banking ombudsman

EXECUTIVE SUMMARY

The aim of this project is to introduce the reader to the topic of “THE

BANKING OMBUDSMAN”. The project also deals with the policy adopted by the

RBI and the some cases.The ability of the banking industry to achieve the socio-

economic objectives and in the process bringing more and more customers into

its fold will ultimately depend on the satisfaction of the customers. Banks have a

strong belief that a satisfied customer is the foremost factor in developing our

business.

This project is focused in understanding the essentiality of the Banking

Ombudsman in regards to the public interest and the interest of the banking

policies to enable resolution of complaints related to deficiency in banking

services. Sensing the need for easy, expeditious and inexpensive mechanism for

redressal of unresolved grievances of customers, the RBI initially formulated the

Scheme of Ombudsman, 1995, which became operational in June 1995,

providing an institutional and legal framework to bank customers to resolve all

their complaint The scheme is applicable to all scheduled commercial banks

having business in India and scheduled primary co-operative banks except

Regional Rural Banks.

Banking Ombudsman at important centres was set up to cover the entire

country. The Banking Ombudsman offers customers the opportunity to resolve

disputes with their banks without needing to resort to the Courts.

1

PREFACE

OBJECTIVES

To present Banking Ombudsman Scheme & how it does works.

To present the services of the Banking Ombudsman offered to the

customer.

To show how the Banking Ombudsman deals with customer complaints.

To explain the duties, functions & powers of the Ombudsman.

METHODLOGY

The methodology includes the information of the features of the Ombudsman in

the form of primary data that had been received from the Branch Managers of the

banks. It also includes the information’s from the related books & the related

websites.

2

CHAPTER- 01

INTRODUCTION TO BANKING

INTRODUCTION

The basic services a bank provides are checking accounts, which can be

used like money to make payments and purchase goods and services; savings

accounts and time deposits that can be used to save money for future use; loans

that consumers and businesses can use to purchase goods and services; and

basic cash management services such as check cashing and foreign currency

exchange. Four types of banks specialize in offering these basic banking

services: commercial banks, savings and loan associations, savings banks, and

credit unions.

A broader definition of a bank is any financial institution that receives,

collects, transfers, pays, exchanges, lends, invests, or safeguards money for its

customers. This broader definition includes many other financial institutions that

are not usually thought of as banks but which nevertheless provide one or more

of these broadly defined banking services. These institutions include finance

companies, investment companies, investment banks, insurance companies,

pension funds, security brokers and dealers, mortgage companies, and real

estate investment trusts.

Banking services are extremely important in a free market economy such

as that found in Canada and the United States. Banking services serve two

primary purposes. First, by supplying customers with the basic mediums-of-

exchange (cash, checking accounts, and credit cards), banks play a key role in

the way goods and services are purchased. Without these familiar methods of

3

payment, goods could only be exchanged by barter (trading one good for

another), which is extremely time-consuming and inefficient. Second, by

accepting money deposits from savers and then lending the money to borrowers,

banks encourage the flow of money to productive use and investments. This in

turn allows the economy to grow. Without this flow, savings would sit idle in

someone’s safe or pocket, money would not be available to borrow, people

would not be able to purchase cars or houses, and businesses would not be able

to build the new factories the economy needs to produce more goods and grow.

Enabling the flow of money from savers to investors is called financial

intermediation, and it is extremely important to a free market economy.

Banking institutions include commercial banks, savings and loan

associations (SLAs), savings banks, and credit unions. The major differences

between these types of banks involve how they are owned and how they manage

their assets and liabilities. Assets of banks are typically cash, loans, securities

(bonds, but not stocks), and property in which the bank has invested. Liabilities

are primarily the deposits received from the bank’s customers. They are known

as liabilities because they are still owned by, and can be withdrawn by, the

depositors of the financial institution.

TYPES OF BANKS

There are various types of banks which operate in our country to meet the

financial requirements of different categories of people engaged in agriculture,

business, profession, etc. On the basis of functions, the banking institutions in

India may be divided into the following types:

4

1.

