Complaints to banking ombudsman rose by nearly 20 per cent to over 1.96 lakh during 2018-19, with non-adherence to fair practices accounting for the highest number of cases, RBI data released Tuesday showed. Non-observance of fair practices code accounted for a maximum number of complaints, the Reserve Bank of India (RBI) said in the Annual Report of Ombudsman Schemes for 2018-19.


The complaints received at Offices of Banking Ombudsman (OBOs) rose by 32,311, taking the total to 1,95,901 complaints in 2018-19 over the previous year (1,63,590), recording a year-on-year increase of 19.75 per cent, the Reserve Bank said.


Even as complaints related to unfair practices topped the list, the percentage share came down to 19.17 per cent in 2018-19 from 22.10 per cent a year ago.


Complaints on ATM and debit card issues increased from 15.08 per cent in 2017-18 to 18.65 per cent in 2018-19; while those related to pension, levy of charges without notice, credit card related issues and remittance declined during the year, the RBI said.


The number of complaints pertaining to mis-selling have gone up from 579 complaints in 2017-18 to 1,115 in 2018-19, an increase of 92.57 per cent.


"The average cost of handling a complaint came down from Rs 3,504 in 2017-18 to Rs 3,145 in 2018-19," it said.


The disposal rate for 2018-19 was 94.03 per cent as against 96.46 per cent in 2017-18. The reduction in disposal rate is largely due to rise in volume of complaints with resource remaining the same, the central bank said.


The RBI said that during the year, the number of complaints resolved by agreement like through intervention of OBOs, mediation and conciliation among others rose 70.40 per cent from 65.82 per cent a year earlier.


Number of awards and appeals issued by banking ombudsmen stood at 98 and 78, respectively, as compared to 133 and 125, respectively a year earlier.


With relation to NBFC-O scheme which came to effect on February 23, 2018, as many 3,991 complaints were received, as against 675 in four months operation during 2017-18.


The scheme is administered from offices of the NBFC-Os in four metro centres Chennai, Kolkata, Mumbai and New Delhi for handling complaints from the respective zones, so as to cover the entire country.


Non-adherence to fair practices code constituted 40.44 per cent of complaints received, followed by non-observance of RBI directions (17.21 per cent), levy of charges without notice (12.63 per cent) and lack of transparency in contract / loan agreement (9.17 per cent).


The disposal rate of NBFC-Os stood at 95.41 per cent in 2017-18 and 99.10 per cent in 2018-19. The RBI said one appeal has been received against the decision of NBFC-O during 2018-19, as compared to nil in the previous year.


Among the important developments during the year, RBI said that the Ombudsman Scheme for Digital Transactions was introduced on January 31, 2019 and the NBFC-O scheme was extended with effect from April 26, 2019 to cover the regulated non-deposit taking NBFCs having asset size of Rs 100 crore and above.


On the way forward for strengthening consumer protection, RBI said that during the ongoing fiscal, it would conduct a review of IO Scheme for extension to NBFCs.


It will also review the Consumer Education and Protection Cells (CEPCs) for empowering them on the lines of OBOs; review the Ombudsman Schemes for updation and effective implementation including through convergence and formulate policy to strengthen the system based on Root Cause Analysis of major areas of complaint.


The RBI said it will also introduce Interactive Voice Response System (IVRS) in CMS for online support to the customers.


Awareness generation about the grievance redressal mechanisms of the RBI and the Ombudsman Schemes as also campaigns on safe digital banking and the regulatory stipulations on customer protection would be continued, RBI said.