a study on banking ombudsman scheme with special reference to axis bank

7/27/2019 A Study on Banking Ombudsman Scheme With Special Reference to Axis Bank

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A STUDY ON BANKING OMBUDSMAN SCHEME WITH

SPECIAL REFERENCE TO AXIS BANK

Submitted in partial fulfillment of the requirement of

Auxilium college (Autonomous) for the award of the

MASTER DEGREE

In

COMMERCE

Submitted By

B.SWAPNA

(REG. NO. ECO10836)

Under the guidance of

Dr. N. FATHIMA THABASSUM

ASSISTANT PROFESSOR

DEPARTMENT OF COMMERCE

AUXILIUM COLLEGE, (Autonomous)

(Re-Accredited by NAAC with A Grade with a CGPAof3.41outof4)

Vellore632006

20112012


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DEPARTMENT OF COMMERCE

AUXILIUMCOLLEGE, (Autonomous)

(Re- Accredited by NAAC with A Grade with a CGPA OF 3.41 out 4)

Vellore-632006

(CERTIFICATE)

This is to certify that this project report entitled A STUDY ON

BANKING OMBUDSMAN SCHEME WITH SPECIAL

REFERENCE TO AXIS BANK being submitted to AUXILIUMCOLLEGE (Autonomous), Vellore by

B. SWAPNA, Register No: ECO10836 For the award of the Masters

Degree in Commerce is a bonafide record of work carried out by her,

under our guidance and supervision.

Ms. AUXILIA ROZARIO Dr. N. Fathimathabasum

Head of Assistant .professor Assistant. ProfessorDepartment of commerce Department of commerce(SHIFT II) (SHIFT II)Auxilium College, Auxilium College,Gandhi nagar, Gandhi nagar,Vellore - 632006. Vellore - 632006.

Submitted for the Viva-voce Examination

Examiners:

1.

2.


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DECLARATION

I hereby declare that the project work entitled A STUDY ON

BANKING OMBUDSMAN SCHEME WITH SPECIAL

REFERENCE TOAXIS BANKcarried out in partial fulfillment of the

master of commerce degree course of Auxilium College (Autonomous) in

my original work.

Place: Vellore

Date: March 2012 B.SWAPNA


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ACKNOWLEDGEMENT

I thank God, the Almighty who is the author of all inspiration.

I extend my sincere thanks to Auxilium Collegefor giving me an

opportunity to undertake this project for the Master Degree in Commerce.

I would like to thank our respected principal Rev. Sr. Dr.

EUGINI FATHIMA MARY. L. M.A., Ph.D., L.S.G. for giving us the

inspiration and moral support to complete our project work.

I express my deep sense of gratitude to Mrs. Auxilia Rozario

M.com. M.Phil, Ph.D., Head in charge, Department of Commerce

(shift II),for motivating and inspiring me to complete this project work.

I express my sincere gratitude to my respectable guide Dr.

N.Fathima Thabassum M.Com., M.Phil, MBA., Ph.D., AssistantProfessor, Auxilium College.

I express my faithful gratitude to my loving ParentsMr. S. BOSE

AND Mrs. B. VIJAYA and my beloved Sisters for their help and

support with which I could purse my research without any difficulty. I

would also like to thank my friends for their help, moral support and

motivation.

Finally, I wish to express my thanks to the entire end-users who

extended their kind help and co-operation in completing my project work

successfully.

B. SWAPNA


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CONTENTS

CHAPTER

NO

PARTICULARS PAGE

NO

I INTRODUTION

1.1. Introduction 1

1.2 Characteristics of Banking Ombudsman 2

1.3 Need for the study 3

1.4. Objectives of the study 4

1.5. Research Methodology 4

1.6. Limitations of the study 5

1.7. Chapterisation 6

II BANKING OMBUDSMAN SCHEME 7

III CASE STUDIES IN BANKING

COMPLAINTS AND REDRESSAL

18

IV PROFILE OF AXIS BANK 23

V DATA ANALYSIS AND

INTERPRETATION-I: performance of

Banking Ombudsman in Indian banking

Sector

32

VI DATA ANALYSIS AND

INTERPRETATION-II: performance of

Banking Ombudsman in AXIS Bank

54

VII FINDINGS AND CONCLUSIONS 60

BIBLIOGRAPHY

APPENDEX


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LIST OF TABLE

SI.NO TITLE PAGE NO.

5.1 RECEIPTS OF COMPLAINTS 32

5.2 BOOFFICE WISE RECEIPT OF COMPLAINTS 34

5.3 REGION WISE RECEIPT OF COMPLAINTS 36

5.4 MODE WISE RECEIPT OF COMPLAINTS 38

5.5 BANKGROUP WISE RECEIPT OF

COMPLAINTS

40

5.6 CATEGORY WISE RECEIPT OF COMPLAINTS 425.7 DISPOSAL OF COMPLAINTS BY BOOFFICE 44

5.8 MODE OF DISPOSAL OF COMPLAINTS 46

5.9 DISPOSAL OF MAINTAINABLE COMPLAINTS 48

5.10 REJECTED COMPLAINS 49

5.11 PENDING POSITION OF COMPLAINTS AT BO

OFFICES

51

5.12 COST RUNNING THE SCHEME 52

5.13 DISPOSAL OF COMPLAINTS BANKING

OMBUDSMAN

53

6.1 CUSTOMER COMPLAINTS OF AXIS BANK 55

6.2 DISPOSAL OF COMPLAINTS AXIS BANK 57



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List of Charts

CHART NO TITLE PAGE NO.

5.1 RECEIPTS OF COMPLAINTS 33

5.2 REGION WISE RECEIPT OF COMPLAINTS 36

5.3 MODE WISE RECEIPT OF COMPLAINTS 38

5.4 BANK GROUP WISE RECEIPT OFCOMPLAINTS

41

5.5 CATEGORY WISE RECEIPT OFCOMPLAINTS

43

5.6 DISPOSAL OF COMPLAINTS BY BOOFFICE 44

5.7 MODE OF DISPOSAL OF COMPLAINTS 46

5.8 DISPOSAL OF MAINTAINABLECOMPLAINTS

48

5.9 REJECTED COMPLAINS 50

5.10 PENDING POSITION OF COMPLAINTS ATBOOFFICES

51

5.11 DISPOSAL OF COMPLAINTS BANKINGOMBUDSMAN

53

6.1 CUSTOMERS OF COMPLAINTS AXIS BANK 55




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CHAPTER I

INTRODUCTION AND DESIGN OF THE STUDY

1.1. Introduction

In the present banking system, excellence in customer service is the most

important tool for sustained business growth. Customer complaints are

part of the business life of any corporate entity. This is more so for banks

because they are service organizations. Over a period of time, the number

of complaints against banks with regard to deficiency of their services has

been in spite of several efforts taken by the banks on the advice of the

Reserve Bank of India.

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 has been

introduced under Section 35A of the Banking Regulation Act, 1949by

theReserve Bank of India with effect from 1995.

All Scheduled Commercial Banks, Regional Rural Banks and Scheduled

Primary Co-operative Banks are covered under the Scheme and the

Banking Ombudsman can receive and consider any complaint relating to

deficiency in banking services. One can file a complaint before the

Banking Ombudsman if a reply is not received from the bank within a

period of one month after the bank concerned has received one's

representation, or the bank rejects the complaint, or if the complainant is

not satisfied with the reply given by the bank.
http://pnbindia.in/BANK%20REGULATION%20ACT.pdfhttp://www.rbi.org.in/http://www.rbi.org.in/http://pnbindia.in/BANK%20REGULATION%20ACT.pdf


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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. Appellate authority is vested with a

Deputy Governor of the RBI.

1.2. CHARACTERISTICS OF BANKING OMBUDSMAN

The Banking Ombudsman is a quasi judicial authority. It has

power to summon both the parties -bank and its customer, to

facilitate resolution of complaint through mediation.

All Scheduled Commercial Banks, Regional Rural Banks and

Scheduled Primary Co-operative Banks are covered under the

Scheme.

The Banking Ombudsman has power to consider complaints from

Non-Resident Indians having accounts in India in relation to their

remittances from abroad, deposits and other bank-related matters.

The Banking Ombudsman does not charge any fee for resolving

customers complaints. Complaint can be made before a Banking

Ombudsman on the same subject matter for which any proceedings

before any court, tribunal or arbitrator or any other forum is

pending or a decree or award or a final order, has already been

passed by any such competent court, tribunal, arbitrator or forum.