Central Banks

A bank which is entrusted with the functions of guiding and regulating the

banking system of a country is known as its Central bank. Such a bank does not

deal with the general public. It acts essentially as Government’s banker; maintain

5

TYPES OF BANK

CENTRAL

BANKS

DEVELOPMENT

BANKS

SPECIALIZED

BANKS

CO-OPERATIVE BANKS

CO-OPERATIVE BANKS

COMMERCIAL

BANK

Public Sector Bank

Private sector bank

Foreign bank

Public Sector Bank

Private sector bank

Foreign bank

Primary Credit Societies

Central Co-operative Banks

State Co-operative Banks




deposit accounts of all other banks and advances money to other banks, when

needed.

The Central Bank provides guidance to other banks whenever they face

any problem. It is therefore known as the banker’s bank. It advises the

Government on monetary and credit policies and decides on the interest rates for

bank deposits and bank loans. Another important function of the Central Bank is

the issuance of currency notes, regulating their circulation in the country by

different methods. No other bank than the Central Bank can issue currency.

2.

Commercial Banks

Commercial Banks are banking institutions that accept deposits and grant short-

term loans and advances to their customers. In addition to giving short-term

loans, commercial banks also give medium-term and long-term loan to business

enterprises. Commercial banks are of three types:

Public Sector Banks

These are banks where majority stake is held by the Government of India or

Reserve Bank of India. Examples of public sector banks are: State Bank of India,

Corporation Bank, Bank of Baroda and Dena Bank, etc

Private Sectors Banks

In case of private sector banks majority of share capital of the bank is held by

private individuals. These banks are registered as companies with limited liability.

For example: The Jammu and Kashmir Bank Ltd., Bank of Rajasthan Ltd.,

Development Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank

Ltd., Global Trust Bank, Vysya Bank, etc.

6

Foreign Banks

These banks are registered and have their headquarters in a foreign country but

operate their branches in our country. Some of the foreign banks operating in our

country are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank,

American Express Bank, Standard & Chartered Bank, Grindlay’s Bank, etc. The

number of foreign banks operating in our country has increased since the

financial sector reforms of 1991.

3.

Development Banks

Business often requires medium and long-term capital for purchase of machinery

and equipment, for using latest technology, or for expansion and modernization.

Such financial assistance is provided by Development Banks. They also

undertake other development measures like Public Sector Banks comprise 19

nationalized banks and State Bank of India and its 7 associate banks. Industrial

Finance Corporation of India (IFCI) and State Financial Corporation’s (SFCs) are

examples of development banks in India.

4.

Co-Operative Banks

People who come together to jointly serve their common interest often form a co-

operative society under the Co-operative Societies Act. When a co-operative

society engages itself in banking business it is called a Co-operative Bank. The

society has to obtain a license from the Reserve Bank of India before starting

banking business. Any co-operative bank as a society is to function under the

overall supervision of the Registrar, Co-operative Societies of the State. As

regards banking business, the society must follow the guidelines set and issued

by the Reserve Bank of India. There are three types of co-operative banks

operating in our country:

7


These are formed at the village or town level with borrower and non-borrower

members residing in one locality. The operations of each society are restricted to

a small area so that the members know each other and are able to watch over

the activities of all members to prevent frauds.


These banks operate at the district level having some of the primary credit

societies belonging to the same district as their members. These banks provide

loans to their members (i.e., primary credit societies) and function as a link

between the primary credit societies and state co-operative banks.


These are the apex (highest level) co-operative banks in all the states of the

country. They mobilize funds and help in its proper channelization among various

sectors. The money reaches the individual borrowers from the state co-operative

banks through the central co-operative banks and the primary credit societies.

5.

Specialized Banks

There are some banks, which cater to the requirements and provide overall

support for setting up business in specific areas of activity. EXIM Bank, SIDBI

and NABARD are examples of such banks. They engage themselves in some

specific area or activity and thus, are called specialized banks.

Export Import Bank of India (EXIM Bank)

8

If you want to set up a business for exporting products abroad or importing

products from foreign countries for sale in our country, EXIM bank can provide

you the required support and assistance. The bank grants loans to exporters and

importers and also provides information about the international market.

