such as cheating and poor service, have seen a massive rise in the last ten years. Most of the grievances relate to issues with ATMs and card transactions. The Reserve Bank of India data, accessed via query under Right to Information Act by DNA Money, reveals that complaints against banking services soared 134% during the last decade. RBI has 21 offices of the specialised grievance body across the country.

Digitisation was supposed to bring more transparency, security and ease of transactions, but the number of complaints against the poor quality of services lodged in a day went up from 132 on an average in 2008 to 309 per day as on March 31, 2018.

A major rise in the complaints was seen after the financial turmoil of 2008 and the demonetisation of 2016.

In 2008-09, the number of complaints received by the ombudsman rose 44% from a year ago. Similarly, in 2016-17, complaints surged over 22%.

During 2009-10, the banking ombudsman received 79,266 complaints as against 69,117 in the previous year, up 15%.

Most of the grievances were related to ATM, credit and debit card issues, followed by failure to meet commitments. However, ATM-related complaints were gradually replaced by failure to meet commitments.

RBI ombudsman report shows that about 18-24% of the complaints are related to ATM in the last ten years.

Last week, State Bank of India reduced the daily withdrawal limit from Rs 40,000 to Rs 20, 000 for on certain cards to curb frauds. The new withdrawal limit will be applicable from October 31.

After a complaint is made to an ombudsman, the banks and the ombudsman decide whether it is valid or not. If the complaint is found to be valid, then the ombudsman starts redressal or award.

The rate of the award is low. Most of the complaints are either rejected or withdrawn. Almost half of 'maintainable' or valid complaints are rejected. In 2007-08, around 40% of complaints were dismissed, followed by 66% in 2008-09 and 32% in 2009-10. In the last three years, more than half of maintainable complaints have been rejected.

The award level in the last ten years is at just around 1% of the valid or maintainable complaints. U S Bhargava, former general manager, Punjab National Bank, told DNA Money, "Partly, the problem could be because of huge retirements at all levels during the past few years in the industry and newly recruited people are not having enough exposure/experience."

The data of annual reports of the banking Ombudsman Schemes of the past ten years, analysed by DNA Money, reveals that the Ombudsman has given 0.4% to 1% reward of total maintainable complaints. For instance, in 2016-2017, Ombudsman Scheme, released by RBI in December 2017, shows the award was given in 31 cases or 0.05% of total maintainable complaints. Out of the total 1,30,987 complaints, 62,539 were found as maintainable at that time.

K C Chakrabarty, former deputy governor and appellate authority of RBI, said, "The speed, cost, convenience and efficiency of banking services have not improved by factors that technology enables one to achieve. A part of the problem is that banks are yet trying out fledgeling delivery models rather than putting in place a cost-effective, decentralised and realistic delivery model. Fixing a problem/glitch when it happens thus becomes the weakest link in providing efficient customer service. A large number of complaints to the Banking Ombudsman relates to this area."

The Reserve Bank of India notified banking Ombudsman Scheme on June 14, 1995. The scheme is administered and funded by the central bank and applies to scheduled commercial banks, scheduled primary urban co-operative banks and the regional rural banks.

Recently, RBI has tightened the rule of the Ombudsman Scheme and asked the banks to appoint an independent internal ombudsman to review customer complaints that are either partly or entirely rejected by the banks.

Watch this Zee Business video here:

...& ANALYSIS
The number of complaints against the poor quality of services lodged in a day went up from 132 on an average in 2008 to 309 per day as on March 31, 2018

A major rise in the complaints was seen after the financial turmoil of 2008 and the demonetisation of 2016. In 2008-09, it rose 44% from a year ago. Similarly, in 2016-17, there was over 22% surge

Most of the complaints are either rejected or withdrawn. The award level in the last ten years is at just around 1% of the valid or maintainable complaints.