New Delhi, Oct. 2 -- The Reserve Bank of India's direction to banks to examine the root causes of recurring customer complaints points to a weakness that has become increasingly difficult to overlook. Indian banking has undergone a remarkable technological transformation: payments are instantaneous, accounts can be opened digitally, loans are approved through apps and transactions completed around the clock. Yet when something goes wrong, customers can still find themselves navigating automated responses, repeated escalations and complaints that are technically "resolved" without the underlying problem disappearing. More than 1.33 million complaints were received under the RBI's ombudsman scheme in FY2025, up 13.55 per cent from the previous year. The volume itself should compel banks to look beyond individual cases and ask why the same categories of grievances keep returning.
The RBI is therefore right to emphasise root-cause analysis. A complaint should not merely be treated as an isolated transaction between an unhappy customer and a grievance officer. When hundreds or thousands of customers encounter similar difficulties, the complaint becomes valuable evidence of a systemic weakness. It could point to a poorly designed digital process, inadequate communication, an operational deficiency, inappropriate charges, failures in customer verification or gaps between branches and centralised systems. Closing the individual ticket without correcting that weakness merely ensures that another customer will encounter the same problem. Banks need systems that can aggregate complaints, identify patterns and place recurring failures before senior management. Customer service should be treated as an important source of operational intelligence rather than an administrative obligation.
There is another concern. RBI Deputy Governor Swaminathan J has noted that a significant proportion of complaints eventually decided in favour of customers at the RBI ombudsman level had not first been referred to banks' internal ombudsmen. That weakens a mechanism specifically designed to ensure independent internal scrutiny before dissatisfied customers are forced to seek external intervention. Banks must therefore examine whether classification errors, process deficiencies or institutional incentives are allowing complaints to bypass meaningful review. Accountability should also move beyond simplistic measures such as the number of complaints "closed". Banks should measure how quickly problems are genuinely resolved, how frequently customers reopen complaints, how many decisions are reversed at higher levels and whether corrective action reduces recurrence.
India's banking system increasingly depends on digital interfaces, automated decisions and enormous transaction volumes. That makes effective grievance redressal more important, not less. Technology can help banks detect patterns across millions of complaints, but technology cannot substitute for responsibility. Staff need better training, internal ombudsmen need genuine independence, boards need visibility into recurring grievances and senior executives must be accountable when known deficiencies remain uncorrected. A modern banking system cannot measure efficiency only by transaction speed or app performance. Its credibility is also determined by what happens when the system fails. The real test of grievance redressal is not how quickly a complaint disappears from a dashboard, but whether the problem that caused it disappears too.
Published by HT Digital Content Services with permission from Millennium Post.