Credit cards emerged as a major source of customer complaints in FY2025, with grievances in this segment rising far more than in other areas of banking, according to the Annual Report of the Ombudsman Scheme 2024-25 released by the Reserve Bank of India (RBI).
Overall credit card complaints surged by 20.04 per cent to 50,811 cases during the year. Private sector banks dominated this space by a wide margin, driven by their strong push into unsecured lending and the rapid expansion of their card businesses. They recorded 32,696 complaints — far higher than the 3,021 complaints received against public sector banks, the report said.
One of the key reasons behind the growing pile of grievances is the fact that private banks are far more active in the credit card market, leaving PSU banks with a relatively small share. With more cards in circulation and heavier usage, private banks naturally attract a larger number of customer issues.
Interestingly, even as credit card complaints climbed, other categories showed encouraging improvement. Complaints related to ATM and debit card transactions fell sharply by 28.33 per cent to 18,082 cases in FY25. Issues tied to mobile and electronic banking declined by 12.74 per cent year-on-year. These trends indicate that digital systems are becoming more reliable, although the sheer volume of digital transactions handled by private banks continues to create pressure points.
Pension-related complaints fell by 33.81 per cent to 2,719, those of remittances & collection of instruments declined by 9.73 per cent and para banking by 24.16 per cent. However, complaints on deposit accounts rose by 7.67 per cent and loans & advances by 1.63 per cent, according to the report.
Overall, the numbers reflect a broader shift in the banking landscape. Private sector banks — now holding around 40 per cent of India’s banking assets — have emerged as the largest source of customer grievances.
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.
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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.
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.
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.