Small Industries Development Bank of India (SIDBI)

If you want to establish a small-scale business unit or industry, loan on easy

terms can be available through SIDBI. It also finances modernization of small-

scale industrial units, use of new technology and market activities. The aim and

focus of SIDBI is to promote, finance and develop small-scale industries.

National Bank for Agricultural and Rural Development

(NABARD)

It is a central institution for financing agricultural and rural sectors. If a person is

engaged in agriculture or other activities like handloom weaving, fishing, etc.

NABARD can provide credit, both short-term and long-term, through regional

rural banks. It provides financial assistance, especially, to co-operative credit, in

the field of agriculture, small scale industries, cottages and village industries in

rural areas.

9

RIGHTS OF CONSUMERS

Right to Safety

The right to be protected against the marketing of goods and services which are

hazardous to life and property Consumer right to safety applies to all possible

consumption patterns and to all goods and services. In the context of the new

10

market economy and rapid technological advances affecting the market, the right

to safety has become a pre-requisite quality in all products and services. For e.g.

some Indian products carry the ISI mark, which is a NB symbol of satisfactory

quality of a product? Similarly, the FPO and AGMARK symbolize standard quality

of food products.

Right to Information

Right to information means the right to be given the facts needed to make an

informed choice or decision about factors like quality, quantity, potency, purity

standards and price of product or service. The right to information now goes

beyond avoiding deception and protection against misleading advertising,

improper labeling and other practices. For e.g. when you buy a product or utilize

a service, you should be informed about;

a) How to consume a product.

b) The adverse health effects of its consumption.

c) Whether the ingredients used are environment- friendly or not etc.

Right to Redress

The right to seek redressal against unfair trade practices or restrictive trade

practices or unscrupulous exploitation of consumers. It is to protect consumer

interests that consumers have been given the right to obtain redress. In India, we

have a redress machinery called Consumer Courts constituted under the

Consumer Protection Act (1986), functioning at national state and district levels.

But it has not been made complete use of under due to lack of awareness of

basic consumer rights among consumers themselves. While in the developed

world, right to redress is perhaps the most commonly exercised consumer right,

11

in developing countries, consumers are still wary of getting involved in legal

redress system. There are consumer courts in India where any consumer can

lodge a case if s/he thinks he or she has been cheated.

Right to Consumer Education

Consumer education empowers consumers to exercise their consumer rights. It

means the right to acquire the knowledge and skill to be informed consumer

throughout life. The right to consumer education incorporates the right to the

knowledge and skills needed for linking action and influences factors which affect

consumer decisions. It is the single most powerful tool that can take consumers

from their present disadvantageous position to one of strength in the

marketplace. Consumer education is dynamic, participatory and is mostly

acquired by hands-on and practical experience.

Right to Basic Needs

This right is the right to basic goods and services which guarantee dignified

living. It includes adequate food, clothing, health care, drinking water and

sanitation, shelter, education, energy and transportation. Access to food, water

and shelter are the basis of any consumer's life. Without these fundamental

amenities, life cannot exist. The right to basic needs means that availability of

articles which are the basic need of every consumer must be ensured.

Right to be heard

This means the right to be represented so that consumers’ interests receive full

and sympathetic consideration in the formulation and execution of economic

policy. This right is being broadened to include the right to be heard and

represented in the development of products and services before they are

produced or set up; it also implies a representation, not only in government

policies, but also in those of other economic powers.

12

POLICY FOR THE GRIEVANCES REDRESSAL OF THE

CUSTOMER COMPLAINTS

In the present scenario of competitive banking, 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 banks are service organizations. As a service organization,

customer service and customer satisfaction should be the prime concern of any

bank. The bank believes that providing prompt and efficient service is essential

not only to attract new customers, but also to retain existing ones.