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1.3. Need for the study

In the present scenario of competitive banking, excellence in customer

service is the most important tool for sustained business growth.

Customer service has been the challenging job in the banking industry,

specifically, after the financial sector reforms and implementation of new

age technology. Providing prompt and efficient service is on the top

agenda of commercial banks to attract and retain the new customers.

Making banks more customer-friendly has also been high on the agenda

of the Reserve Bank of India. It is the result of RBIs initiatives that today

all commercial banks have their own grievance redressal cells to handle

the grievances of their customers. However, sometimes, customers

complaints are not handled properly by banks, which may result in

dissatisfaction to the customers. At this point of time customer is in adilemma about where to file a complaint against the deficiency in

services rendered by the banks. Courts may not be the right choice

because of long time involved in settling of cases and heavy costs. Here,

Reserve Bank of India has provided an alternative mechanism to handle

the customers grievances by setting up of Bank Ombudsman in India.

Keeping in mind these two important aspects of Bank Ombudsman thepresent study has been designed i) to study the mechanism and operations

of Bank Ombudsman in India and ii) to evaluate the performance of bank

ombudsman


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1.4. Objectives of the study:

To trace the historical perspective of Banking Ombudsman

Scheme.

To highlight the functional aspect of Banking Ombudsman Scheme

and

To bring forth the performance of Banking Ombudsman Scheme in

terms of quantum of complaints handled and time taken for

redressal in all scheduled commercial banks

To study the performance of Banking Ombudsman in terms of

quantum of complaints handled and time taken for redressal in

AXIS Bank.

1.5. Research Methodology:

The present study is based on secondary data. The secondary data were

collected from articles, previous studies, committee reports, Indian Banks

Association Bulletin (IBI) bulletins, RBI India website and from data

relating to the banks. The present study is confined to three years i.e.,from 2007-2008, 2008-2009 and 2009-2010.


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Tools applied for Data Analysis:

Trend Analysis is used to find out the increase/decrease from the previous

year Karl Pearsons co-efficient of Correlation is used to find out the

relationship between the number of complaints handled and number of

cases disposed in scheduled commercial banks on the whole and

particularly at AXIS Bank.

1.6. Limitations and scope of the study:

1. The study is confined to the period of three years.

2. Only complaints arrived and redressed in the overall commercial

banking sector and one New Private Sector bank namely, AXIS bank is

taken for the study.

3. The trend percentage and correlation alone is found out to know the

performance of Ombudsman


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1.7. Chapter Scheme

CHAPTER 1 deals with the Introduction, characteristics of Banking

Ombudsman, Objectives, methodology, scope and limitations of the

study.

CHAPTER 2 explores on the basic concepts of banking Ombudsman

Scheme.

CHAPTER 3 discusses about the Case studies of banking Ombudsman

Scheme

CHAPTER 4studies about the Profile of AXIS Bank.

CHAPTER 5 analyses the performance of Banking Ombudsman in

Indian banking Sector

CHAPTER 6 analyses the performance of Banking Ombudsman in

Axis bank

CHAPTER 7offers a summary of findings and suggestions.


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CHAPTER II

BANKING OMBUDSMAN SCHEME

The institution of banking offers opportunity for investors and

channelizes the resources available for the growth and sustenance of

trade, commerce and industry, and, hence, an efficient banking system is

necessary for the growth of the national economy. It is necessary that in

such a system checks and balances be introduced to reduce inefficiency

and maladministration. Moreover, the quality of the service of the banks

depends upon the service provided to the customers and same determines

the reputation and growth of the bank. Banking being public utility

services and in view of the deteriorating services rendered to the public

and also having regard to the fact that services so rendered by banks in

irresponsible manner, which are not only inefficient but deficient in

character and in the said stress and strain, the public/customer is put pillar

to post without having any remedy, it felt necessary to have a separate for

a to receive and resolve such grievances. Of course, the Consumer

Protection Act, 1986 or courts, has taken care of it but as of now

consumer forum is hard pressed with the alarming rise in number of

cases.

In the banking sector, so far consumer or customer are concerned, their

grievances are many and varied. Reserve Bank of India (RBI) is flooded

with complaints. They received complaint and forward the complaint to

concerned bank and banks are required to submit comment and confirm

that grievance of the customers stand redressed. Whether it is redressed or

not, paper transactions take place. Banking sector is constantly under


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criticism by press, public and estimate committees. Various committees,

commissions and working group were formed to go into the issue since

1972. Banking Commission was headed by Sri R. G. Saraiya followed by

Sri. R.K. Talwar which made as much as 172 recommendations and

lastly report of the Goiporia Committee is a step further as to the

sustained anxiety of RBI towards improvement of customer services in

banks. Banks have implemented the recommendations to greater extent

still there is no perceptible change in the quality of customer services and

still the deficient areas are palpably visible and the customer remain

dissatisfied. The NarasimhanCommittee on Banking and FinancialSector Reforms examined these critical areas and recommended

introduction of the Banking Ombudsman Scheme 1995 as a part of

Financial Sector Policy and Systems Reforms 1991-92 to 1995-96.

Recommendations are very much significant and certainly, it was a

needed requirement. This is timely in the changing needs of the

customers, in the context of growing liberalization in the banking andfinancial sectors along with the growing awareness amongst customers,

of their rights. On this background RBI has accepted the recommendation

and as a part of banking policy,Dr. C.Rangarajan; Governor, announced

the The Banking Ombudsman Scheme on June 14, 1995. The scheme

was issued under the provision of Banking Regulation Act, 1949, covers

all Scheduled Commercial Banks and the Scheduled Primary Co-operative Banks having business in India. The Scheme has become

operative from June 1995. Initially Ombudsman was appointed on full

time basis in three centers i.e. Mumbai, New Delhi, and Bhopal but

subsequently its base for operation has been expanded. The aim and

objective mechanism of ombudsman is to deliver quick and inexpensive

facility to resolve grievances of customers arising out of deficient

services rendered by the banks. Hence, banking ombudsman is in place to


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cater to public complaints against deficiency in banking services

concerning operation of deposit accounts and loans and advances.

Paradigm Shift of Banking Ombudsman Scheme 1995 to Banking

Ombudsman Scheme of 2006; the attempt over years has been to extend

the scope and jurisdiction of the Banking ombudsman to hitherto

uncovered areas.

This has been done in two ways:

1.Coverage of banks: under the 1995 Scheme, only commercial banks

and Scheduled Primary Co-operative Banks, having a place of business

in India, were covered. Then 2002 Scheme broadened the operation of the

ombudsman by including within the definition of bank such entities as

Regional Rural Banks, State Bank of India, and subsidiary bank as

defined in Part I of the Banking Regulation Act, 1949. Even the

Scheduled Commercial banks are covered under the latest scheme of2006.

2. Entertainment of Complaints: the Ombudsman Scheme lays down

the grounds on which complaints can be entertained by the Ombudsman.

The trend over the year has been to extend the jurisdiction of

ombudsman. The RBI has expanded the scope of the bankingombudsman to include customer complaints relating to credit cards,

deficiencies on the part of sales agents of banks to provide promised

services, levying service charges without prior notice to the customer and

non-adherence to the fair practices code as adopted by individual banks.

In order to make the scheme more effective, the RBI has decided to take

the onus of recruitment and funding of the scheme. It has also allowed


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complainants to file their complaints online and appeal to it against the

judgments given by the banking ombudsman.

The Banking Ombudsman Scheme, 1995 was notified by RBI on June 14,

1995 in terms of the powers conferred on the Bank by Section 35A of the

Banking Regulation Act, 1949 (10 of 1949) to provide for a system of

redressal of grievances against banks. The Scheme sought to establish a

system of expeditious and in expensive resolution of customer

complaints. The Scheme which is in operation since 1995 has been

revised during the year 2002 and 2006. The Scheme is being execute and

administered by Banking Ombudsmen appointed by RBI at 15 centers

covering the entire country.

Banking Ombudsman Scheme, 2006

Scope of the Scheme.

In 2006, the Reserve Bank of India announced the revised Banking

Ombudsman Scheme with enlarged scope that included customer

complaints on certain new areas, such as, credit card complaints,

deficiencies in providing the promised services even by banks' sales

agents, levying service charges without prior notice to the customer and

non adherence to the fair practices code as adopted by individual banks.

Vision of banking Ombudsman Scheme

To be a visible and credible system of dispute resolution

mechanism for common persons utilizing banking services.


