what is the banking ombudsman scheme

8/14/2019 What is the Banking Ombudsman Scheme

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WHAT IS THE BANKING OMBUDSMANSCHEME

The Scheme is introduced with the objectof enabling resolution of complaints

relating to certain services rendered bybanks and to facilitate the satisfaction orsettlement of such complaints.

The Banking Ombudsman Scheme isintroduced under Section 35 A of theBanking Regulation Act, 1949 by RBI


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Reserve Bank frames the guidelinesfor operationalizing the Scheme andadministers the running of the

Scheme. In order to make the Scheme

independent and effective, since

January 2006, the 15 BankingOmbudsmen Offices are fully fundedby the Reserve Bank


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WHO IS A BANKING OMBUDSMAN?

The Banking Ombudsman is a senior official appointedby the Reserve Bank of India to redress customercomplaints against deficiency in certain bankingservices.

Banking Ombudsman means any person appointed

under Clause 4 of the Scheme. Clause 4

Appointment & Tenure:-

(1) The Reserve Bank may appoint one or more of itsofficers in the rank of Chief General Manager or

General Manager to be known as BankingOmbudsmen to carry out the functions entrusted tothem by or under the Scheme.

(2) The appointment of Banking Ombudsman under theabove Clause may be made for a period not exceeding


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HOW MANY BANKING OMBUDSMEN HAVEBEEN APPOINTED AND WHERE ARE THEY

As on date, fifteen BankingOmbudsmen have been appointedwith their offices located mostly instate capitals.

The addresses and contact details of

the Banking Ombudsman officeshave been provided in the table.


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ADDRESS AND AREA OF OPERATION OF BANKING


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WHICH ARE THE BANKS COVERED UNDER THE

All Scheduled Commercial Banks,Regional Rural Banks and ScheduledPrimary Co-operative Banks arecovered under the Scheme.


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WHAT ARE THE GROUNDS OF COMPLAINTS?

The Banking Ombudsman can receive and consider any complaint relating to thefollowing deficiency in banking services (including internet banking):

non-payment or inordinate delay in the payment or collection of cheques,drafts, bills etc.;

non-acceptance, without sufficient cause, of small denomination notes tenderedfor any purpose, and for charging of commission in respect thereof;

non-acceptance, without sufficient cause, of coins tendered and for charging ofcommission in respect thereof;

non-payment or delay in payment of inward remittances ;

failure to issue or delay in issue of drafts, pay orders or bankers cheques;

non-adherence to prescribed working hours ;

failure to provide or delay in providing a banking facility (other than loans andadvances) promised in writing by a bank or its direct selling agents;

delays, non-credit of proceeds to parties accounts, non-payment of deposit ornon-observance of the Reserve Bank directives, if any, applicable to rate ofinterest on deposits in any savings,current or other account maintained with abank ;

complaints from Non-Resident Indians having accounts in India in relation totheir remittances from abroad, deposits and other bank-related matters;


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non-adherence by the bank or its subsidiaries to theinstructions of Reserve Bank on ATM/Debit card operationsor credit card operations;

non-disbursement or delay in disbursement of pension (tothe extent the grievance can be attributed to the action onthe part of the bank concerned, but not with regard to itsemployees);

refusal to accept or delay in accepting payment towardstaxes, as required by Reserve Bank/Government;

refusal to issue or delay in issuing, or failure to service ordelay in servicing or redemption of Government securities;

forced closure of deposit accounts without due notice orwithout sufficient reason;

refusal to close or delay in closing the accounts;

non-adherence to the fair practices code as adopted by thebank or non-adherence to the provisions of the Code of


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non-observance of Reserve Bank guidelines on engagement of recovery agentsby banks; and

any other matter relating to the violation of the directives issued by the ReserveBank in relation to banking or other services.

A customer can also lodge a complaint on the following grounds of deficiency inservice with respect to loans and advances

non-observance of Reserve Bank Directives on interest rates;

delays in sanction, disbursement or non-observance of prescribed timeschedule for disposal of loan applications;

non-acceptance of application for loans without furnishing valid reasons to theapplicant; and

non-adherence to the provisions of the fair practices code for lenders as

adopted by the bank or Code of Banks Commitment to Customers, as the casemay be;

non-observance of any other direction or instruction of the Reserve Bank asmay be specified by the Reserve Bank for this purpose from time to time.

The Banking Ombudsman may also deal with such other matter as may bespecified by the Reserve Bank from time to time.


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WHEN CAN ONE FILE A COMPLAINT?

One can file a complaint before theBanking Ombudsman if the reply isnot received from the bank within a

period of one month after the bankconcerned has received one srepresentation, or the bank rejects

the complaint, or if the complainantis not satisfied with the reply givenby the bank.


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WHEN WILL ONE S COMPLAINT NOT BECONSIDERED BY THE OMBUDSMAN ?

One s complaint will not be considered if:

a. One has not approached his bank for redressal of his grievance first.

b. One has not made the complaint within one year from the date one has receivedthe reply of the bank or if no reply is received if it is more than one year and

one month from the date of representation to the bank.

c. The subject matter of the complaint is pending for disposal / has already beendealt with at any other forum like court of law, consumer court etc.

d. Frivolous or vexatious.

e. The institution complained against is not covered under the scheme.

f. The subject matter of the complaint is not within the ambit of the BankingOmbudsman.


