Any fault, shortcomings, inadequacy, and imperfection in the quality, nature or manner of performance of the service is a deficiency. This definition is part of a section under Consumer Protection Act.
As a consumer you can hold the institution (banks or a company) accountable and file a complaint if they do not improve their service.

Example:
Radha submits a cheque of 1000 rupees in bank to pay back Rekha’s money. There was sufficient balance in her account and yet the bank did not make transaction and treated her badly. Upon complaint, the bank did not provide a satisfactory response. This situation and many such come under deficiency of service.