This policy document aims at minimizing instances of customer

complaints and grievances through proper service delivery and review

mechanism and to ensure prompt redressal of customer complaints and

grievances. The review mechanism should help in identifying shortcomings in

product features and service delivery. Customer dissatisfaction would spoil

bank’s name and image. The Bank’s policy on grievance redressal follows the

under noted principles:

Customers be treated fairly at all times

Complaints raised by customers are dealt with courtesy and on time

Customers are fully informed of avenues to escalate their

Complaints/grievances within the organization and their rights to alternative

remedy, if they are not fully satisfied with the response of the bank to their

complaints

13

Bank will treat all complaints efficiently and fairly as they can damage the

bank’s reputation and business if handled otherwise

The Bank employees must work in good faith and without prejudice to

the interests of the customer.

In order to make bank’s redressal mechanism more meaningful and effective, a

structured system needs to be built up towards such end. Such system would

ensure that the redressal sought is just and fair and is within the given frame-

work of rules and regulation. The policy document would be made available at all

branches. All employees of the Bank should be made aware about the Complaint

handling process

The customer complaint arises due to:

The attitudinal aspects in dealing with customers.

Inadequacy of the functions/arrangements made available to the

customers or gaps in standards of services expected and actual

services rendered.

The customer is having full right to register his complaint if he is not

satisfied with the services provided by the bank. He can give his

complaint in writing, orally or over telephone. If customer’s complaint

is not resolved within given time or if he is not satisfied with the

solution provided by the bank, he can approach Banking

Ombudsman with his complaint or other legal avenues available for

grievance redressal.

14

CHAPTER – 2

INTRODUCTIONS TO BANKING OMBUDSMAN

Banking Ombudsman is a quasi judicial authority functioning under India’s

Banking Ombudsman Scheme 2006, and the authority was created pursuant to

the a decision by the Government of India to enable resolution of complaints of

customers of banks relating to certain services rendered by the banks. The

Banking Ombudsman Scheme was first introduced in India in 1995, and was

revised in 2002 and 20061. In the wake of the failure in the efficient services of

the banks, the RBI brought a scheme for the prompt, efficient and courteous

services and also to protect the rights of the customers.

An ombudsman is a person who has been appointed to look into

complaints about an organization. Using an ombudsman is a way of trying to

resolve a complaint without going to court. Banking Ombudsman is a quasi

judicial authority functioning under India’s Banking Ombudsman Scheme, and

the authority was created pursuant to the a decision by the Government of India

to enable resolution of complaints of customers of banks relating to certain

services rendered by the banks.

The Banking Ombudsman is an official authority to investigate the

complaint from the customers and address the complaint and thereby bring the

solution among the aggrieved parties. So the Banking Ombudsman plays the role

of a mediator and serves the purpose of reconciliation. The Banking Ombudsman

has been defined under clause 4 of the Banking Ombudsman Scheme, 20062.

Clause 4 lays down that::

15

APPOINTMENT & TENURE

(1) The Reserve Bank may appoint one or more of its officers in the rank of Chief

General Manager or General Manager to be known as Banking Ombudsmen to

carry out the functions entrusted to them by or under the Scheme.

(2) The appointment of Banking Ombudsman under the above Clause may be

made for a period not exceeding three years at a time

CHARACTERISTICS OF THE BANKING OMBUDSMAN.

1. 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.

2. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled

Primary

Co-operative Banks are covered under the Scheme.

3.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.

4. The Banking Ombudsman does not charge any fee for resolving customers’

complaints.

5. No 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.

16

TYPES OF OMBUDSMAN

Banking Ombudsman

The Reserve Bank of India (RBI) first introduced the Banking Ombudsman

Scheme In1995, which has been revised in 2002 and 2005. The latest revised

Scheme has come into force from 1stJan 2006.

S.E.B.I. Ombudsman

17

TYPES OF OMBUDSMAN

Banking Ombudsman S.E.B.I. Ombudsman

Electricity Ombudsman Telecom Ombudsman

Income Tax Ombudsman

Insurance Ombudsman

the Electricity Act, 2003, issues

guidelines for establishment of

forum and Ombudsman for

redressal of grievances of

Electricity consumers. The Delhi

Regulatory Commission (DERC)

vide its Notification dated

11thMarch, 2006 has issued

DERC (Guidelines for

establishment of Forum of

redressal of grievance of the

consumer and Ombudsman)

Regulations, 2003. It may be

noted that the Ombudsman is the

APPELLATE Authority under

the Electricity Act 2003, and the

DERC Regulations, 2003 and

therefore an electricity consumer

has to first approach the

Consumer Grievance Redressal

Forum established under the

DERC Regulations, 2003.