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Goals of banking Ombudsman Scheme

To ensure redressal of grievances of users of banking services in an

inexpensive, expeditious and fair manner that will provide impetusto improved customer services in the banking sector on a

continuous basis.

To provide feedback/suggestions to Reserve Bank of India towards

framing appropriate and timely guidelines to banks to improve the

level of customer service and to strengthen their internal grievance

redressal systems

To enhance the awareness of the Banking Ombudsman Scheme.

To facilitate quick and fair (non-discriminatory) redressal of

grievances through use of IT systems, comprehensive and easily

accessible database and enhanced capabilities of staff through

training.

APPOINTMENT AND TENURE OF BANK OMBUDSMAN

Under the 2006 Scheme, it is stipulated that the RBI may appoint one or

more officers in the rank of Chief General Manager or Manager to be

known as Banking Ombudsman to carry out the functions entrusted to

them by or under the scheme. This appointment is made for the period not

exceeding three years. For effective implementation of this scheme

Reserve Bank of India has set up fifteen Bank ombudsman offices across

the country.

Application of the Scheme.

The scheme is applicable to all commercial banks, regional rural banks

and scheduled primary cooperative banks having business in India.


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Funding

Unlike the old scheme, the revised Banking Ombudsman Scheme is fullystaffed and funded by the Reserve Bank instead of the banks.

Filing complaints.

Under the revised Banking Ombudsman Scheme, the complainants can

file their complaints in any form, including online.

GROUNDS OF COMPLAINT

1. A complaint on any one of the following grounds alleging

deficiency in banking service may be filed with the Banking

Ombudsman having the jurisdiction:

1. non-payment/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-issue of drafts to customers and others;

4. non-adherence to prescribed working hours by branches;

5. failure to honor guarantee/letter of credit commitments by

banks;

6. claims in respect of unauthorised or fraudulent withdrawals

from deposit accounts, or fraudulent encashment of a

cheques or a bank draft etc.,

7. complaints pertaining to the operations in any savings,

current or any other account maintained with a bank, such as


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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.

8. complaints from exporters in India such as delays in receipt

of export proceeds, handling of export bills, collection of

bills etc., provided the said complaints pertain to the bank's

operations in India;

9. Complaints from Non-Resident Indians having accounts in

India in relation to their remittances from abroad, deposits

and other bank-related matters.

10.Complaints pertaining to refusal to open deposit accounts

without any valid reason for refusal and

11.Any other matter relating to the violation of the directives

issued by the Reserve Bank in relation to banking service.

PROCEDURE OF FILING COMPLAINT

1. Any person who has a grievance against a bank relating to the

banking services as enumerated under Clause 12 of the Scheme,

may himself or through his authorized representative make a

complaint to the Banking Ombudsman within whose jurisdiction

the branch or office of the bank complained against is located.2. The complaint shall be in writing duly signed by the

complainant or his authorised representative (other than an

advocate) in a form specified in Annexure-A of the Scheme and

shall state clearly the name and address of the complainant, the

name and address of the branch or office of the bank against

which the complaint is made, the facts giving rise to the

complaint supported by documents, if any, that are desired to be


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relied upon by the complainant, the nature and extent of the loss

caused to the complainant, the relief sought from the Banking

Ombudsman and a declaration about the compliance of the

conditions referred to in sub-clause (3) of this clause.

3.No complaint to the Banking Ombudsman shall lie unless:-

(a) the complainant had before making a complaint to the

Banking Ombudsman made a written representation to the bank

named in the complaint and either the bank had rejected the

complaint or the complainant had not received any reply within a

period of one month after the bank concerned received his

representation or the complainant is not satisfied with the reply

given to him by the bank.

(b) the complaint is made not later than one year after the cause

of action has arisen as per clause (a) above;

(c) the complaint is not in respect of the same subject matter

which was settled through the Office of the Banking

Ombudsman in any previous proceedings whether or not

received from the same complainant or along with any one or

more complainants or any one or more of the parties concerned

with the subject matter;

(d) the complaint does not pertain to the same subject matter, for

which any proceedings before any court, tribunal or arbitrator or

any other forum is pending or a decree or Award or a final order

has already been passed by any such competent court, tribunal,

arbitrator or forum; and

(e) the complaint is not frivolous or vexatious in nature.


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REJECTION OF COMPLAINT

The Banking Ombudsman may reject a complaint at any stage if it

appears to him that a complaint made to him is: i) frivolous, vexatious,

mala fide or without any sufficient cause or ii) that it is not pursued by

the complainant with reasonable diligence or iii) in the opinion of

Banking Ombudsman there is no loss or damage or inconvenience caused

to the complainant or iv) beyond the pecuniary jurisdiction of Banking

Ombudsman or v) in the opinion of the Banking

Ombudsman the complicated nature of the complaint requires

consideration of elaborate documentary and oral evidence and the

proceedings before him are not appropriate for adjudication of such

complaint.

SETTLEMENT OF DISPUTES

On the receipt of a complaint, the first objective of the ombudsman is to

promote a settlement of the complaint by agreement between the

complainant and the bank through conciliation or mediation. If the

complaint is not settled by agreement within a period of one month fromthe date of the receipt of the complaint, the Ombudsman shall pass an

award after giving the reasonable opportunity to the parties for presenting

their case. In passing the award, the ombudsman shall be guided by the

documentary evidence placed before him by the parties, the principle of

banking law and practice, directions issued by the

RBI etc.


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The award passed shall contain the direction/s, if any, to the bank for

specific performance of its obligations and in addition to or otherwise, the

amount, if any, to be paid by the bank to the complainant by way of

compensation for any loss suffered by the complainant, arising directly

out of the act or omission of the bank.

After an award is passed, its copy is sent to the complainant and the bank

named in the complaint. It is open to the complainant to accept the award

in full and final settlement of his complaint or to reject it. If the award is

acceptable to the complainant, he is required to send to the bank

concerned, a letter of acceptance of the award in full and final settlement

of his complaint, within a period of 15 days from the date of receipt of the

copy of the award by him.

The Banking Ombudsman shall not have the power to pass an award

directing payment of an amount which is more than the actual loss

suffered by the complainant as a direct consequence of the act ofomission or commission of the bank, or ten lakh rupees whichever is

lower. However, in the case of complaints, arising out of credit card

operations, the Banking Ombudsman may also award compensation not

exceeding Rs. 1 lakh to the complainant, taking into account the loss of

the complainant's time, expenses incurred by the complainant, harassment

and mental anguish suffered by the complainant.

APPEAL BEFORE THE APPELLATE AUTHORITY AND

REVIEW OF THE AWARD

The 1995 scheme had no provision for the review of the ombudsmans

award. However, under the 2002 scheme, a Review Authority was

established. The appellate authority is the Deputy Governor in the

Reserve Bank of India. Either party aggrieved by the award may, within


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45 days of the date of receipt of the award, appeal against the award

before the appellate authority. The appellate authority may, if he is

satisfied that the applicant had sufficient cause for notmaking an

application for appeal within time, also allow a further period not

exceeding 30 days. The Appellate Authority , after giving the parties a

reasonable opportunity of being heard may i) dismiss the appeal; or ii)

allow the appeal and set aside the award; or iii) send the matter to the

Banking Ombudsman for fresh disposal in accordance with such

directions as the appellate authority may consider necessary or proper; or

iv) modify the award and pass such directions as maybe necessary to give

effect to the modified award; or v) pass any other order as it may deem

fit.

AWARENESS OF THE SCHEME

For greater awareness of the scheme it is now mandatory for the banks to

ensure that the purpose of the scheme and the contact details of the

Banking Ombudsman to whom the complaints are to be made by the

aggrieved party should be displayed prominently in all the offices and

branches of the bank in such a manner that a person visiting the office or

branch has adequate information of the


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CHAPTER III

CASE STUDIES IN BANKING

COMPLAINTS AND REDRESSAL

The AGM, State Bank of India, Pondicherry & Ors V/s N.Ganesan

The complainants son remitted an amount on 5.04.1997 from abroad to

be credited to his NRI account with appellant bank. The remittance

was not confirmed till 22.04. 1997. Appellant bank pleaded that non-

confirmation was due to failure of computers. The issue is whether this

belay on the part of the bank amounted to deficiency in service. The

Commission in appeal observed that bank officials could have verified

vouchers and cheques received by post or confirmation and could have

given correct reply within a reasonable time. It was held that failure of the

bank to confirm remittance received from outside country within a

reasonable period amounts to deficiency in service.

