Private Banks Continue to Face Credit Card Woes, While Public Sector Banks Grapple with Mobile Banking Issues

New Delhi, March 28 (IANS) – According to Elara Securities, public sector banks receive the highest number of complaints for mobile banking, while private banks face issues related to credit cards. Customer complaints have risen by 68 per cent year on year, with 6.69 complaints per 100,000 accounts.

The majority of complaints are concentrated in Chandigarh, Delhi, Haryana, Rajasthan, and Gujarat, which are three times higher than the national average. Complaints from rural and semi-urban areas are also on the rise, accounting for over 30 per cent of overall complaints, as stated by Elara Securities.

Among all complaints, more than 85 per cent are directed towards banks, with public sector banks making up 43 per cent of complaints in FY23, down from 51 per cent in FY22. Private banks account for 32 per cent of overall complaints, while small finance banks (SFB) make up 4 per cent.

Non-Banking Financial Companies (NBFC) saw a significant increase in complaints, rising from 7 per cent in FY22 to 14 per cent in FY23, primarily due to non-adherence to the Fair Practice Code. Credit cards are the primary source of complaints for private banks, loans and advances for SFBs, and mobile banking for public sector banks (PSB).

Elara Securities pointed out that customer complaints have led to regulatory actions by the Reserve Bank of India (RBI). The central bank has initiated the Utkarsh 2.0 strategy framework for 2023-25 to review and update regulatory guidelines on customer service. A committee has been formed to examine these issues and implement recommendations.

“While it is difficult to ascertain actions with certainty, these datapoints do indicate directions and highlight key monitorables especially when seen in backdrop of recent RBI regulatory actions,” said Elara Securities.