Customer is king

In the race to increase customers and balance sheet size, banks and NBFCs can't ignore service quality

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Reserve Bank of India (RBI) Governor Sanjay Malhotra has a good reason to worry about the quality of customer service at Indian banks. The number of complaints under the RBI's Integrated Ombudsman Scheme has increased at a compound annual growth rate of 50% over the past two years. Worse, 57% of the maintainable complaints last year required mediation or formal intervention by the RBI ombudsmen. No wonder, the governor had to remind bankers at a recent event that it's not fair to treat customer complaints as a nuisance. The number of complaints could actually be much higher because there is a large section of people who don't have the wherewithal or aren't even aware of the processes to make complaints — something that the regulator, along with the industry, needs to address urgently. In fact, one simply has to browse through social media to see the large number of complaints against leading banks. These include repeated demand for know your customer (KYC) documents, and of course, mis-selling of products. And, as the RBI governor