J. Shah Corporation Bank & Anr V/s Navin

Respondent, who is an exporter under discounting agreement entrusted

documents relating to export and bills of exchange with appellant

bank to negotiate the same through a foreign bank.

Respondents allegation is that the bank had failed to collect money in

foreign currency indicated in documents but instead collected in local

currency, hence there was deficiency in service on the part of the

appellant bank and hence a claim for damages was made. In appeal, the

Commission held that there was no deficiency of service on the part of

the bank as the appellant bank, acting for an on behalf of the respondent,had negotiated the documents as provided under agreement. However the


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conversion of local currency in U.S. $ became difficult on account of

policy of Sudan Government. It was observed that all that was required to

be done under terms of the agreement and under contract had been done

by the two banks.

Anthony C. Vaz V/s M/s Himachal Futuristic Communication Ltd &

AnrDividend warrants were issued by respondent No.1 and were sought

to be encased by respondent No.2, Banker at Panaji. The appellant filed

a complaint before the District Forum as the warrants were returned

unpaid with the remarks No advice despite a letter dispatched to themby Industrial Financial Branch of SBI, Chandigarh. Respondent No.2

took the defense that they cannot honor dividend warrants unless they

received intimation from local Head Office at Mumbai. The State

Commission however held that refusal to clear the dividend warrant was

deficiency in service as question of respondent No.2 having no authority

to honor the warrants could not arise in view of the letter from IndustrialFinancial Branch of SBI, Chandigarh. Respondent No. 2 and Respondent

No. 1 were held to be jointly liable

Brijesh Kumar & A.R.Lakshmanan Vs. Canara Bank & anr

The Bank charging, unilaterally without prior information or consent of

the Bank Customer, for providing their services by supply of MICRCheque. Consumer Forum and State Commission held it as deficiency of

service but National Commission held that it was related to pricing and

not in jurisdiction of the Consumer Fora to decide. The Supreme Court

held that the charge by bank for issuance of MICR cheques is not against

the directives of the Reserve Bank of India. The questions of it being

unilateral or with the consent of each customer do not arise.


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India Export Corporation & ors Vs. Chairman-cum-MD, Syndicate

Bank&Bors

The complainant withdrew overdraft facility sanctioned to him by the

bank only after availing facility to the extent of Rs.1,20,000/-. The

facility was availed by the complainant for business purpose. It was held

that where complaint alleging banking service deficiency was found

connected with commercial purpose, the consumer complaint would not

be maintainable.

Col. D.S.Sachar Vs. Zonal Manager, Punjab & Sind Bank,

Cahndigarh & anr Cashwas snatched from the hands of the

complainant/appellant at the gate of the respondent bank. The appellant

alleges that the absence of security on the gate and the non-provision of

steps like siren/alarm system etc. amounts to deficiency in service on the

part of the respondent bank. The State Commission held that the non-provision of security on the gate of the bank on the date of occurrence

viz. snatching of cash in bank premises cannot be held to be amounting to

deficiency in service hired by compel

Ratanchand Morarkar Vs. Bank of Maharashtra

The complainant had deposited amount for issue of pay order in favor ofa particular firm. However, the said pay order was cancelled by the bank

and was issued in favor of another party. It was held that when the bank

has acted in good faith in cancellation of bank pay order and issuance

of fresh pay order in favour of another party on the request made by

Manager of the complainant firm, there would be no deficiency in

service.


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Manohar Singh Chouhan & Ors Vs. Central Bank of India

The complainants have purchased a tractor after taking loan from the

respondent bank. The respondent bank did not remit the premium amount

to the insurance company with which the complainants have insured their

tractor as a result of which the suffered when the tractor met

within accident could not be recovered from the Insurance Company.

The issue for consideration is whether non-payment of premium amount

by the bank amounted to deficiency in service. It was held that when hire

purchase agreement between the bank and buyer of vehicle with the help

of bank loan did not contain a condition creating obligation on the part of

the bank to remit premium for insurance policy, complainant buyer of

vehicle could not hold bank guilty of deficiency in service.

Balla Rama Rao v. Banking Ombudsman, 2003. A house in the nameof B. Narayanama was given on lease to the bank in 1982.Subsequently,

the lady died. The Bank did not pay rent from June 1992 to Feb.

1997.Balla Ramarao, the appellant approached the bank. Bank

immediately paid the amounts. 3, 09,562. Balla contended that the

interest should also be paid for the period of 1992to 1997. The bank

refused to pay interest. The appellant approached to the banking

ombudsman. But he rejected the complaint, holding no merit in the case

as it was outside the jurisdiction of the banking ombudsman. Balla

approached to the Andhra Pradesh high court. The high court rejected the

appeal, finding that it was outside the jurisdiction of the banking

ombudsman.


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M/s.Anand Lubricating & Pneumatic Systems Ltd. Vs. State Bank of

India The bank was alleged to have failed to issue bank guarantee despite

sufficient security and the complainant suffered financial loss. It was

held that the non-issuance of bank guarantee despite security deposit with

the bank would amount to deficiency in service and the complainant

would be entitled to interest on that security amount.


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CHAPTER IV

PROFILE OF AXIS BANK

Axis Bank is the third largest private sector bank in India. Axis Bank

offers the entire spectrum of services to customer segments covering

Large and Mid-Corporate, SME, Agriculture and Retail Businesses.

With its 1446 branches (including extension counters) and 7,594 ATMs

across the country, as on 30th September 2011, the network of Axis Bank

spreads across 953 cities and towns, enabling the Bank to reach out to a

large cross-section of customers with an array of products and services.

The Bank also has overseas offices in Singapore, Hong Kong, Shanghai,

Colombo, Dubai and Abu Dhabi.

The Bank's websitewww.axisbank.comoffers comprehensive details

about its products and services. For further information please contact

Mr. V Srinivasan, Executive Director (Corporate Banking) Axis

Bank said at the Awards ceremony, Despite a difficult economic

landscape, India is amongst the fastest growing economies of the world.

Infrastructure sector has remained one of the key drivers of economic

growth. The D&B Axis Bank Infra Awards 2011 is our attempt to

recognize the illustrious projects and honor corporate who have been

leading infrastructure development in the country.

He went on to add, The XIth five year plan estimates 43% of total debt

requirement (Rs. 4.20 lakh cores) in infrastructure financing to be raised

from banks. We see huge growth potential in the sector. Axis Bank has

been one of the leading arrangers of the infrastructure finance and we

would continue to partner in the sectors growth.
http://www.axisbank.com/http://www.axisbank.com/http://www.axisbank.com/http://www.axisbank.com/


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History of axis bank

Axis Bank was formed as UTI when it was incorporated in 1994 when

Government of India allowed private players in the banking sector. The

bank was sponsored together by the administrator of the specified

undertaking of the Unit Trust of India, Life Insurance Corporation of

India (LIC) and General Insurance Corporation ltd. and its subsidiaries

namely National insurance company ltd., the New India Assurance

Company, the Oriental Insurance Corporation and United Insurance

Company Ltd. However, the name of UTI was changed because of the

disagreement on terms and conditions of the bank authority over certain

stipulations including royalty charged over the name from UTI AMC.

The bank also wanted to have a new name from its pan-Indian as well as

international business perspective. So from July 30, 2007 onwards the

UTI bank was named as Axis Bank.

AXIS Bank is one of the fastest growing banks in private sector. The

Bank operates in four segments, namely treasury, retail banking,

corporate/ wholesale banking and other banking business. The treasury

operations include investments in sovereign and corporate debt, equity

and mutual funds, trading operations, derivative trading and foreign

exchange operations on the account, and for customers and central

funding. Retail banking includes lending to individuals/ small businesses

subject to the orientation, product and granularity criterion. It also

includes liability products, card services, Internet banking, automated

teller machines (ATM) services, depository, financial advisory services,

and nonresident Indian (NRI) services. The corporate/ wholesale banking

segment includes corporate relationships not included under retail


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banking, corporate advisory services, placements and syndication,

management of publics issue, project appraisals, capital market related

services, and cash management services. The Bank's registered office is

located at Ahmedabed and their Central Office is located at Mumbai. The

Bank has a very wide network of more than 1042 branches (including 56

Service Branches/ CPCs as on June 30, 2010). The Bank has a network of

over 4,474 ATMs providing 24 hrs a day banking convenience to their

customers. This is one of the largest ATM networks in the country. The

Bank has five wholly-owned subsidiaries namely Axis Securities and

Sales Ltd, Axis Private Equity Ltd, Axis Trustee Services Ltd, Axis Asset

Management Company Ltd and Axis Mutual Fund Trustee Ltd.

