Reserve Bank of India Ombudsman Conference Highlights
Introduction
At the annual conference of the Reserve Bank of India (RBI) ombudsmen, Governor Sanjay Malhotra emphasized enhancing customer service within regulated entities like banks and non-banking financial companies.
Current Issues in Customer Service
- The RBI’s Integrated Ombudsman Scheme saw complaints increase by approximately 50% annually over two years ending in 2023-24.
- RBI ombudsmen processed complaints at a 25% increase, resulting in a substantial backlog.
- In 2023-24, 95 scheduled commercial banks received over 10 million customer complaints.
Recommendations for Improvement
- Senior bank officials should allocate weekly time to address customer issues.
- Improvement of systems is needed to reduce grievances effectively.
- Better grievance-redress mechanisms are crucial for efficient banking service.
Importance of Quality Customer Service
With significant digital payment adoption in India, service quality in banking and finance is vital. Governor Malhotra noted the necessity of competitive customer service for survival in the industry.
Challenges in Service Quality
- Banks face challenges in mobilizing deposits and need to enhance product and service offerings.
- Awareness of complaint processes is low among disadvantaged income groups, leading to underreported issues.
- Over 70% of complaints in 2023-24 were from urban and metropolitan areas.
Operational and Staffing Concerns
- Bank clerks in public-sector banks (PSBs) decreased by over 150,000 from 2013 to 2024.
- PSBs received the highest number of complaints, though their share has reduced.
- Private banks are increasing their workforce but must also address customer concerns more effectively.
Government's Role
- Over 40% of director-level positions in PSBs are vacant, affecting overall performance and customer service.
- The government needs to expedite necessary appointments to improve bank operations.
Conclusion
A systemic improvement is required across the banking sector to provide satisfactory services to all Indian customers, beyond just PSBs.
