Mumbai: There has been a surge in customer complaints received by
banking ombudsmen across India relating to deposit accounts. Central
bankers feel that this is largely related to know your customer (KYC)
norms and non-transparency on the part of banks with regards to their
deposit schemes.
According to the annual report of the Banking Ombudsman Scheme for 2012 published by Reserve Bank of India (RBI), the number of complaints pertaining to deposit accounts has jumped more than five times to 8,713.
“Though no reason can be ascribed for this trend, issues related to KYC norms is one of the major components of these complaints. Further, the banks are not properly and fully disclosing the different risks associated with their liability products,” the annual report said. The surge in complaints regarding deposit accounts is significant considering that banks have embarked on a move to scale up number of accounts to achieve the government objective of one account per household scheme, which will be implemented in 2013 to enable direct transfer of benefits.
Until 2011, complaints relating to deposits accounts were only 2% of all complaints. They now account for 12% of all petitions to the ombudsman offices.
Complaints about failure of a bank to meet the fair practices code was the biggest ground for petitions made to the Ombudsmen with 18,365 complaints under this category constituting 25% of total complaints.
Out of total 14,492 complaints relating to cards, 9,348 complaints were those pertaining to ATM and debit cards. Broadly, the complaints are on account of issue of unsolicited cards, unsolicited insurance policies and recovery of premium, charging of annual fee in spite of being offered as ‘free’ cards, authorization of loans over phone, wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, excessive charges, wrong debits to account, nondispensation of money from ATM, and skimming of cards.
The banking ombudsman scheme was first introduced in 1995, it was amended twice in 2005 and again in 2009. Over the years the scheme has been changed to include issues such as internet banking and other issues that have arisen as a result of development in banking technology. The scheme is in for a major overhaul with RBI appointing a committee under the chairmanship of Suma Varma, chief general manager, customer service department, to review the scheme.
The committee was constituted after changes to the banking ombudsman scheme were recommended by various panels. The Damodaran committee on customer service in 2010 had suggested that banks have an in-house authority to adjudicate on customer complaints and that the ombudsman should be more of an appellate authority. The Rajya Sabha Committee on Subordinate Legislation in its 183rd report had also made some suggestions on the banking ombudsman scheme.
Courtesy:
Mayur Shetty TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/01/07&PageLabel=19&EntityId=Ar01903&ViewMode=HTML
According to the annual report of the Banking Ombudsman Scheme for 2012 published by Reserve Bank of India (RBI), the number of complaints pertaining to deposit accounts has jumped more than five times to 8,713.
“Though no reason can be ascribed for this trend, issues related to KYC norms is one of the major components of these complaints. Further, the banks are not properly and fully disclosing the different risks associated with their liability products,” the annual report said. The surge in complaints regarding deposit accounts is significant considering that banks have embarked on a move to scale up number of accounts to achieve the government objective of one account per household scheme, which will be implemented in 2013 to enable direct transfer of benefits.
Until 2011, complaints relating to deposits accounts were only 2% of all complaints. They now account for 12% of all petitions to the ombudsman offices.
Complaints about failure of a bank to meet the fair practices code was the biggest ground for petitions made to the Ombudsmen with 18,365 complaints under this category constituting 25% of total complaints.
Out of total 14,492 complaints relating to cards, 9,348 complaints were those pertaining to ATM and debit cards. Broadly, the complaints are on account of issue of unsolicited cards, unsolicited insurance policies and recovery of premium, charging of annual fee in spite of being offered as ‘free’ cards, authorization of loans over phone, wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, excessive charges, wrong debits to account, nondispensation of money from ATM, and skimming of cards.
The banking ombudsman scheme was first introduced in 1995, it was amended twice in 2005 and again in 2009. Over the years the scheme has been changed to include issues such as internet banking and other issues that have arisen as a result of development in banking technology. The scheme is in for a major overhaul with RBI appointing a committee under the chairmanship of Suma Varma, chief general manager, customer service department, to review the scheme.
The committee was constituted after changes to the banking ombudsman scheme were recommended by various panels. The Damodaran committee on customer service in 2010 had suggested that banks have an in-house authority to adjudicate on customer complaints and that the ombudsman should be more of an appellate authority. The Rajya Sabha Committee on Subordinate Legislation in its 183rd report had also made some suggestions on the banking ombudsman scheme.
Courtesy:
Mayur Shetty TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/01/07&PageLabel=19&EntityId=Ar01903&ViewMode=HTML
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