Banks shying from giving away education loans

Chennai:

Banks are denying education loans and more than 50 per cent of complaints regarding loans and advances pertain to it, according to Reserve Bank of India’s Office of the Banking Ombudsman (OBO) in Chennai.

Adressing reporters here on Friday while tabling the annual report, RBI’s deputy general manager Suman Nath and banking ombudsman S Ganesh said that their office received 18 per cent of the 6,877 complaints relating to loan and advances and among those more than 50 per cent pertain to denial of education loans.

It is only after the intervention of the OBO that banks started processing the loans, said Suman Nath. The report also highlighted that the highest number of complaints pertain to ATM/debit and credit cards accounting for 24 per cent.

Interestingly, OBO has disposed 6,458 complaints of the 6,877 handled and only 419 are pending. Surprisingly, 63.5 per cent of the complaints were against public sector banks followed by private banks and foreign banks, said Ganesh.

The officials also disclosed that the bank has passed three orders in three different cases against the banks. One pertains to unauthorized online transaction where the bank failed to alert the customer. “There were 48 online transactions but the bank did not alert the customer. We issued the order and the bank appealed. It was later rejected by the deputy governor and the bank had to comply with our award,” Suman said.

The second case pertains to fraudulent online transfer where the bank did not follow ‘know your customer’ (KYC) norms by not establishing the identity of the person opening the account. The third award was given in a case where an old fixed deposit was not settled.