RBI To Make Banks Pay For High Number Of Customer Complaints

The Reserve Bank of India (RBI) said on Friday that it will impose monetary disincentives on banks when substantially failing to address consumer grievances. The disincentive will be in the form of recovery of the cost of redress of complaints by the Ombudsman, from the concerned bank.

In 2018-19, the average cost of handling a complaint by the banking ombudsman offices was Rs 3,145.

The RBI's Statement on Developmental and Regulatory Policies issued on Friday said that the disincentive will be imposed when maintainable complaints are comparatively high. The new framework to improve internal grievance redressal mechanism of banks will become operative from January 2021.

"With a view to strengthen and improve the efficacy of the internal grievance redress mechanism of the banks and to provide better customer service, it has been decided to put in place a comprehensive framework comprising inter alia of enhanced disclosures on customer complaints by the banks, a monetary disincentive in the form of recovery of cost of redress of complaints from banks when maintainable complaints are comparatively high, and undertaking intensive review of grievance redress mechanism and supervisory action against banks that fail to improve their redress mechanism in a time bound manner. The framework would be put in place during January 2021," the statement said.