RBI's Receives Around 13,000 Complaints Against Banks and NBFCs With the piling grievances of financial customers, RBI receives complaints under its new scheme
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
On Monday, Bhagwat Karad, Minister of State, Ministry of Finance shared crucial information regarding the fintech players. He stated that the Reserve Bank of India had received close to 13,000 complaints against banks and NBFCs in the last 19 months.
He further shared that complaints were mostly concerning digital lending applications and harassment done by recovery agents.
"As per the RBI, during the period 1.4.2021 to 30.11.2022, 12,903 complaints have been received against banks and NBFCs pertaining to digital lending applications/apps and against recovery agents/harassment by recovery agents under the Integrated Ombudsman Scheme of the RBI," Bhagwat Karad said in a written response to the Parliament.
The Integrated Ombudsman Scheme was launched by RBI in November 2021 under which consumers could lodge complaints against banks and NBFCs with regards to their lending apps. The scheme is an integration of the three- the Banking Ombudsman Scheme, 2006, as amended up to July 01, 2017; the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and the Ombudsman Scheme for Digital Transactions, 2019.
The scheme has the right and power to pass any verdict regarding consequential losses borne by complainants up to Rs 20 lakhs and an additional Rs 1 lakh in lieu of the loss of complainant's time, mental disturbance, and expense incurred.
"Major concerns identified in the report pertain to issues of mis-selling, breach of data privacy, charging of exorbitant interest rates, intrusive method of recovery, lack of transparency, and lack of grievance redressal mechanism," the minister further added.
RBI has strived to make the borrowing and payments experience for customers a hassle-free one. In January 2021, the central bank constituted a working group on 'digital lending including lending through online platforms and mobile apps.' With input from stakeholders and the public, a regulatory framework has been set up as per the RBI's release dated August 10, 2022.
On September 2, 2022, the central bank issued guidelines for digital lending which will aim at protection of customers from painful interest rates applied by some entities and to also keep a tab on unethical loan recovery practices which were set in motion on 1st December 2022.
