In a significant judgment delivered on Thursday, 27 November 2025, the Delhi High Court directed the Reserve Bank of India (RBI) and all banks across the country to strengthen their customer grievance-redressal systems. The court emphasized that millions of customers today suffer from issues such as wrong billing, fraudulent transactions, repeated threatening calls, and illegal recovery practices, and therefore the banking system must become more accountable and transparent.
Complaints Must Be Reviewed by Humans, Not Just Machines
Justice Prabha M. Singh stated that complaints should not be rejected solely on the basis of automated systems. She noted that if a customer makes a mistake while filing a complaint, the bank must give them an opportunity to correct it.
The court observed that many complaints are dismissed without human intervention by the Ombudsman, leaving customers with no option but to approach the court. To prevent this, the court recommended that the Ombudsman offices include retired judges, legal experts, or experienced lawyers to ensure that important complaints are not wrongly rejected.
RBI Must Issue New Directions to All Banks
The High Court has instructed the RBI to issue a circular to all banks, directing them to publish a simple, easy-to-understand flowchart on their official websites. This chart must clearly explain the step-by-step grievance-redressal process:
Customer Care → Branch Manager → Nodal Officer → Ombudsman
The court said the entire process must be fully transparent and user-friendly.
Court’s Stern Action Triggered by a Lawyer’s Case
The ruling came during the hearing of a petition filed by lawyer Sarwar Raza, who was being harassed for a credit-card transaction he never made.
Case Summary:
- The bank had already refunded the disputed transaction of ₹76,777.
- However, after closing the complaint, the bank added late fees, interest, and penalties.
- Raza continued to receive constant calls and messages from recovery agents.
The court termed this behaviour illegal and a clear violation of consumer rights.
Delhi High Court Grants Major Relief to the Customer
The court issued the following directives:
- The bank cannot charge any late fees, interest, or penalty.
- The customer’s CIBIL score must not be affected.
- The bank must pay the customer ₹1 lakh as compensation, which is to be issued by 15 January 2026.
Why This Order Matters
Every year, millions of customers in India face problems such as:
- Wrong billing
- Fraudulent transactions
- Harassment by collection agents
- Credit-card fraud
- Illegal interest and penalty charges
- Complaints closed without proper investigation
The Delhi High Court’s decision is expected to provide major relief to banking customers and compel banks, along with the RBI, to improve grievance-redressal mechanisms across the country.
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