Axis Bank was incorporated in the year 1993 with the name UTI

Bank Ltd. The Bank was the first private banks to have begun operations

after the Government of India allowed new private banks to be

established. The Bank was promoted jointly by the Administrator of the

specified undertaking of the Unit Trust of India (UTI - I), Life InsuranceCorporation of India (LIC) and General Insurance Corporation of India

(GIC) and other four PSU insurance companies, i.e. National Insurance

Company Ltd, The New India Assurance Company Ltd, The Oriental

Insurance Company Ltd and United India Insurance Company Ltd. In the

year 2001, the bank along with Global Trust Bank (GTB) had a merger

proposal to create the largest private sector bank, but due to media'sissues both the banks withdraw the merger proposal. In the year 2003, the

Bank was given the authorized to handle Government transactions such

as collection of Government taxes, to handle the expenditure related

payments of Central Government Ministries and Departments and

pension payments on behalf of Civil and Non-civil Ministries such as

defense, posts, telecom and railways. In December 20003, the Bank

launched their merchant acquiring business. In the year 2005, the Bank


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raised $239.3 million through Global Depositary Receipts. They won the

award 'Outstanding Achievement Award' for the year 2005 from Indian

Banks Association for IT Infrastructure, delivery capabilities and

innovative solutions. In December 2005, the Bank set up Axis Securities

and Sales Ltd (originally incorporated as UBL Sales Ltd) to market credit

cards and retail asset products. In October 2006, they set up Axis Private

Equity Ltd, primarily to carry on the activities of managing equity

investments and provide venture capital support to businesses. In the year

of 2007, the bank again raised $218.67 million through Global

Depository Receipts. They opened 153 new branches during the year,

which includes 43 extension counters that have been upgraded to

branches and 8 Service branches/ CPCs. They also opened new overseas

offices at Singapore, Dubai and Hong Kong and a representative office in

Shanghai. During the year 2007-08, the Bank opened 143 new branches,

taking the number of branches to 651 which included 33 extensions

Counters that have been upgraded to branches. Also, they expandedoverseas with the opening of a branch at the Dubai International Finance

Centre. The Bank changed their name from UTI Bank Ltd to Axis Bank

Ltd with effect from July 30, 2007 to avoid confusion with other

unrelated entities with similar name. During the year 2008-09, the Bank

opened 176 new branches that include 12 extension counters that have

been upgraded to branches taking the total number of branches and ECsto 835. During the year, they opened 831 ATMs, thereby taking the ATM

network of the Bank from 2,764 to 3,595. Also, they opened a

Representative Office in Dubai. In May 2008, the Bank established Axis

Trustee Services Company Ltd as a wholly owned subsidiary company,

which is engaged in trusteeship activities. In December 2008, they

launched their new investment advisory service exclusively for High Net

Worth clients. In January 2009, the Bank set up Axis Asset Management


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Company Ltd to carry on the activities of managing a mutual fund

business. Also, they incorporated Axis Mutual Fund Trustee Ltd to act as

the trustee for the mutual fund business. During the year 2009-10, the

Bank opened 200 branches taking the total number of branches Extension

Counters (ECs) to 1,035. In March 2 09, 2010, they opened their 1000

branch at Bandar West, Mumbai. In September 2009, Axis Bank

launched the private banking business in the domestic market, christened

'Privee' to cater to highly affluent individuals and families offering them

unique investment opportunities During the year, the Capital Markets

SBU was restructured with the debt capital market business (hitherto a

part of the capital markets) carved into a separate vertical. As a result, the

Bank's Capital Markets SBU comprises equity capital markets (ECM)

business, mergers and acquisitions and private equity syndication. In

February 24, 2010, the Bank launched the 'AXIS CALL & PAY on atom',

a unique mobile payments solution using Axis Bank debit cards. Axis

Bank is the first bank in the country to provide a secure debit card-basedpayment service over IVR.

Services

Accounts

Easy Access Savings Account

Prime Savings account

Salary Savings Account

Power salute: A salute to the defence forces

Azaadi

Senior Privilege Savings Account


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For the woman of today Smart Privilege Savings Account

A complete banking solution for Trusts, Associations, Societies,

Government Bodies, Section 25 companies and NGOs

Pension Savings Bank Account,

Deposits

Fixed Deposits

Recurring Deposits

Encash 24

Tax Saver Fixed Deposit

Loans

Welcome to the wide range of Axis Bank's Loan products. Put an end to

your financial troubles.

Power Homes

Power Drive

Personal Power

Study Power

Asset Power

Two Wheeler Loan

Loan against Security

Consumer Power


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Cards Apart from Gold & Silver credit cards, Axis Bank provides

Axis Bank Meal Card Axis Bank Gift Card

LIC co-branded Annuity Card

Capital Markets

Debt Solutions

Equity Solutions

Private Equity, Mergers & Acquisitions

Advisory Services Trusteeship Services

Depository Services

Capital Market Funding

e-Broking

Credit Working Capital Finance

Term Loans

Trade Services and Trade Finance

Structured Finance

Supply Chain Management

Overseas Financing and Transactions SME Standard Products

Power Trace


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Axis bank performance

As on the year ended March 31, 2010 the Bank had a net profit of

Rs 2514.53crores

The bank now has 1035 branches including extension networks

across 30 States and 4Union Territories.

The bank also has overseas offices in Singapore, China, Hong

Kong and Dubai.

Crosses the 4,293 ATM mark in Mar 2010

Launches Platinum Credit Card, India's first EMV chip based card

Axis Bank share is now trading at Rs 1359.00 (18thAug2010).

AXIS Bank Customer Care Grievance Redressal Complaint

Management Team:

Generally, most of the requests, queries, information, complaints (If, any)

are sorted out by Axis Banks multi-layered customer care system. But

there are times when High Networth Clients (HNIs as they are called),

Large Corporate Clients who conduct many thousand transactions of

various nature within a span of single day, have unresolved issues ofComplex Nature.

In order to provide a forum that can effectively address such issues, Axis

Bank has a dedicated team called complaints Management Team. Under

such situations, you can escalate your complaint to the Complaints

Management Team, at Central Office by mailing to

[email protected].
mailto:[email protected]:[email protected]:[email protected]


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After examining the matter, the complaints management team will send

you its final response within a period of 8 working days from the date of

receipt of your complaint by them. In case the resolution is likely to take

longer time, the Axis Bank Customer Cares Complaints Management

Team will inform you of the same through an interim reply.

If the resolution still does not meet your expectations, you can get in

touch with the Nodal Officer Grievance Redressal at the below

provided address.

AVP (RBO) and Nodal OfficerGrievance Redressal, Axis Bank Ltd

Central Office, RBO Department, 3rd Floor, RNA Corporate Park

Kalanagar, Bandra (East), Mumbai400051.

E Mail [email protected]

After thoroughly studying the matter, the designated Nodal Officer will

send you the final response within a period of 8 working days from the

date of receipt of your complaint at his end. In case the resolution is

likely to take longer time, the Nodal Officer will inform you of the same

through an interim reply.

Within 30 days of lodging a complaint with the Nodal Officer, if you still

do not get a satisfactory response from him, and you wish to pursue otheravenues for redressal of grievances, you may approach Banking

Ombudsman appointed by Reserve Bank of India under Banking

Ombudsman Scheme.


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CHAPTER V

DATA AND INTERPRETATION- PERFORMANCE OF

BANKING OMBUDSMAN IN INDIAN BANKING

SECTOR

Table 5.1.

Received complaints

Period No. of BOoffices

No. ofcomplaintsreceivedduring theyear

Rate ofincrease(%over previousyear)

Average no.of complaintsreceived perBO offices

Rate ofinterest

2007-2008 15 47887 24 3192 23.9

2008-2009 15 69117 44 4608 14.67

2009-2010 15 79266 15 5284 44.36

EXHIBIT 5.1

The numbers of complaints received in 2009-2010 were 79266 ascompared to the year of 2009-2009 with 69117 complaints and 47887complaints in 2007-2008 respectly. The average number complaintsreceived per BO offices increase simultaneously with number of

complaints received.