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WHAT IS THE PROCEDURE FOR FILING THECOMPLAINT BEFORE THE BANKING

OMBUDSMAN?

One can file a complaint with theBanking Ombudsman simply bywriting on a plain paper. One can

also file it online (atwww.bankingombudsman.rbi.org.inor by sending an email to the

Banking Ombudsman. There is aform along with details of thescheme in RBI website. However, it is


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WHERE CAN ONE LODGE HIS/HER COMPLAINT?

One may lodge his/ her complaint atthe office of the Banking Ombudsmanunder whose jurisdiction, the bank

branch complained against is situated. For complaints relating to credit cards

and other types of services withcentralized operations, complaints maybe filed before the BankingOmbudsman within whose territorialurisdiction the billin address of the


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CAN A COMPLAINT BE FILED BY ONE S

AUTHORIZED REPRESENTATIVE?

Yes. The complainant can be filed byone s authorized representative(other than an advocate).

authorised representative means aperson duly appointed andauthorised by a complainant to acton his behalf and represent him inthe proceedings under the Schemebefore a Banking Ombudsman forconsideration of his complaint.


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IS THERE ANY COST INVOLVED IN FILING

COMPLAINTS WITH BANKING OMBUDSMAN?

No. The Banking Ombudsman doesnot charge any fee for filing andresolving customers complaints.


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IS THERE ANY LIMIT ON THE AMOUNT OFCOMPENSATION AS SPECIFIED IN AN AWARD?

The amount, if any, to be paid by thebank to the complainant by way ofcompensation for any loss suffered

by the complainant is limited to theamount arising directly out of the actor omission of the bank or Rs 10

lakhs, whichever is lower.


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CAN COMPENSATION BE CLAIMED FOR MENTALAGONY AND HARASSMENT?

The Banking Ombudsman may awardcompensation not exceeding Rs 1lakh to the complainant only in the

case of complaints relating to creditcard operations for mental agonyand harassment. The BankingOmbudsman will take into account

the loss of the complainant s time,expenses incurred by thecomplainant, harassment and mental


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WHAT DETAILS ARE REQUIRED IN THEAPPLICATION?

The complaint should have the nameand address of the complainant, thename and address of the branch or

office of the bank against which thecomplaint is made, facts giving rise tothe complaint supported by documents,if any, the nature and extent of the loss

caused to the complainant, the reliefsought from the Banking Ombudsmanand a declaration about the complianceof conditions which are required to be


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WHAT HAPPENS AFTER A COMPLAINT ISRECEIVED BY THE BANKING OMBUDSMAN?

The Banking Ombudsman endeavoursto promote, through conciliation ormediation, a settlement of thecomplaint by agreement between the

complaint and the bank named in thecomplaint.

If the terms of settlement (offered bythe bank) are acceptable to one in full

and final settlement of one s complaint,the Banking Ombudsman will pass anorder as per the terms of settlementwhich becomes binding on the bank


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CAN THE BANKING OMBUDSMAN REJECT ACOMPLAINT AT ANY STAGE?

Yes.

The Banking Ombudsman may reject a complaint at any stage if itappears to him that a complaint made to him is:

not on the grounds of complaint referred to above

compensation sought from the Banking Ombudsman is

beyond Rs 10 lakh . requires consideration of elaborate documentary and

oral evidence and the proceedings before the BankingOmbudsman are not appropriate for adjudication ofsuch complaint

without any sufficient cause that it is not pursued by the complainant with

reasonable diligence

in the opinion of the Banking Ombudsman there is noloss or dama e or inconvenience caused to the


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WHAT HAPPENS IF THE COMPLAINT IS NOTSETTLED BY AGREEMENT?

If a complaint is not settled by anagreement within a period of onemonth, the Banking Ombudsman

proceeds further to pass an award.Before passing an award, the BankingOmbudsman provides reasonableopportunity to the complainant and the

bank, to present their case. It is up to the complainant to accept the

award in full and final settlement ofour com laint or to re ect it.


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IS THERE ANY FURTHER RECOURSE AVAILABLEIF ONE REJECTS THE BANKING OMBUDSMANS

If one is not satisfied with the decisionpassed by the Banking Ombudsman,one can approach the appellateauthority against the Banking

Ombudsmens decision. Appellate Authority is vested with a

Deputy Governor of the RBI. One can also explore any other

recourse and/or remedies available tohim/her as per the law.

The bank also has the option to file an


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IS THERE ANY TIME LIMIT FOR FILING AN

If one is aggrieved by the decision,one may, within 30 days of the dateof receipt of the award, appeal

against the award before theappellate authority.

The appellate authority may, if he/she is satisfied that the applicant hadsufficient cause for not making anapplication for appeal within time,also allow a further period not


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HOW DOES THE APPELLATE AUTHORITY DEAL

he appellate authority may

i. dismiss the appeal; or

ii. allow the appeal and set aside the award;

oriii. send the matter to the Banking

Ombudsman for fresh disposal inaccordance with such directions as theappellate authority may consider necessaryor proper; or

iv. modify the award and pass such directionsas may be necessary to give effect to the


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SHORTCOMINGS INBANKIN MB D MAN

Most of the customers are less Englisheducated and unaware of existence ofombudsman.

When there is no complaint no actionthe ombudsman ever initiates anyaction on his own accord.

There is wide spread corruption insanctioning of bank products delayed

sanction official procedure paper worktroubles the customers.

Rural urban and sub urban area

what is the banking ombudsman scheme

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