Banking Ombudsman Scheme | Complaints, Process, Settlement

Banking Ombudsman Scheme

Banking Ombudsman:

“The Banking Ombudsman refers to the senior officials appointed by the Reserve Bank of India (RBI) to resolve the complaints against the certain services rendered by the scheduled commercial banks, RRBs Scheduled Primary Cooperative Banks.”

The Reserve Bank of India may appoint one or two of its officials typically the Chief General Manager or General Manager Rank as a Banking Ombudsman for the period of maximum 3 years.

The Banking Ombudsman has to submit the report regarding complaints resolution to the Governor of RBI on 30 June of every year. 

Banking Ombudsman Scheme:

The Banking Ombudsman Scheme was first established by the RBI as per the Section 35, of Banking Regulation Act 1949 in 1995 and further amended in 2006 and 2009. The current offices of Banking Ombudsman are 22 situated at the state capital.

Banking Ombudsman Scheme facilitates the customers to complain against if they don’t satisfy the services or have any dispute regarding the deficiency in services offered by their banks. The scheduled commercial banks, RRBs (Regional Rural Banks) and Scheduled Primary Cooperatives Banks are supervised under the Banking Ombudsman Scheme.

Any person who has a grievance against a bank can file a complaint to the Banking Ombudsman within one year from the date of the deficiency. 

Complaints handled under Banking Ombudsman Scheme:

Some most typical kinds of complaints which may be faced by every customer during banking services are mentioned below.

  • Non-adherence to prescribed working hours.
  • If the banks deny for open a bank account without any valid reasons for refusal and refusal or delay in closing the account.
  • If the banks forced to close the deposit accounts without any prior notice or valid reason.
  • The False promise in writing or delay regarding banking services (Except loan & advances) by the banks or its direct agents.
  • Non-payment or delay in payment or collections of cheques, draft, bills etc.
  • If the banks don’t accept small denomination notes without any sufficient reason or charging a commission to offer such services.
  • Also, in case banks don’t accept the coins tendered or asking for a commission to provide this kind of services.
  • Non-payment or delay in case of inward remittances.
  • The NRIs (Non-Residents Indian) having their account in India can also complaints regarding remittances from abroad,  deposits or other banking services.
  • If the banks don’t issue or delay in issuing draft, pay orders, bankers cheques.
  • Levying of charges without any appropriate and prior notice to the customer.
  • If the banks refuse or delay in accepting payment towards the Taxes as required by RBI or Government.

Complaints regarding ATM/ debit cards or Prepaid Cards:

  • Non-adherence to the instructions of Reserve Bank on ATM / Debit Card and Prepaid Card operations in India by the bank or its subsidiaries
  • If you use ATM but cash didn’t dispense but your account has been debited.
  • If your account has been debited two times instead of one time.
  • Less/excess amount of cash withdrawal during ATM or POS transactions.
  • Automatically debited the amount without using ATM or debit card.
  • Uses of stolen/ clone card
  • Others

Banking Ombudsman

Complaints related to Credit Cards/ Loan and Advances:

  • Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on credit card operations
  • If the bank delays sanction or disbursement or not responding loan applications within the prescribed time frame as per the Reserve Bank guidelines.
  • If the bank refuses the loan application without furnishing a valid reason for rejection.
  • Wrong debit or wrong billings.
  • Forcefully calls for add on or to upgrade the cards or for insurance of the cards.
  • If the banks charge annual fees on lifetime free cards.
  • Threatening calls/ inappropriate ways of recovery by the recovery agents or avoid the guidelines of Reserve Bank on the engagement of recovery agents.
  • Wrong information on credit rating to the Credit Information Bureau.
  • Delay or no action to review and correct the credit rating (status) because of the wrong information of credit information to the Credit Information Bureau.

Moreover, the Banking Ombudsman (BO) may also deal with such matters specified by the Reserve Bank. You may follow the link below for more detail information about the types of complaints entertained by the BO.

Complaint not considered by the Banking Ombudsman:

There are some circumstances when your complaint is not entertained by the BO which discussed below.

  • If you didn’t approach your bank to resolve the issues first.
  • If you don’t approach within one year from the date of a grievance. You will get an extra 30 days rebate if approached your banks for issues.
  • If the matter is already dealt or pending for disposal with any other forum like Civil court or Consumer court.
  • The institution complaints are not covered under the banking ombudsman scheme.
  • Frivolous or vexatious complaints.
  • The subject matters of complaints must be specified as per clause 8 of the Banking Ombudsman Scheme. Also if the same subject matter of complaints settled before in any previous preceding.

Banking Ombudsman Scheme (FAQ) by RBI

Process of filing complaints in Banking Ombudsman:

One can complain with the Banking Ombudsman (BO) within 30 days if he didn’t get a reply from the concerned bank or refusal of complain or not satisfy the decision of the banks. Any individual can complain to the BO due to the deficiency in banking services by himself or his authorised representative other than the advocates.

There are three ways to file complaints under the banking ombudsman scheme.

  1. You can simply write on a plain paper to the Banking Ombudsman.
  2. You can email the BO in a prescribed format, however, it is not mandatory to write in a prescribed format.
  3. You file a complaint online as well.

The Reserve Bank made an exclusive portal ie. Complaints Management System of RBI (CMS) for receiving and resolving complaints regarding deficiency in banking services.

You can not only file your complaints through this portal but you can also track your status of complaints as well as you can appeal if you are not satisfied with the decision of Banking Ombudsman. 

One can file his complaints online directly in Banking Ombudsman by following the link below.

To file your complaint in Banking Ombudsman click here

For a detailed explanation, you can follow the link below.

How to complain to Banking Ombudsman? (Step by Step Guide)

Settlement of Complaints by Agreement:

The Banking Ombudsman (BO) send a copy of complaints to the concerned branch office of the bank or directly to the branch. The BO first try to resolve the complaint by the mutual agreement between the complainant and the concerned bank. It allows 30 days from the date of receipt of the complaint to settle the complaint of the customer.

Award by the Banking Ombudsman:

If the complaint is not settled by mutual agreement of both the parties within 30 days or such another period allowed by the BO, then BO can declare the award as follows.

  • The Banking Ombudsman can declare a maximum award of Rs 20 Lac as per the assessment.
  • If the complainant claims the expenses or the compensation due to harassment, mental agony, the Banking Ombudsman can award a maximum of Rs 1 lac as compensation.
  • A copy of the award shall be sent to both banks as well as the complainant.
  • The complainant has to accept the award declared by the BO within 30 days otherwise the award will lapse.

Appeal against Order passed by Banking Ombudsman:

If the complainant is not satisfied by the decision of the BO, he can appeal to the Appellate Authority, the Deputy Governor of RBI) within 30 days. Further, if the Appellate Authority satisfies that the complainant had sufficient cause for appealing, then he can further order for reconsideration and allow the period not exceeding 30 days.

Conclusion:

Hope you have understood the concept and importance of the Banking Ombudsman Scheme in the digital world as well as in the banking industry. In a nutshell, the Banking Ombudsman is the supreme authority established by the Reserve Bank for the sake of customer’s interest without the interference of the judiciary system.

Recommended Articles:

How to lodge a complaint in Banking Ombudsman? (Step By Step Guide)

10 Major functions of Reserve Bank

 

References:

Complaint Management System FAQ Reserve Bank of India 

 

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