Industry Odisha Bureau, Oct 02: The RBI wants banks to trace why the same customer complaints keep returning. Root-cause analysis and stronger internal grievance systems are central to the push. Its ombudsman scheme received over 1.33 million complaints in FY25.
Closing a complaint is no longer enough for India’s banks. The Reserve Bank of India (RBI) wants them to ask why it arose. At a meeting last month, the regulator pressed banks on repeat grievances. People familiar with the matter described the discussion. The aim is prevention, not just faster closure.
Complaints as a Warning Signal
The RBI asked banks to identify systemic, process-related and operational issues behind complaints. It also sought root-cause analysis of recurring complaints. The distinction matters. Resolving a customer complaint fixes one case. Root-cause analysis asks why similar cases keep appearing.
A systemic issue reflects a broader recurring weakness. A process issue concerns how a procedure is designed to work. An operational issue concerns how it is carried out in practice. The regulator wants banks to fix gaps and reduce recurrence, an executive said. The RBI also shared major complaint categories from its ombudsman offices.
The Scale of the Problem
The numbers explain the urgency. More than 1.33 million complaints reached the RBI’s ombudsman scheme in fiscal 2025. That was 13.55% more than the previous year. Complaint volume alone does not prove wrongdoing.
A separate breakdown shows 241,601 complaints against banks in FY25. That was 81.53% of complaints against financial institutions in that dataset. Private-sector banks accounted for 34.39%. NBFCs drew 43,864 complaints, or 14.80% of that total. These figures use a different base from the 1.33 million total.
Complaints Skipping Internal Review
A deeper problem lies inside banks’ own grievance machinery. In July, deputy governor Swaminathan J flagged a gap in the internal ombudsman framework. A significant share of customer-favourable RBI Ombudsman outcomes had skipped internal ombudsmen initially. He called this a serious concern that undermined the framework’s purpose. Classification issues or process deficiencies, he said, can cause such bypassing.
Rebuilding the Complaint Pipeline
The internal ombudsman is meant to be a review layer within each bank. If a complaint is misclassified, it may never reach that layer. Swaminathan J said complaint-management systems should stop such inadvertent bypassing. He urged regulated entities to review their internal grievance redress processes. Internal ombudsmen, he said, should spot recurring issues and help implement remedies. The intended chain runs from classification to review, escalation, resolution and remediation.
Training Moves Up the Agenda
Capability is the other gap. The RBI has suggested capacity building, including industry-level training programmes. Banks will discuss a mechanism internally, one executive said. Each bank board, the executive added, will formulate its own strategy under RBI directives. That pushes grievance handling beyond the frontline and up to the boardroom.
One Nation One Ombudsman
The push coincides with a new framework. The Reserve Bank – Integrated Ombudsman Scheme, 2026 (RB-IOS, 2026) took effect in July 2026. It introduced jurisdiction-neutral complaint handling under a “One Nation One Ombudsman” approach. In simple terms, a complaint’s location matters less in how it is handled.
From Resolution to Prevention
The RBI’s message is about systems, not punishment. A repeat complaint often signals a weak process somewhere. Banks that fix gaps at the source may see fewer grievances return. The test now is whether they learn from complaints, not just close them.