4788769117

79266

0

20000

40000

60000

80000

100000

2007-2008 2008-2009 2009-2010

Recived complaints


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Table 5.2

BO office wise receipt of complaints

BO office No of complaints

received during

%

increase in2008-2009

%

increase in2009-2010

% to

totalcomplaints 2007-2008

% to

totalcomplaints2008-2009

% to

totalcomplaints2009-2010

2007-2008

2008-2009

2009-2010

Ahmedabed 2855 3732 4149 31 11 5.9 5.4 5.2

Bangalore 2975 3255 3854 9 18 6.2 4.7 4.9

Bhopal 3402 3375 3873 - 15 7.1 4.9 4.9

Bhubaneswar 998 1159 1219 16 5 2.1 1.7 1.5

Chandigarh 2331 2634 3234 13 23 4.9 3.8 4.1Chennai 4545 1038

112727

128 23 9.5 6.5 16.1

Guwahati 282 455 528 61 16 5.9 0.7 0.7

Hyderabad 2843 3961 5622 39 42 5.9 5.7 7.1

Jaipur 3369 3688 4560 9 24 7.1 5.3 5.8

Kanpur 5340 7776 7832 46 1 11.2 11.3 9.9

Kolkata 2815 3671 5326 30 45 5.8 5.3 6.7

Mumbai 6070 9631 1005

8

59 5 12.7 13.9 12.7

New Delhi 6742 10473

12045

55 15 14.1 15.2 15.2

Patna 1480 2110 1707 30 - 3.1 3.1 2.2

Thiruvananthapuram

1840 2816 2532 53 - 3.8 4.1 3.2

Total 47887

69117

79266

From the above table, it can be inferred that in the year 2007-2008, NewDelhi BO offices has the highest complaints received of 6742, followed

by Mumbai with 6070 complaints and Kanpur with 5340 complaints. Inthe year, 2008-2009, New Delhi with 10473, followed by Chennai with10381and Mumbai with 9631 and Kanpur with 7776 complaints. In theyear 2009-2010, Chennai had highest complaints of 12727 followed by

New Delhi with 12045 and Mumbai with 10058. Throughout the 3 yearsperiod of the study, Bhubaneswar BO offices had received least amountof complaints.


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Table 5.3

Region - wise receipt of complaints at the BO offices

EXHIBT 5.3

From the above table it can be inferred that there was an increasecomplaints received year to year from 2007-2008 to 2009-10. The highestnumber of complaints received in 2009-10 was from metropolitan citiesfollowed by Rural areas, Urban and Semi- Urban areas. As far as

percentage of increase in the complaints with respect to the previousyears concerned, rural had the highest percentage of complaints.

32%

14%20%

34%

Region - wise receipt of complaints at the BOoffices

rural

semi urban

urban

metroplitan

Region No ofcomplaintsreceivedduring 2007-2008

No ofcomplaintsreceivedduring 2008-2009

No ofcomplaintsreceivedduring 2009-2010

% increase in2008-2009

%increasein 2009-2010

Rural 8418 13915 25055 65 80

Semi urban 6641 9817 10741 48 9

Urban 10978 15723 16423 43 5

Metropolitan 21855 29662 27047 36 -9Total 47887 69117


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Table 5.4

Category- wise receipt of complaints at the BO offices

Mode NO. ofcomplaintsreceived during2007-2008

No. ofcomplaintsreceived during2008-2009

No. ofcomplaintsreceived during2009-2010

No. % No. % No. %

Email 7183 15% 15927 23% 9221 12%

Online 7662 16% 9352 14% 11400 14%

Letter, post-card, fax, etc.

33042 69% 43838 63% 58645 74%

Total 47887 100 69117 100 79266 100

EXHIBIT 5.4

Since 46% of the complaints are received from the rural (32%) and semiurban (14%) areas, the receipt of complaints through the postal mode hasincreased from 63%to 74% during the current year, indicating that theless access to internet facilities in the rural/semi urban areas as comparedto the urban and metro. Email complaints have decreased from 23%to12% of the total complaints during the year 2009-2010.

12% 14%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Eamil on line letter, post-card, fax,

Category- wise receipt of complaints at the BOofficescomplaints


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Table 5.5

Bankgroup wise receipt of complaints

Bank group 2007-2008 2008-2009 2009-2010 Cumulativetotal of lastfive years

Nationalizedbank

12033 14974 19092 46099

(26%) (22%) (25%) (24%)SBI group 13532 18167 22832 54531

(29%) (27%) (30%) (29%)

Private sectorbank

14077 21982 22553 58612

(29%) (32%) (29%) (31%)

Foreignbank

6126 11700 11450 29276

(13%) (17%) (15%) (15%)

Scheduledprimary co-op. bank

295 302 183 780

(1%) (1%) (-) (-)

RRBs 826 846 785 2457

(2%) (1%) (1%) (1%)

Subtotal 46889 67971 76895 191755

(100%) (100%) (100%) (100%)

others 998 1146 2371 4515

Total 47887 69117 79266 196270


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EXHIBIT5.5

It is evident from the cumulative total of last five years of bank group-wise complaints, the highest number of complaints are from Privatesector banks (31%) followed by SBI group( 29%), Nationalised Banks

(24%) and Foreign banks(15%).

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

nationalised

bank

sbi group private sector

bank

foreign bank

Bank-group wise receipt of complaints for thecumulative last 3 years


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Table 5.6

Category wise receipt of complaints

Nature of complaints Complaints receivedduring

% to aggregatecomplaints

2007-2008 2008-2009 2009-2010 2007-2008 2008-2009 2009-2010

Deposit accounts 5612 6706 3681 11.7 9.7 4.7

Remittances 5213 5335 5708 10.9 7.7 7.2

Credit cards 10129 17648 18810 21.2 25.5 23.7

Loans and advances 6054 8174 6612 12.7 11.8 8.3

Charges withoutnotice

3740 4794 4764 7.8 6.9 6

Pension 1582 2916 4831 3.3 4.2 6.1

Failure to meetcommitments 6388 11824 11569 13.3 17.2 14.6

DSAs and recoveryagents

3128 3018 1609 6.5 4.4 2

Notes and coins 141 113 158 .3 .2 0.2

Others 5900 8589 18840 12.3 12.4 23.8

Out of subject - - 2684 - - 3.4

Total 47887 69117 79266 100 100 100


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EXHIBIT 5.6

1. In the category wise receive of complaints, Credit card service

received more complaints during the year 2009-2010 with 18810complaints as compared to the year of 2008-2009 with 17648complaints and 10129 complaints in 2009-2010. The low numberof complaints receives in notes and coins in during the year.

05000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Depositaccounts

Creditcards

Chargeswithout

notice

Failuretomeet

commitments

Notesandcoins

category wise receipt of complaints


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Table5.7

Disposal of complaints of BO offices

EXHIBIT 5.7

Banking ombudsman offices disposed of 94% (83336) of the 88699complaints received during the year 2009-2010, as against disposal of87% of the complaints received during previous year2008-2009,

indicating the promptness in disposal of cases at all the BO offices.

0%

10%20%

30%

40%

50%

60%

70%

80%

90%

100%

2007-2008 2008-2009 2009-2010

Disposal of complaints of BO offices

Complaints disposed of

during the year

Complaints carried

forward to next year

Particulars 2007-2008 2008-2009 2009-2010

Complaints received during the yearincluding complaints brought forward from

previous year

54992 75009 88699

Complaints disposed of during theyear

No. 49100 65576 83336

% 89 87 94

Complaints carried forward to nextyear

No. 5892 9433 5363% 11 13 6


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Table 5.8

Mode of disposal of complaints

Particulars 2007-2008 2008-2009 2009-2010Complaintsdisposed duringthe year

49100 65576 83336

No. of complaintsdisposed bymutual settlementor by issue ofawards

29295 22388 31489

(60%) (34%) (38%)

No. of complaintsnotadmitted/rejecteddue to variousreasons

19735 43115 51847

(40%) (66%) (62%)

EXHIBIT 5.8

The above table shows Mode of disposal of complaints. Around 38%(31489) of the complaints dealt with have been settled by way of mutualsettlement or by issue of awards while 62% (51847) of the complaintshave been disposed off (rejected) during 2009-2010.

0%

10%

20%

30%

40%

50%

60%

70%

2007-2008 2008-2009 2009-2010

Mode of disposal of complaints

mutual settlement

complaints not admitted


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Table 5.9.

