As bank staff prepare for next strike, will they also look at rising customer complaints?

Even as the bank employee unions continue to threaten to strike work to press their demands ranging from higher wages to reduced working hours, customer complaints due to unsatisfactory services in banks continue to be on the rise. One-third of the customer complaints received by the banking ombudsman in 2013-14 were against state-run banks, followed by private banks and foreign banks, according to the annual report of the Reserve Bank of India (RBI) banking Ombudsman scheme. State Bank of India (SBI) and the its subsidiaries, along with other nationalised banks received 32 percent of the customer complaints, while private banks received 22 percent, while 6.5 percent of the complaints foreign banks, the report showed. Complaints pertaining to failure to meet commitment and non-observance of fair practices code, among others, constituted largest category of complaints (26.6 percent of complaints received). As much as 24.1 percent of the complaints were card-related, the report said. [caption id=“attachment_2095401” align=“alignleft” width=“380”] Reuters[/caption] Also, non-adherence to prescribed working hours, refusal to accept, or delay in accepting, payments towards taxes, refusal to issue /delay in issuing or failure to service, or delay in servicing or redemption of government securities, refusal to close or delay in closing of accounts too resulted in higher consumer complaints. The RBI introduced the banking ombudsman scheme in 1995 to provide a forum to customers for resolution of their complaints relating to deficiency in banking services. Of the total complaints received during the year, banking ombudsmen disposed of 96 percent, the RBI said. Meanwhile, bank employee unions have yet again threatened to strike work from 25 to 28 of this month after earlier discussions with Indian Banks’ Association (IBA), the industry lobby of banks, collapsed on a range of issues, mainly on wage revision. In a meeting earlier this month, the IBA had improved their offer of wage revision from 12.5 percent to 13 percent even as the trade unions continue to press for 19.5 percent hike. Even at 12.5 percent, the burden of wage increase on PSU banks is an estimated Rs 4,000 crore, according to the IBA officials. The figure will rise to almost Rs 8,000 crore if arrears of pension and other perks are included. The IBA has said that banks won’t be able to offer wage revision beyond 13 percent since banks’ balance sheets are in poor shape. Banks employees have also demanded a reduction in work hours in public sector banks to five days a week, but the finance ministry is understood to have turned down the proposal already. The critical point here is that service standards in state-run banks, which control 70 percent of the industry, have continued to deteriorate and are lagging behind private and foreign banks over the years, prompting many customers to shift to private and foreign banks. In the changing industry scenario, when the banking industry is set to witness high competition from a new set of differentiated banks, backed by strong business houses with deep pockets and advantage of technology, state-run banks would do well focussing on improving their service standards to clients. Otherwise they risk losing their market share. Unions have somewhat lost steam in the recent years with the newly joined young officers and employees showing no active interest union activities, even though most of them religiously contribute to the monthly subscription fees. Unions still manage to mobilise mass support from employees to carry out strike and bring banking services to a standstill. Trade unions, while they are fully within their rights to demand higher wages, can simultaneously play a constructive role to sensitise their members on the need to pay attention to the customer, especially in the changing face of competition. At the end of the day, if there is no customer, there is no bank and, for sure, no unions.