The banking ombudsmen received most of the grievances against credit cards in the financial year 2007-08. According to the RBI annual report ombudsman schemes, credit cards related complaints took a top position in the complaint register.

The grievances comprised of the issuance of unsolicited credit cards and unsolicited insurance policy, recovery of premium charges and annual fees for cards offered for free, issuance of loans over phone, wrong billing and settlement offers conveyed telephonically and non-settlement of insurance claims after the demise of the card holder. Also most of the complaints were against the problems faced by the customers in accessing credit card issuers and poor response from the call centers.

Further RBI informed that credit card companies often held technical snags responsible for their wrong billing and accounting. Also the promises made by direct selling agents while selling the product were never fulfilled by the card issuer.

The complaints against individual banks during this period from April 2007 to March 2008 are increased to 47,887 as compared to 38,638 complaints received for the previous fiscal. This figure amounted to a 24% growth from last year. Most of the complaints were against private and foreign banks, reported the apex regulator.

Metropolitan areas contributed to 45% of the total complaints while contribution from the urban areas was 23%. Complaints from rural and semi-urban areas accounted for 18% and 14% respectively. "There is, however, evidence of increase in the receipt of complaints from rural and semi-urban areas too, indicating the increased awareness in these areas (through various measures), reported RBI.

The second category of complaints with the banking ombudsmen were grievances related to failure on commitments. The complaints revealed that the banks did not deal with their customers in a transparent manner. Therefore this area requires focus to ensure that customers are clear about each and every transaction with their bank. Rationality in pricing of the product by the banks and dealing with default situations are other areas which require added focus, as complaints on these areas continue to pile up with the ombudsmen, the report said.

The Banking Ombudsman Scheme was introduced by the RBI in 1995 to provide a quick and low-cost forum to bank customers for resolving their banking grievances.