Disposal of maintainable complaint

Sr.no

year No. ofcomplaintsdisposedof

Disposal byaward

Disposal bysettlement

1 2007-2008 29365No % No %

70 0.24 29295 99.76

2 2008-2009 22461 73 0.34 22388 99.68

3 2009-2010 31489 211 0.67 31278 99.33

EXHIBIT5.9

As many as 31489 complaints were settled by mutual agreement duringthe year 2009-2010 as compared to mutual settlement of 22388complaints during the previous year. BO offices issued 211 awardsduring the year 2009-2010 as compared to 73 awards issued during the

previous year of 2008-2009. Lesser number of awards issued by the BOsmay be attributed to the banks attempt to resolve the complaints beforeissue of awards, since receipt of awards is considered as un-desirable.

70 73

211

0

50

100

150

200

250

2007-2008 2008-2009 2009-2010

complaints of disposal of awards


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Table 5.10

Rejected complaints

Reason Complaints rejected during

2007-2008 % 2008-2009

% 2009-2010 %

First resort complaints 7950 40 18187 42 16163 31

Time brand complaints 260 1 510 1 642 1

Complaints pending in otherforum

476 2 707 2 948 2

Complaints dealt earlier 333 2 804 2 1357 3

Frivolous complaints 137 1 194 1 132 -

Incomplete address etc 434 2 3019 7 6337 12

Complaints withoutsufficient cause

3249 16 4764 11 6301 12

Not pursued by thecomplaints

703 4 806 2 626 1

Complicated , requiringelaborate evidence

478 2 512 1 2514 5

No loss to the complaints 547 3 143 0 511 1

Complaints outside thescheme

3673 19 10771 25 12006 23

Bank branches outside BOjurisdiction 1492 8 2698 6 4310 9

Tot al 19735 100

43115 100

51847 100


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EXHIBIT 5.10

Although as much as 51847 complaints were shown as rejected duringthe year. The scheme could provide relief to the complaints to a large

extent by way of reversal of bank charges, overdue of bank chargeoverdue interest, over limit charge, partial settlement/writ off of overdue,etc

0 5000 10000 15000 20000

First resort complaints

Complaints pending in other

Frivolous complaints

Complaints without sufficient

Complicated , requiring

Complaints outside the scheme

Rejection of Complaints

2009-2010

2008-2009

2007-2008


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Table 5.11

Pending position of complaints at BO offices

Period of pending No. of cases pending2007-2008

% tototal

pending

2008-2009

% tototal

pending

2009-2010

% to totalpending

Up to 1 month 2712 46 5041 54 2787 52

1-2 months 1394 24 2751 29 1526 28

2-3 months 861 15 956 10 808 15

More than 3 months 925 15 685 7 242 5

Total 5892 100 9433 100 5363 100

EXHIBIT 5.11

The pending cases were highest in the year 2008-2009.But, the caseswere reduced in the subsequent year 2009-2010.

5892 9433 53630

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2007-2008 2008-2009 2009-2010

Pennding position of complaints


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Table 5.12

Cost running the scheme

Period Total cost (incore)

No ofcomplaintsdisposed of

Cost percomplaints

2007-2008 12.50 49100 2546

2008-2009 15.29 65576 2331

2009-2010 19.74 83336 2368

While the aggregate cost of running the 15 banking ombudsman offices

has increased by 29% in absolute terms during the year under review, thecost per complaint disposed of has maintained at the same level due to theincrease in the number of complaints received/disposed of.


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Table No.5.13.

Disposal of complaints banking ombudsman

year Complaints

received

Complaints

redressed

x-5499

2

y-4910

0

X X XY

2006-

2007

44766 37661 -1022

6

-1143

9

104571076

130850721

116975214

2007-

2008

54992 49100 - - - - -

200-2009

75009 65576 20017

16476

400680289

271458576

329800092

2009-

2010

88699 83336 33707

34236

1136161849

1172103696

1153992852

43498

39273

1641413214

1574412993

1600768158

EXHIBIT 5.13

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

2006-2007 2007-2008 2008-2009 2009-2010

year

complaintsreceived&redressed

Series2

Series1


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Karl Pearsonscorrelation co-efficient:

XY (X)(Y) /N

r= X (X) Y (Y) N N

1600768158-(43498) (39273)1641413214-(43498) 1574412993- (39273)

12591087671262998013 1265939587

12591087671264466234

= 0.996

Inference

There is a significant relationship between the complaint receivedand complaint redressed by banking Ombudsman during the four years2006-2007,2007-2008,2008-2009 and 2009-2010.


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CHAPTER VI

DATA AND INTERPRETATION- PERFORMANCE OF

BANKING OMBUDSMAN IN AXIS BANK

Table 6.1

Statement of Customer Complaints received by bank March 31, 2010

Branches falling under

Complaints

No of complaints

North Zone 1129East Zone 600

West Zone 1054

South Zone 585

Complaints pertaining to RetailAssets, Credit Cards and otherservices

1213

Total 4581

EXHIBIT 6.1

Form the above table, it can be inferred that the large number ofcomplaints were received pertaining to Retail Assets, Credit Cards andother services and most of the complaints received were from North Zone

followed by west zone in the year 2009-2010.

0

200

400

600

800

1000

1200

North Zone East Zone West Zone South Zone

customer complaints in AXIS Bank


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Table No.6.2.

Disposal of complaints in Axis bank

year Complaints

received

Complaints

redressed

x-1720

y-3254

X Y XY

2006-

2007

12766 12830 11046

9576 122014116

91699776 105776496

2007-2008

4581 4571 2861 1317 8185321 1734489 3767937

2008-

2009

1720 3254 - - - - -

2009-

2010

3272 1681 1552 -1573 2408704

2474329 -2441296

2010-

2011

881 931 -839 -2323 703921 5396329 1948997

total 14620

6997 133312062

101304923

109052134


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EXHIBIT 6.2

XY (X)(Y) / N=

X (X) Y (Y) N N

109052134-(14620) (6997) /5=

133312062-(4620) 101304923-(6997)

5 588592906

=

90563182 91513321

88592906=91037007

= 0.973

Inference

There is a relationship between the complaints received andcomplaints redressed in Axis bank during the period of 5 years.

0

5000

10000

15000

20000

25000

30000

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

year

complaintsreceived&redressed

Series2

Series1


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Table No.6.3

Disposal of complaints in axis bank

year Complaintspending inbeginning

Complaintspending in

ending

x-52 y-70 X Y XY

2006-2007 80 16 28 -54 784 2916 -1512

2007-2008

70 80 18 10 324 100 180

2008-2009

52 70 - - - - -

2009-2010

13 52 -39 -18 1521 324 702

2010-2011

63 13 11 -57 121 3249 -627

18 -119 2750 6589 -1257


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EXHIBIT 6.3

XY (X) (Y) /N=

X (X) Y (Y) N N

(-1257)(18) (-119)

2750-(18) 6589- (-119) 5 5

-828.62685.2 3756.8

-828.6

3176.129

= -0.261

Inference

There is a negative correlation between the complaints at thebeginning and the complaints pending at the end of the period in AXISBank during the five years period of the study.

0

20

40

60

80

100

120

140

160

2006- 2007 2007- 2008 2008- 2009 2009- 2010 2010- 2011

year

complaintspending

peginning&ending

Series2

Series1


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CHAPTER VII

FINDINGS AND CONCLUSIONS

Findings

79266 of the complaints were received during the year2009-2010.

12721 of the complaints were received during the year 2009-2010.

The highest number i.e 58645 complaints were received through

Letter, post-card, fax, etc

2704 of region-wise receive complaints during the year 2009-2010

from metropolitan cities.

The cumulative total of last five years reveal that Private sector banks

had received highest number of complaints of 31% in comparison to

all the other banks.

Complaints relating to credit card were the highest with 18810(23.7%)

of during the year 2009-2010.

83336 (94%) of complaints were received during the year 2009-2010.

And 9433(13%) of complaints carried forward to next year in 2009-

2010.

3148 (38%) of the complaints were disposed by in mutual settlement

in the year 2009-2010.


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43115(66%) of the complaints received during the year 2008-2009

were rejected.

The pending cases were highest in the year 2008-2009.

Cost per complaints was highest with 2546 during the year 2007-2008.

88699 of the complaints were received by banking ombudsman during

the year 2009-2010.

8336 of the complaints redressed by banking ombudsman during the

year 2009-201

There is a significant relationship between the complaint received and

complaint redressed by banking Ombudsman during the four years

2006-2007, 2007-2008, 2008-2009 and 2009-2010.