Telecom Ombudsman

The Telecom Regulatory

Authority of India Act, 1997,

empowers the Telecom

Regulatory Authority of India

Act 1997, empowers the Telecom

Regulatory Authority of India

(TRAI) to make the

recommendations on laying

down the standards of quality of

services to be provided by the

services providers and conduct

the interest of the periodical

surveys of Telecom services so as

to protect the interest of the

consumers. The telecom

operators frequently threaten to

disconnects the phones and with

draw the numbers given t o

subscribers if the deadline for

payment is missed by a day or

there is miscalculation of the

tiniest amount. The TRAI is,

however, neither empowered to

look into the grievances of

individual customers nor take

action against the operators who

do not meet quality of standards

As there is no specialized body to

redress the grievance of telecom

customers, they have to approach

consumer forum setup under

THE Consumer Protection Act,

1986, or civil courts for

Resolutions adjudication of

disputes.


The government is considering

creating an office of Income Tax

Ombudsman to protect individual

taxpayer’s right. The

Ombudsman will identify issues

that increase the compliance

burden or create problems for

taxpayers and bring those issues

to the attention of the ministry of

Finance. The Ombudsman will

make appropriate legislative

proposal where necessary and

send periodical reports to the

Department of Revenue,

suggesting appropriate action. It

is proposed to initially setup

offices of Ombudsman at Delhi,

Mumbai, Kolkata and Chennai.

Insurance Ombudsman

The Government of India,

Minister of Finance, Department

of Economics Affairs, Insurance

Division under section 114 (1) of

Insurance Act, 1938, has framed

the “Redressal of Public

Grievance Rules, 1998”, for

appointment of Insurance

Ombudsman, which comes into

force with effect from

11thNovember 1998. The

Insurance Ombudsman has

started functioning from 1999, to

provide for efficient, cost

effective and impartial settlement

of claims and grievance of any

person against a Life r General

Insurance in Public and private

sector. The meaning of

expression ‘any other person’ is

wider than ‘consumer’ and

therefore, even third party having

grievance with respect to an

Insurance contract can approach

the Ombudsman.

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The Securities Exchange Board of India (SEBI) under section 30 read with sub-

section (1) of section 11 of the SEBI Act, 1992, has framed the SEBI

(Ombudsman) Regulations, 2003, which were notified on 21stAugust 2003. The

Regulations provided for the establishment of the office of Ombudsman to

redress the Grievance of investors in securities and connected matters. The

listed companies and registered stock intermediaries have to disclose the name

address and other particulars of ombudsman in their for the benefit of the

investors.

Electricity Ombudsman

The Electricity Regulatory Commission, under section 181 read with sub-section

(5) of section 42 of the Electricity Act, 2003, issues guidelines for establishment

of forum and Ombudsman for redressal of grievances of Electricity consumers.

The Delhi Regulatory Commission (DERC) vide its Notification dated 11thMarch,

2006 has issued DERC (Guidelines for establishment of Forum of redressal of

grievance of the consumer and Ombudsman) Regulations, 2003. It may be noted

that the Ombudsman is the APPELLATE Authority under the Electricity Act 2003,

and the DERC Regulations, 2003 and therefore an electricity consumer has to

first approach the Consumer Grievance Redressal Forum established under the

DERC Regulations, 2003.

Telecom Ombudsman

The Telecom Regulatory Authority of India Act, 1997, empowers the Telecom

Regulatory Authority of India Act 1997, empowers the Telecom Regulatory

Authority of India (TRAI) to make the recommendations on laying down the

standards of quality of services to be provided by the services providers and

18

conduct the interest of the periodical surveys of Telecom services so as to

protect the interest of the consumers. The telecom operators frequently threaten

to disconnects the phones and with draw the numbers given t o subscribers if the

deadline for payment is missed by a day or there is miscalculation of the tiniest

amount. The TRAI is, however, neither empowered to look into the grievances of

individual customers nor take action against the operators who do not meet

quality of standards As there is no specialized body to redress the grievance of

telecom customers, they have to approach consumer forum setup under THE

Consumer Protection Act, 1986, or civil courts for Resolutions adjudication of

disputes.


