RBI governor urges banks to properly categorize complaints

MUMBAI: The Reserve Bank of India (RBI) governor, Sanjay Malhotra, has criticized banks and financial institutions for misclassifying customer complaints as “requests, queries, and disputes.” He called this practice a serious violation of RBI rules. Malhotra urged banks to focus on improving customer service. He highlighted the importance of addressing complaints related to Know Your Customer (KYC) regulations, digital fraud, and misleading sales practices. He spoke at the annual conference of banking Ombudsmen about transforming how grievances are handled. The governor pointed out that mislabeling complaints has resulted in many issues remaining unresolved. He stressed that every complaint represents a chance to build customer trust. In the past year, more than one crore complaints were reported across 95 banks, a number that could increase as financial services continue to grow. Malhotra emphasized that effective complaint management is crucial for success. He noted that unresolved complaints represent lost opportunities to strengthen customer loyalty. Despite improvements in digital banking, issues like fraud and aggressive recovery practices still damage consumer confidence.