(a) whether RBI has received complaints stating that no reasons for rejecting the application
for a credit card and also for refusing a loan to a customer have been communicated by the banks
in writing to the complainants; and
(b) if so, the details thereof and the action taken against those banks who do not follow the
directions in this regard?
FINANCE MINISTER (SHRI P. CHIDAMBARAM)
(a) & (b): A statement is laid on the Table of the House.
STATEMENT FOR LOK SABHA STARRED QUESTION NO.182 FOR 24TH AUGUST, 2007 REGARDING REJECTION OF
CREDIT CARD TABLED BY SHRI ABDUL RASHID SHAHEEN
(a) & (b) : The Reserve Bank of India (RBI) has received representations from the public about
rejection of their loan / credit card applications without assigning reasons thereof. Government
has advised RBI / Indian Banks` Association (1BA) to take appropriate corrective measures to
ensure that customers of the banks get efficient and hassle free banking services at affordable
charges. Banking Ombudsmen have been appointed for quick disposal of the complaints of the bank
customers. The banks are also required to set up internal grievance redressal mechanism to redress
the grievances of their customers in a time-bound manner.The revised Banking Ombudsman Scheme,
effective from 1st January, 2006, provides a forum to the bank customers to seek redressal of
their complaints against banks including those relating to credit cards, service charges, promises
made by the sales agents of the banks but not honoured by banks, etc. RBI has issued Fair Practices
Code for Lenders on 5th May 2003 advising commercial banks and All India Financial Institutions
that in case of small borrowers seeking loans upto Rs. 2 lakhs, the lenders should, within a
stipulated time, convey in writing the main reasons which have led to rejection of the loan
applications. IBA has issued a Fair Practices Code to be voluntarily followed by the member
banks. The Code provides that, wherever possible, reasons for rejection of loans including
credit card limits be conveyed to the customers. The Banking Codes and Standards Board of India
(BCSBI) has been set up to ensure that the banks formulate and adhere to a comprehensive code of
conduct for fair treatment to customers.