Loan-related complaints went up by 43 per cent in 2024, according to the Reserve Bank of India (RBI). During the same time, the overall complaints received by the Ombudsman rose 33 per cent to 2.9 lakh complaints in 2024. In all, there were 25,281 complaints related to loans and advances, which made up 29 per cent of the total.
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Common Loan-Related Complaints
Borrowers often raise concerns about late fees charged by lenders for missed or delayed equated monthly installments (EMI) payments and sometimes cite deficiencies in services provided by the lender. To avoid such issues, borrowers should ensure that their bank accounts have sufficient funds when EMIs are due, ensuring seamless payments. Regularly maintaining timely EMI payments not only avoids late fees but also helps in building a strong credit history, significantly reducing disputes.
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One needs to remember that according to RBI a bank can impose penal charges on late payments, but it cannot charge penal interest on late payments. Borrowers should carefully understand the terms and conditions when taking a loan.
Steps Borrowers Can Take
“To address disputes, borrowers should first communicate directly with their lender by phone or email, explaining the issue and requesting extensions or fee waivers in cases of genuine delays,” says Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Transparent communication is key to resolving most disputes amicably and fostering a cooperative relationship with the lender. If they feel they have been charged extra by mistake they should inform the lender and launch a complaint.
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When To Approach The Ombudsman
Initially, borrowers should reach out to the lender’s customer care department via phone or email, ensuring they maintain written records of their communication. “If the issue remains unresolved after a reasonable time, they should escalate the complaint to the lender’s grievance redressal cell. If there is still no resolution, borrowers can escalate the matter to the RBI Ombudsman as a recourse,” says Raoul.
Rights Of Borrowers
Borrowers have the right to escalate unresolved issues through the lender’s grievance redressal system, file a complaint with the RBI Ombudsman, and, if necessary, approach consumer courts for redress. These steps ensure that borrowers’ concerns are addressed transparently and fairly, with appropriate legal recourse if required.
