Important FAQs on Banking Ombudsman
Q. Who is a Banking Ombudsman?
Banking Ombudsman is a senior official which is a quasi-judicial authority created in 2006 by the Reserve bank of India.
Q. What is the role of a Banking Ombudsman?
A Banking Ombudsman has the responsibility to redress the complaints of the customers against deficiency in certain banking services covered under the grounds of complaint specified under Clause 8 of the Banking Ombudsman Scheme 2006.
He is responsible to resolve the dispute between the bank and the aggrieved party irrespective of the amount of the money involved in the complaint.
Q. What is the Banking Ombudsman Scheme?
The Banking Ombudsman Scheme was introduced in 2006 with the objective to resolve the grievance of the customers availing banking facilities. It is an expeditious and inexpensive forum for the bank customers. The Scheme was introduced under Section 35A of the Banking Regulation Act, 1949. The scheme is governed by the Reserve Bank of India.
Q. When can a customer file a complaint with the Banking Ombudsman?
The aggrieved party cannot directly approach a Banking Ombudsman. Instead, the party will have to first raise a complaint with the concerned bank against whose banking services it has a complaint. On non-redressal of the complaint by the concerned bank, that is, if the aggrieved party does not receive a reply within 1 month of the time of raising a complaint with the concerned bank, the party can approach the Banking Ombudsman.
Also, if the party is not satisfied with the reply given, the party can approach to the Banking Ombudsman.
Q. On which grounds a complaint can be filed with a Banking ombudsman?
- non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
- non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for charging of commission in respect thereof;
- non-acceptance, without sufficient cause, of coins tendered and for charging of commission 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 and advances) promised in writing by a bank or its direct selling agents;
- delays, non-credit of proceeds to parties’ accounts, non-payment of deposit or non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits in any savings, current or other account maintained with a bank;
- complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank- related matters;
- refusal to open deposit accounts without any valid reason for refusal;
- levying of charges without adequate prior notice to the customer;
- non-adherence to the instructions of Reserve Bank on ATM /Debit Card and Prepaid Card operations in India by the bank or its subsidiaries;
- non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on credit card operations;
- non-adherence to the instructions of Reserve Bank with regard to Mobile Banking / Electronic Banking service in India by the bank;
- non-disbursement or delay in disbursement of pension (to the extent the grievance can be attributed to the action on the part of the bank concerned, but not with regard to its employees);
- refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government;
- refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government securities;
- forced closure of deposit accounts without due notice or without sufficient reason;
- refusal to close or delay in closing the accounts;
- non-adherence to the fair practices code as adopted by the bank;
- non-adherence to the provisions of the Code of Bank’s Commitments to Customers issued by Banking Codes and Standards Board of India and as adopted by the bank;
- non-observance of Reserve Bank guidelines on engagement of recovery agents by banks;
- non-adherence to Reserve Bank guidelines on para-banking activities like sale of insurance /mutual fund /other third-party investment products by banks;
- any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking or other services.
Regarding loans and advances, complaints with respect to the following areas can be lodged:
(a) non-observance of Reserve Bank Directives on interest rates;
(b) delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan applications;
(c) non-acceptance of application for loans without furnishing valid reasons to the applicant; and
(d) non-adherence to the provisions of the fair practices code for lenders as adopted by the bank or Code of Bank’s Commitment to Customers, as the case may be;
(e) non-observance of Reserve Bank guidelines on engagement of recovery agents by banks; and
(f) 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.
Q. What is the procedure for filing a complaint with the Banking Ombudsman?
The complainant can file a complaint with the banking Ombudsman by writing the complaint on a plain paper. The complaint can also be filed online or by sending an email to the Banking Ombudsman.
Q. Can compensation be claimed for harassment and mental agony?
Yes. A Banking Ombudsman can award a compensation of not more than 1 lakh rupees for harassment and mental agony to the complainant. While awarding this, the Ombudsman will take into account the loss of the complainant’s time, expenses incurred by the complainant, harassment and mental agony suffered by the complainant.
Q. What is the maximum amount the Banking Ombudsman can award as compensation?
The maximum amount the Banking Ombudsman can award as compensation is 2 million rupees.
Q. What is the maximum period a Banking Ombudsman can be appointed for?
A Banking Ombudsman can be appointed for a maximum period of 3 years at a time.
Q. Can a complaint be rejected by the Banking Ombudsman?
Yes, a Banking Ombudsman can reject a complaint on the following grounds:-
- If the complaint is not in accordance with any of the grounds given in any of the clauses of the scheme;
- Beyond the pecuniary jurisdiction of Ombudsman as prescribed in clause 12;
- requisite consideration of elaborate documentary and oral evidence and the proceedings before the Banking Ombudsman are not appropriate for adjudication of such complaint;
- complaint is without any sufficient cause;
- complaint is not pursued by the complainant with reasonable diligence;
- As per the Ombudsman’s opinion, no loss or damage or inconvenience is caused to the complainant;
- complaint pertains to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or order has been passed by any such court, tribunal, arbitrator or forum.
Q. What is the power of a Banking Ombudsman?
- Power to receive and consider complaints relating to deficiency in banking services;
- Exercise general powers of superintendence and control over his Office;
- Responsible for the conduct of business in his office;
- Powers of expenditure from the annual budget drawn by the Banking Ombudsman in consultation with the Reserve Bank of India.
Q. Is there any cost involved in filing complaints with Banking Ombudsman?
No. No fees is charged by the Banking Ombudsman for filing and resolving the complaints.
Q. What happens if the complaint is not settled by agreement?
A complaint if not settled within 1 month by an agreement, the Banking Ombudsman proceeds to pass an award. Before passing such award, the Ombudsman will provide both the complainant and the bank to present their case. It is then up to the complainant to reject or accept the award.
Q. What happens if the complaints rejects the Banking Ombudsman’s decision
On being unsatisfied with the decision of the Banking Ombudsman, the complainant can approach the Appellate Authority. The said Authority is vested with the Deputy Governor of the Reserve Bank of India. The complainant can also explore any other available recourses under the law. Not only the complainant, but the bank also has the recourse to approach the Appellate Authority on being unsatisfied with the decision of the Banking Ombudsman.
Q. What is the time limit for filing an appeal?
Appeal against the award has to be made to the Appellate Authority within 30 days of the receipt of the award. If sufficient cause is shown for not making an appeal within 30 days, the Appellate Authority can grant a time period of another 30 days.