Mumbai, Feb. 22
A public sector bank was recently advised by the Reserve Bank of India to recalculate the interest rate on all housing loans according to the terms of the agreements entered into with the borrowers even though the borrowers had not applied for relief.
In another case, the central bank told a public sector bank to reverse the amount that was debited from a customer's savings bank account as insurance premium for group insurance scheme, without the customer's consent. These are instances of `Class Action' initiated by the RBI for the benefit of bank customers. These are general directions issued by the regulator in cases that could benefit not only the applicant, but all those customers facing similar problems, even though they have not lodged formal complaints. The Annual Report of Banking Ombudsman Scheme 2008-09, released on Monday, said, "The Reserve Bank of India has proactively started issuing general directions to all banks so as to protect the customers against banks' act of commissions and omissions." The report also said that the RBI takes action even on the basis of news published by newspapers or other media. COMPLAINTS RISE According to the report, the Banking Ombudsmen received 69,117 complaints during 2008-09, as against 47,887 in 2007-08, up 44 per cent. Grievances relating to credit cards were the highest and comprised 26 per cent of the total complaints. They increased by 74 per cent to 17,648 in 2008-09 from 10,129 in 2007-08. "The types of complaints pertaining to credit cards continue to be those related to issuance of unsolicited credit cards and unsolicited insurance policies and recovery of premium charges, charging of annual fee in spite of being offered as `free' cards and issuance of loans over phone, disputes over wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, abusive calls, excessive charges, etc. A general source of these complaints continues to be the difficulty in accessing the credit card issuers and the poor response from the call centres. This, in sum, is the issue of non-transparency and mis-selling,'' the report said. Among other complaints were those relating to deposits, remittances, maintenance of average quarterly balance, loans and advances, pension, direct selling and recovery agents and charges (processing, renewal or preclosure ) being levied without due notice to the customers. Complaints against public sector banks increased by 29 per cent to 33,141 in 2008-09 from 25,385 in 2007-08. Complaints against private sector banks were up 58 per cent to 21,982 from 14,077 and against foreign banks by 91 per cent to 11,700 from 6,126.