Banks Have Learnt to Sell. They Still Haven’t Learnt to Listen

The Reserve Bank of India’s latest criticism of banks over customer complaints should make the industry uncomfortable. It isn’t about paperwork or missed procedures. It is about an attitude that has crept into banking over the years – customers matter when they are opening accounts, taking loans or buying investment products, but become an inconvenience when they have a complaint.

The RBI has flagged that banks are not referring eligible cases to their Internal Ombudsman. That may sound like a technical lapse, but it defeats the very purpose of creating an independent layer of scrutiny within banks. If complaints are being blocked before they reach the Internal Ombudsman, the system exists only on paper.Anyone who has dealt with a bank after an unauthorised transaction, a mistaken charge or a loan servicing issue knows how exhausting the process can be.

Endless calls, automated replies, repeated requests to submit the same documents and promises of a response “within a few working days” have become all too familiar. By the time a customer gets a satisfactory answer, many simply give up.The contrast is striking. Miss a credit card payment or an EMI by even a day and the bank’s systems swing into action.

Penalties are levied, reminders are sent and recovery teams follow up with remarkable efficiency. But when the bank is at fault, that urgency disappears.Banks often blame rising complaint volumes on digital banking. That argument no longer holds. If technology has made it easier to acquire customers and cut costs, it should also make grievance redressal faster and more transparent.

Instead, technology has too often become another wall between the customer and a real decision-maker.This is no longer just a customer service issue. It is a governance issue. A bank that ignores complaints is also ignoring warning signals about weaknesses in its own processes. Today’s unresolved grievance can become tomorrow’s regulatory action or reputational crisis.The RBI has done well to call out the problem publicly. But warnings alone are unlikely to change behaviour.

Banks should be made to disclose, in a simple and comparable format, how many complaints they receive, how long they take to resolve them and how many end up before the RBI Ombudsman. Customers deserve to know which banks take them seriously.Indian banks aspire to be global institutions. That ambition will ring hollow if they continue to treat customer complaints as an administrative burden instead of a responsibility.Trust is the business banks are really in. Every ignored complaint chips away at it.