Page 7 - Banking Finance January 2020

BANK UPDATE

Complaints to banking ICICI Bank opens second service centre in Bahrain
ombudsman rose by 20% ICICI Bank said India's Ambassador to Bahrain Alok Kumar Sinha inaugurated its
new 'service center' in Bahrain, making it the bank's
in FY19’ second physical touch point in the country. The bank
Complaints to banking ombudsman already has a retail branch at the local Manama Cen-
increased tre, it said in a statement. The new service center will
by nearly provide services for all products offered by the Manama
20% to branch, except cash deposit and withdrawal.
over 1.96
The bank offers retail, private banking and corporate banking services in
lakh during Bahrain, the statement said. It offers products, especially designed for custom-
2018-19,
ers in Bahrain, such as savings and current account, fixed deposits and global
with non-adherence to fair practices money transfer, life insurance products and general insurance products, it said.
accounting for the highest number of
cases, RBI data revealed. Non-obser-
vance of fair practices code ac- Banks writes to RBI to extend deadline for inter-credi-
counted for a maximum number of tor pacts
complaints, the Reserve Bank of In- Leading banks have written to the Reserve Bank of India (RBI) asking it to ex-
dia (RBI) said in the Annual Report tend the deadline for signing intercreditor agreements
of Ombudsman Schemes for 2018-19. (ICAs) by another three months so that cases close to

The complaints received at Offices of resolution are not referred to the National Company
Banking Ombudsman (OBOs) rose by Law Tribunal (NCLT) as the January 7 deadline ap-
32,311, taking the total to 1,95,901 proaches.
complaints in 2018-19 over the pre- "We have written to RBI seeking extension of inter-
vious year (1,63,590), recording a creditor agreement deadline of January 7 by three months so that cases are
year-on-year increase of 19.75%, the
not referred to NCLT," said a senior public sector banker. Banks are willing to
Reserve Bank said. Even as com- make the additional 20% provision that breaching the deadline entails but want
plaints related to unfair practices the window of resolution open until the March 31 financial year end to avoid
topped the list, the percentage share the value destruction that they say would follow by taking the NCLT route as
came down to 19.17% in 2018-19
prescribed by the Insolvency and Bankruptcy Code (IBC). The ICA mechanism
from 22.10% a year ago.
was established in order to arrive at a resolution plan within a specific period
Complaints on ATM and debit card is- (30+180 days) for bad loans without entering the NCLT process.
sues increased from 15.08% in 2017-
Lenders need to come up with an ICA resolution plan for loans worth Rs 3 lakh
18 to 18.65% in 2018-19; while those
related to pension, levy of charges crore by January 7- the deadline for most stressed accounts - failing which they
without notice, credit card related have to make a 20% provision and refer cases to the NCLT within 30 days. "Value
issues and remittance declined dur- destruction happens when cases are sent to NCLT."
ing the year, the RBI said. The num-
ber of complaints pertaining to mis- ICICI Bank, Axis Bank to close operations in Sri Lanka
selling has gone up from 579 com- The Central Bank of Sri Lanka has permitted Indian private sector lenders Axis
plaints in 2017-18 to 1,115 in 2018- Bank and ICICI Bank to close their operations in the
19, an increase of 92.57%. island nation, according to online news portal of Sri
"The average cost of handling a com- Lanka.
plaint came down from Rs 3,504 in This follows requests by their parent banks. The li-
2017-18 to Rs 3,145 in 2018-19," it censes issued to them will be cancelled once the
said. The disposal rate for 2018-19 winding-up operations are complete. The news por-
was 94.03% as against 96.46% in tal said the two banks are no longer permitted to
2017-18.
carry on banking operations, including accepting deposits from the public.

BANKING FINANCE | JANUARY | 2020 | 7