12766 of the complaints receive in Axis bank during the year 2010-

2011.

80 complaints were pending at the beginning in the year 2010-2011 in

Axis bank.

There is a negative correlation between the complaints at the

beginning and the complaints pending at the end of the period in AXIS

Bank during the five years period of the study.

There is a relationship between the complaints received and

complaints redressed in Axis bank during the period of 5 years


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Suggestions

1. The main focus of Ombudsman scheme should be on the complaints

against credit card companies may well constitute a large number of

complaints pertained to loans and advances. Complaints against

deposit accounts formed the next highest category.

2. Many customers from rural areas were not familiar with the term

ombudsman. Hence, RBI has to take essential steps to create

awareness in rural areas.

3. It is imperative that attempts should be made to increase the instances

of disputes being resolved by mediation/conciliation rather than by

awards. In the event, that ombudsman has to give award; it must be

made final and binding on the parties with only single appeal allowed

to a higher court of law.

4. Independence of the ombudsman is another issue of great significance.

An independent Counsel consisting of representative of banks and

customers should appoint the ombudsman. The ombudsman must be a

person who has had practical experience in handling customer

complaints and in banking laws and regulations. Further, the

ombudsman should have a fixed tenure and should not be removed

from office except in cases of gross misconduct or dereliction of duty.

Only when these steps are taken will office of the ombudsman gain the

confidence and trust of the customers.


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5. To ensure that this happens, all banks must not only display the

scheme prominently in all their branches, they must also (on being

approached) explain clearly the obvious advantages of this system

over litigating in court of law. To improve efficiency, the possibility

of performance based remuneration for the ombudsman can also be

considered, i.e., depending upon the proportion of complaints that are

resolved by conciliation or mutual consent. Improving accessibility of

the scheme to the rural poor by having more offices in rural areas is

also crucial.


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Conclusion:

Though the Banking Ombudsman Scheme was introduced in the year

1995,witha viewto do away with the banking customer complaints, the sc

heme was amended in subsequent years of 2002 and 2006. But the banks

do not seem to have adopted the norm s for their efficient functioning that

is the reason behind the increasing consumer cases against the banks,

which are governed under the scheme. Thus, it can be seen that the

Ombudsman scheme is a boon and a very important channel for redressal

of grievances by the general public against banks and banking services. It

is framed in such a manner that it does not oust the jurisdiction of other

courts, and hence, aggrieved people do not hesitate in using the banking

ombudsman as a primary forum for resolution of disputes regarding

banks. To instill consumer confidence in the scheme, the RBI has to

ensure that the awards of the ombudsman are implemented by the banks.

Decline in duration of pending complaints also narrates the efficiency of

ombudsman in disposal of complaints. Another step taken by RBI to

allow the complainant to file the complaint through online mode seems to

be successful as more than one-fourth of total complaints are filed

through this mode. Though there is an increase in number of complaints

from the rural areas but it does not seem to be up to the mark. Improving

accessibility of the scheme to the rural poor by having more offices in

rural areas is need of the day. Further the scope of Bank Ombudsman is

limited to twenty seven grounds on which a customer can file a complaint

against bank. Apart from above BOs offices and Reserve Bank of India

also have also started outreach activities for creating awareness among

customers like interface with banks, organizing awareness camps,

personal/ village visits, participation in exhibitions, responding to

readers queries in newspapers, broadcasting advertisement.


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JOURNALS

Barbour, B, The Ombudsman and the Rule of Law (2005)44AIAL Forum, 17

Barbour B, What are the Essential Features of an Ombudsman? in

Creyke R & McMillan J (eds)Administrative Law: the Essentails

(AIAL 2002)

Del Villar, K, Who guards the guardians? Recent developments

concerning the jurisdiction and accountability of ombudsman,(2003)AIAL Forum25

Groves, M, Ombudsmens Jurisdiction in Prisons (2002)

28Monash University Law Review181

Petre, C, The Future of the Relationship Between Parliamentary

Ombudsman and Industry Ombudsman (2003)AIAL Forum63

Reif, LC, Building Democratic Institutions: The Role of NationalHuman Rights Institutions in Good Governance and Human Rights

Protection (2000) 13Harvard Human Rights Journal8

Stuhmcke A, The Commonwealth Ombudsman: Twenty Five

Years on and No Longer Alone (2003)AIAL Forum54

Stuhmcke, A, The rise of the Australian Telecommunications

Industry Ombudsman (2002) 26Telecommunications Policy 69 1. The Banking Ombudsman Scheme, 2006

2. Banking Ombudsman SchemeAnnual Report 2004


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WEBISTES

http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=14014

http://www.lawadmissions.info/index.php?option=com_content&view=ar

ticle&id=298:banking-ombudsman-scheme&catid=61:courts-and-

tribunals&Itemid=37

http://www.mightylaws.in/409/banking-ombudsman-scheme

http://www.axisbank.com/shareholderscorner/financials/annualreports.as

p

http://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asp

http://www.moneycontrol.com/company-facts/axisbank/history/AB16

www.rbi.org.
http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=14014http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=14014http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.mightylaws.in/409/banking-ombudsman-schemehttp://www.mightylaws.in/409/banking-ombudsman-schemehttp://www.axisbank.com/shareholderscorner/financials/annualreports.asphttp://www.axisbank.com/shareholderscorner/financials/annualreports.asphttp://www.axisbank.com/shareholderscorner/financials/annualreports.asphttp://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asphttp://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asphttp://www.moneycontrol.com/company-facts/axisbank/history/AB16http://www.moneycontrol.com/company-facts/axisbank/history/AB16http://www.rbi.org/http://www.rbi.org/http://www.rbi.org/http://www.moneycontrol.com/company-facts/axisbank/history/AB16http://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asphttp://www.axisbank.com/shareholderscorner/financials/annualreports.asphttp://www.axisbank.com/shareholderscorner/financials/annualreports.asphttp://www.mightylaws.in/409/banking-ombudsman-schemehttp://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.lawadmissions.info/index.php?option=com_content&view=article&id=298:banking-ombudsman-scheme&catid=61:courts-and-tribunals&Itemid=37http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=14014


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AXIS BANKBO LOCATION

BO location States under jurisdiction Dedicated Email id

Kolkata West Bengal and Sikkim [email protected]

Bhubaneswar Orissa [email protected]

Guwahati

Assam, Arunachal Pradesh,Manipur, Meghalaya,Mizoram, Nagaland andTripura

[email protected]

Patna Bihar and Jharkhand [email protected]

New DelhiDelhi, Haryana, Jammu andKashmir and Ghaziabaddistrict of Uttar Pradesh

[email protected]

Jaipur Rajasthan [email protected]

ChandigarhHimachal Pradesh, Punjaband Union Territory ofChandigarh

[email protected]

KanpurUttarakhand and UttarPradesh (excluding District ofGhaziabad)

[email protected]

ChennaiTamil Nadu, UnionTerritories of Pondicherry andAndaman and Nicobar Islands

[email protected]

Bangalore Karnataka [email protected]

Hyderabad Andhra Pradesh [email protected]

ThiruvananthpuramKerala and Union Territory ofLakshadweep

[email protected]

Mumbai Maharashtra and Goa [email protected]

AhmadabadGujarat, Union Territories ofDadra and Nagar Haveli,Daman and Diu

[email protected]

Bhopal

Madhya Pradesh and

Chhattisgarh [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Annexure A15FORM OF COMPLAINT (TO BE LODGED) WITH THE

BANKING

OMBUDSMAN

(TO BE FILLED UP BY THE COMPLAINANT)

To:

The Banking Ombudsman

Place of BOs office..Dear Sir,Sub: Complaint against .(Name of the banks branch)of(Name ofthe Bank)Details of the complaint are as under:1. Name of the Complainant ..2. Full Address of the Complainant

Pin Code ..Phone No/ Fax No. .Email .3. Complaint against (Name and fulladdress of the branch/bank) ..15 Substituted by Notification Ref CSD.BOS.No. 4736/13.01.01/2008-09dated February 3, 2009Pin Code .

Phone No. / Fax No. .4. Particulars of Bank or Credit card Account (If any)5. (a) Date of representation already made by the complainant to the bank(Please enclose a copy of the representation).(b) Whether any reminder was sent by the complainant? YES/NO( Please enclose a copy of the reminder ).

6. Subject matter of the complaint (Please refer to Clause 8 of theScheme)

a study on banking ombudsman scheme with special reference to axis bank

Documents