I might get crucified for this take but here's what I believe.
All banks have their internal policies. All banks do a hard enquiry for a credit card, and based on that and their policies, one may or may not get a card.
Just because a hard enquiry is done, a card is not guaranteed. A bank may have requirements as high as the Great wall of China, but they have the complete right to do that. If 99% people don't get a card, it's not a reason for escalation.
In my opinion, federal bank has done nothing out of the ordinary that requires an escalation. People applied, they made a credit enquiry, most didn't make the cut according to their policies (including me), no offers were given. Seems completely normal and what any other bank would likely do.