Credit Card Complaints Rise 20% in FY25
Credit card complaints have reached alarming levels in India, with a significant 20.04% increase in FY25, totaling 50,811 cases. The Reserve Bank of India (RBI) released an Annual Report revealing that private banks are largely responsible for this spike. With their aggressive push into unsecured lending and expanding card businesses, private banks logged 32,696 complaints, starkly contrasting with public sector banks that received only 3,021 complaints.
The primary driver of these complaints is the increased credit card usage by consumers. As private banks dominate the credit card market, they naturally attract more customer issues. In a competitive landscape, the volume of complaints reflects the growing pressure on these banks to maintain service quality while expanding their offerings.
Interestingly, while credit card complaints surged, other banking categories showed improvement. Complaints related to ATM and debit card transactions dropped significantly by 28.33% to 18,082 cases, indicating enhancements in digital banking reliability. Mobile and electronic banking grievances also declined by 12.74%. This suggests that banks are working to improve customer experiences in these areas.
Despite the decline in complaints about pensions and remittances, deposit account complaints rose by 7.67%. The overall picture illustrates a shifting banking landscape, where private sector banks, which hold around 40% of India’s banking assets, have become the leading source of customer grievances.
The report further highlights that private sector banks' share of complaints has increased from 34.39% in FY24 to 37.53% in FY25. This change emphasizes the rising dissatisfaction among customers as private banks expand their retail lending and digital banking operations.
In contrast, public sector banks, often seen as complaint-prone due to their large customer base, have experienced a decline in complaints from 38.32% in FY24 to 34.80% in FY25. Still, they received a substantial 1,03,117 complaints. This shift indicates that dissatisfaction is moving toward private banks as their market presence grows.
Among the total grievances received by the Ombudsman, individuals filed the majority, with 2,58,365 complaints or 87.19% of the total. Loans and advances remained the largest area of dispute, reflecting widespread lending-related issues across the banking ecosystem.
Lastly, small finance banks, despite their smaller size, saw a dramatic 42% rise in complaints year-on-year. This indicates operational challenges as they strive to reach underserved markets, amplifying the need for improved customer service across all segments of the banking industry.
