The Reserve Bank of India (RBI) affirm though the new private sector banks and foreign banks are getting affluent customers but there are more customer complaints than old private- and public-sector banks.
The number of customer complaints per 1000, the new private sector banks and foreign banks account to be higher at 0.61 and 0.33 in comparison to the old private- and public sector banks at 0.05 and 0.07 excluding credit cards.
Usha Thorat, deputy governor, RBI stated, "New generation private sector banks and foreign banks have got a share of affluent and high net worth individuals (HNIs). These are higher negative moments of truth for them."
Thorat said that the complaints are related to delays in clearing of outstation cheques, high charges, and entries not being properly recorded. In case of home loan borrowers the majority of complaints are related to a lack of transparency of interest rates.
Thorat stated, "When you have a floating interest rate, and the customer signs a document, he does not know the benchmark rate and the spread over the benchmark rate. When it is a fixed rate loan, the customer does not know whether or not the bank has a right to refix the rate after 2-3 years."
The deputy governor stressed banks should make sure while selling their products to the customers, they are given complete and proper information about the product so that the customer knows what he is getting into.
To prevent over-leveraging of customers banks need to take on responsibility of providing good and efficient banking services and lending facilities along with credit counseling and educating customers.
"There is a consciousness among banks. We are sensitizing banks. Look at your agents that they are trained properly. There should be responsible banking and customer education. Customer is also responsible,” said Thorat.
Credit card segment have the highest number of complaints with one out of every five customer complaint is related to a credit card.
If we see the ratio of complaints regarding credit card issuing the old age private – and public sector banks respectively per 1000 credit cards issued. Where as the new private banks and foreign banks have a lower complaint ratio at 0.20 and 0.26 respectively.
Thorat stated, "These banks have issued many more credit cards so the ratio is lower. There is a lot of variation among public sector banks."