Banking Ombudsman Scheme of RBI

Banking ombudsman scheme is an efficient, low cost and fast customer grievance forum for bank customers in India. The Banking ombudsman scheme was introduced in India by Reserve Bank of India (RBI) in 1995 under the powers conferred by Section 35 A of the Banking Regulation Act ,1949. The scheme facilitates quick resolution of customer grievances relating to deficiency in banking services rendered by the Indian banks. The guidelines relating to the banking Ombudsman scheme are periodically revised by the RBI.

Who is a Banking Ombudsman?

Banking Ombudsman is any person appointed under Clause 4 of the Banking Ombudsman Scheme to enable resolution of grievances relating to certain services rendered by banks and to facilitate settlement of such grievances. He is a senior official, normally in the rank of Chief General Manager or General Manager, appointed by the RBI. Presently, there are twenty banking ombudsmen with their offices located mostly in state capitals. 

All scheduled Commercial banks, Regional Rural Banks and Scheduled Primary Co-operative Bank are covered under the scheme. The scheme extends to entire India. 

How does a Banking Ombudsman settle complaints? 

Banking Ombudsman is empowered to accept, examine and settle complaints pertaining to the deficiencies in banking or other services, irrespective of the pecuniary value. The complaints can be settled through agreement or through conciliation and mediation between the bank concerned and the aggrieved party. He is also empowered to settle complaint by passing Award. 

On receipt of a complaint, the Ombudsman forward a copy of the complaint to the office of the bank named in the complaint, under copy to the nodal officer of the bank to facilitate settlement of the complaint by agreement between the complainant and the bank. through conciliation or mediation. If not resolved by the bank, he has power to demand for copies related documents or call for a combined meeting of the bank and complainant. A complaint will be treated as resolved if the bank resolves the issue raised or agrees for the resolution offered by the banking Ombudsman. It can also be treated as resolved if the Bank had acted as per banking norms and practices. 

If the complaint is not settled within one month from the date of receipt of complaint or the extended period, banking ombudsman can pass an award or reject the complaint after considering the evidences, banking norms, practices and guidelines. However, he has no power to pass an Award directing payment of an amount towards compensation which is more than the actual loss suffered by the complainant or twenty lakhs rupees whichever is lower. This compensation is in addition to the amount involved in the dispute. An additional amount up to one lakh rupees can be awarded towards compensation for mental agonies suffered, time spent and actual expenses. 

The complainant, if accepts the award shall submit his acceptance within 30 days of receipt of the award. The bank shall also comply with the award within 3o days of receipt if it is agreeable for settlement. Either party aggrieved by the award may approach appellate authority within 30 days of the award. 

How can a customer file complaint with Banking Ombudsman? 

A person who has a grievance against a bank can file a complaint with the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located by himself or through his authorized representative. Complaints relating to credit cards and other types of services with centralized operations, shall be filed  within whose territorial jurisdiction the billing address of the customer is located.

Complaints can be filed in writing or through electronic media. Complaints covered by this Scheme received by Central Government or RBI and forwarded to the Banking Ombudsman will also be examined. The complaint shall contain brief details of the complainant, address of the branch or office of the bank against which the complaint is made, details of complaint,  evidences there of if any, losses incurred, relief sought etc. 

However, a person can file a complaint with Banking Ombudsman only after lodging a written   complaint with the concerned bank initially. If the bank rejects the complaint or no reply is given  within thirty days of submission of the complaint, the customer can take up the matter with the banking Ombudsman. 

What are the natures of complaints entertained by Banking Ombudsman?

Complaints on the following matters can be filed with Banking Ombudsman. The nature of complaints that can be filed with the Banking Ombudsman is covered by Clause 8 of the Banking Ombudsman Scheme, 2006.

i.    Deficiency in normal banking services 
ii.    Non-adherence to the RBI guidelines on ATM card, Debit Card and Prepaid Card operations
iii.    Non-adherence by the bank to the RBI guidelines on Credit Card operations 
iv.    Non-adherence to the RBI guidelines on Mobile Banking / Electronic Banking service
v.    Non-adherence to RBI guidelines on para-banking activities like sale of insurance /mutual fund /other third party investment products
vi.    Complaints related to loans and advances

vii. Any other violation of the directives issued by the RBI in relation to banking or other services