SBI gets most complaints: Banking Ombudsman

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CHENNAI: State Bank of India(SBI), saw the largest number of complaints among banks in India registered against it, according to data released by the Banking Ombudsman. Of the 1.06 lakh total complaints in the banking industry in 2015-16,SBI saw 29% complaints registered against it for levy of charges, pension delays and ATM, debit card frauds.

India’s largest lender by assets, SBI’s share of total complaints is higher than that of all private banks put together – which stood at 26%. Of total complaints, foreign banks accounts for 3% of complaints and regional rural banks (RRBs) and scheduled urban co-operative banks accounted for 2% of complaints received.

Total complaints received also increased by 21% to 1.06 lakh from 88,438 in 2014-15. The number of ATM & PoS, debit card and credit card fraud surged year-on-year (y-o-y). ATM, debit card fraud complaints increased by 23% year-over-year to 13,081 complaints. Of the total 21,821 card related complaints, a majority (8,259) complaints were regarding failed ATM withdrawal transactions involving short dispensation/non-dispensation of cash, including alleged fraudulent withdrawals from ATMs.

Credit card complaints increased by 17% y-o-y to 8,740. “The main causes for credit card complaints were issue of unsolicited cards, sale of unsolicited insurance policies and recovery of premium along with card charges, charging of annual fees in spite of being offered as ‘free’ card, authorization of loans over phone, wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, exorbitant charges, inappropriate practices by recovery agents, wrong reporting of credit information by banks toCredit Information Companies etc,” said the report.

But the highest number of complaints were due to non-observation of the banking code. As many as 34,928 complaints were filed because of unfair banking practises, a 40% increase year-over-year. “We receive many complaints from customers. There are many instances like undue levying of ATM charges, hidden deposit charges, safe vault charges,” said A C Mahajan, chairman, Banking Codes and Standard Board of India (BCSBI).

“We insist that banks must first inform the customer of any charge beforehand. For instance, the charge for stop cheque payment can vary from bank to bank. Some banks charge Rs 50 other banks charge as much as Rs 200. If a customer is unfairly charged, then the banking ombudsman takes cognisance of that,” he said.

Another important aspect, BCSBI, says that with heightened customer awareness banks can longer disclaim liability in the event of a cyber attack or phishing attempt. “In the event of a data breach like the recent 32 lakh data breach, banks are supposed to compensate the customer 100%,” Mahajan said

“Long before the RBI came up with its draft guidelines in October, a large number of banks had agreed to comply with our code. In the event of a data breach, cloning of debit cards, the customer cannot be held responsible,” he said. As per the banking ombudsman data, another bone of contention between banks and customers is when it comes to loans and pensions.