Banking Awareness Notes: Banking Ombudsmen Scheme

Mentor for Bank Exams
Banking Awareness Notes: Banking Ombudsmen Scheme
The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 (A) of the Banking Regulation Act, 1949 by RBI with effect from 1995. The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. As on date, 20th Banking Ombudsmen have been appointed with their offices located mostly in state capitals. Under the Banking Ombudsman Scheme, all Scheduled Commercial Banks, Regional Rural Banks, and Scheduled Primary Co-operative Banks are covered. The Banking Ombudsman Scheme was first introduced in 1995 and was revised in 2002. The current scheme became operative from January 2006.
The Banking Ombudsman can receive and consider any complaint relating to the following deficiency in banking services (including internet banking):
1. Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.
2. Non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for charging of commission in respect thereof.
3. Non-acceptance, without sufficient cause, of coins, tendered and for charging of commission in respect thereof;
4. Non-payment or delay in payment of inward remittances.
5. Failure to issue or delay in issue of drafts, pay orders or bankers’ cheques.
6. Non-adherence to prescribed working hours.
7. Failure to provide or delay in providing a banking facility (other than loans and advances) promised in writing by a bank or its direct selling agents.
8. Delays, non-credit of proceeds to parties accounts, non-payment of deposit or non-observance of the Reserve Bank.
9. Directives, if any, applicable to rate of interest on deposits in any savings, current or other account maintained with a bank.
10. Complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank-related matters.
11. Refusal to open deposit accounts without any valid reason for refusal.
12. Levying of charges without adequate prior notice to the customer.
A customer can also lodge a complaint on the following grounds of deficiency in service with respect to loans and advances
1. Non-observance of Reserve Bank Directives on interest rates.
2. Delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan applications.
3. Non-observance of any other direction or instruction of the Reserve Bank as may be specified by the Reserve Bank for this purpose from time to time.
4. The Banking Ombudsman may also deal with such other matter as may be specified by the Reserve Bank from time to time.
Points to remember
1. The Banking Ombudsman does not charge any fee for filing and resolving customers’ complaints.
2. The amount, if any, to be paid by the bank to the complainant by way of compensation for any loss suffered by the complainant is limited to the amount arising directly out of the act or omission of the bank or Rs 10 lakhs, whichever is lower.
3. The Banking Ombudsman may award compensation not exceeding Rs 1 lakh to the complainant only in the case of complaints relating to credit card operations for mental agony and harassment.
4. If a complaint is not settled by an agreement within a period of one month, the Banking Ombudsman proceeds further to pass an award. Before passing an award, the Banking Ombudsman provides the reasonable opportunity to the complainant and the bank, to present their case.
5. If one is not satisfied with the decision passed by the Banking Ombudsman, one can approach the appellate authority against the Banking Ombudsmen’s decision.
6. If one is aggrieved by the decision, one may, within 30 days of the date of receipt of the award, appeal against the award before the appellate authority.
7. Appellate Authority is vested with a Deputy Governor of the RBI.
As on date, there are 20 Banking Ombudsman centre located in India.
1. Ahmedabad, Gujarat
2. Bengaluru, Karnataka
3. Bhopal, Madhya Pradesh
4. Bhubaneswar, Odisha
5. Chandigarh
6. Chennai, Tamil Nadu
7. Guwahati, Assam
8. Hyderabad, Telangana
9. Jaipur, Rajasthan
10. Kanpur, Uttar Pradesh
11. Kolkata, West Bengal
12. Mumbai, Maharashtra
13. New Delhi (I)
14. New Delhi (II)
15. Patna, Bihar
16. Thiruvananthapuram, Kerala
17. Dehradun, Uttarakhand
18. Ranchi, Jharkhand
19. Jammu, Jammu and Kashmir
20. Raipur, Chhattisgarh