Private sector banks, which now command roughly 40 per cent of India’s banking assets, have emerged as the biggest source for customer grievances — both in overall volume and particularly in the fast-growing credit card segment, according to findings of the Annual Report of the Ombudsman Scheme 2024-25 released by the Reserve Bank of India (RBI).
From a total of 2,96,321 complaints received by the banking system in FY25, up 0.82 per cent year-on-year, those against private sector banks saw a sharp rise from 34.39 per cent in FY24 to 37.53 per cent in FY25, amounting to 1,11,199 grievances. The rise underscores the growing pressure points in private banks’ customer-facing operations, especially as they expand aggressively in retail lending and digital banking.
In contrast, public sector banks, long perceived as complaint-heavy because of their large customer base, saw a notable decline. Their share of complaints dropped from 38.32 per cent in FY24 to 34.80 per cent in FY25, though the absolute number still stood at a sizeable 1,03,117 cases, as per the report. The shift indicates that the burden of dissatisfaction is gradually tilting toward the private sector as its market share and product footprint increases.
Credit cards continued to be a major flashpoint. Complaints in this category rose by 20.04 per cent to 50,811 cases, making it the second-largest contributor to grievances, according to the report. Private banks dominated this segment overwhelmingly, reflecting their aggressive push in unsecured lending and rapid expansion of card portfolios. Private banks accounted for the bulk of complaints at 32,696 in the case of credit cards, far outpacing the 3,021 complaints directed at public sector banks, the Ombudsman report said.
In contrast with the rise in credit card-related issues, complaints linked to mobile and electronic banking saw a meaningful improvement. They fell 12.74 per cent compared to last year. The numbers suggest that while digital platforms are becoming more stable, the sheer scale of digital usage at private banks continues to generate friction.
Of the total grievances received by the Ombudsman in FY25, individuals accounted for the overwhelming majority, filing 2,58,365 complaints or 87.19 per cent of the total, according to the report.
Loans and advances remained the single largest area of dispute, drawing 86,670 complaints during the year, reflecting the widespread nature of lending-related issues across the banking ecosystem.
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Small finance banks, though smaller in scale, recorded the most dramatic surge. Complaints against them jumped 42 per cent year-on-year, signalling operational strains as these banks broaden their reach in underserved markets.
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