- Indian banking history is replete with several instances of high-profile businessmen defaulting on loans borrowed from some of the prestigious banks, which ran into thousands of crores of rupees. Any number of banking scams have been reported over the years, in which honest customers’ hard-earned money is quickly wiped out by unscrupulous elements. Despite having checks and balances in place to ensure the country’s banking system is foolproof, disallowing anti-social elements from creating havoc, scams of diverse nature with huge money involved keep surfacing, leading to questions being raised about our credentials to stymie such attempts. The custodian of the banks in India – the Reserve Bank of India – has initiated measures to counter these anomalies.
PC: The Economic Times
- Nonetheless, the RBI’s efforts are circumvented by the scamsters in connivance with the amiable and pliable banking authorities wreaking havoc on the financial lifeline of the country. As you are aware, the phrases often mentioned in banking parlance are non-performing assets (NPAs), writing-off, recovery, and mortgage just to name a few usually associated with the subject matter. However, the fact of the matter is ordinary bank customers are always at the receiving end. Thus, the recent mention made by the RBI chief batting for ordinary bank customers is most welcome. More can be done though. Note that the Indian banks are awash in money. As reported, in 2023, the banks held 103L crores – $1.2tn – in FDs alone.
PC: Fortune India
- The small customer can seem too small from their vantage. So, kudos to the RBI governor for speaking up for the little guy. Recently, the RBI governor rapped banks for poor customer service. Everybody’s had a taste of it, but data shows the full extent of the rot. Complaints received under RBI’s ombudsman scheme – not resolved by your bank, hence escalated to RBI – have grown at 50% a year for the past two years. If India’s GDP grew that fast, it would overtake the US in just over 5 years. That’s why the governor called it a highly unsatisfactory situation that needs urgent attention. He also suggested the underreporting of complaints by banks. In 2023-24, India’s scheduled commercial banks together received over 1cr complaints.
PC: Mint
Worryingly, it turns out they were window dressing data as many complaints were listed as requests, queries, and disputes which is a regulatory violation. Mind you, in simpler times, banking-related complaints were mostly about forgery and wrong entry, but complexity has broadened the gamut of problems. Bank branches misselling investment schemes and other products like life insurance is another outrage. It was reported a few years ago that bank branches rewarded staff for selling these products but not for better customer service. Nexus between banks and builders is a reality that cannot be brushed under the carpet anymore. Banks should be customer-oriented to render praiseworthy services rather than play truant towards customers.