The government is considering creating an office of Income Tax Ombudsman to

protect individual taxpayer’s right. The Ombudsman will identify issues that

increase the compliance burden or create problems for taxpayers and bring

those issues to the attention of the ministry of Finance. The Ombudsman will

make appropriate legislative proposal where necessary and send periodical

reports to the Department of Revenue, suggesting appropriate action. It is

proposed to initially setup offices of Ombudsman at Delhi, Mumbai, Kolkata and

Chennai.

Insurance Ombudsman

The Government of India, Minister of Finance, Department of Economics Affairs,

Insurance Division under section 114 (1) of Insurance Act, 1938, has framed the

19

“Redressal of Public Grievance Rules, 1998”, for appointment of Insurance

Ombudsman, which comes into force with effect from 11thNovember 1998. The

Insurance Ombudsman has started functioning from 1999, to provide for efficient,

cost effective and impartial settlement of claims and grievance of any person

against a Life r General Insurance in Public and private sector. The meaning of

expression ‘any other person’ is wider than ‘consumer’ and therefore, even third

party having grievance with respect to an Insurance contract can approach the

Ombudsman.

DUTIES & FUNCTIONS OF OMBUDSMAN

The Ombudsman shall enquire into and investigate in accordance

with the

provisions of the Act, and take action or steps as may be prescribed Act

and concerning-

Practices and actions by persons, enterprises and other private

Institutions where complaints allege that violations of fundamental

rights and freedoms have taken place.

All instance or matters of alleges or suspected corruption and the

misappropriation of public moneys or other public property by

Officials.

Without derogating from the provisions, any request or complaint in

respect of instances or matters referred to in that provisions, may include

any instance or matter in respect of which the Ombudsman has reason

to suspect-

20

That the provisions of any law or under the authority of the State or

by

any person in its employment, or that any practice is so followed, in a

manner which is not in the public interest

That the powers, duties or functions which vest in the State or,

body or

institution, or any person in its employment are exercised or perform in

irregular manner

That moneys forming part of the funds of the State or body or

institution,

or received or held by or on behalf of the State or body or institution

being or have been dealt with an irregular manner

Any person wishing to lay any instance or matter referred to in

provisions

before the Ombudsman shall do so in such manner as the Ombudsman

may determine or allow

The Ombudsman shall not be required to investigate any instance

or

matter referred to in the provisions which has been laid before him or her

is under the provisions when the grounds on account of which the inquiry

is desired in the opinion

The provisions shall not apply in respect of any decision taken in or in

connect with any civil or criminal case by a court of law.

GROUNDS OF CUSTOMERS COMPLAINTS CONSIDERED

BY BANKING OMBUDSMAN

21

The Banking Ombudsman can receive and consider any complaint relating to the

following deficiency in banking services (including internet banking):

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

there of;

non-acceptance, without sufficient cause, of coins tendered and for

charging of commission in respect there of;

non-payment or delay 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;

complaints from Non-Resident Indians having accounts in India in relation

to their remittances from abroad, deposits and other bank-related

matters;

levying of charges without adequate prior notice to the customer;

22

non-adherence by the bank or its subsidiaries to the instructions of

Reserve

Bank on ATM/Debit card operations or credit card operations;

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-observance of Reserve Bank guidelines on engagement of recovery

agents by banks; and

non-observance of Reserve Bank Directives on interest rates;

delays in sanction, disbursement or non-observance of prescribed time

schedule for disposal of loan applications;

non-acceptance of application for loans without furnishing valid reasons to

the applicant;

GROUNDS OF CUSTOMERS COMPLAINTS NOT

CONSIDERED BY BANKING OMBUDSMAN

Ones complaint will not be considered if

23

One has not approached his bank for redressal of his grievance first.

One has not made the complaint within one year from the date one has

received the reply of the bank or if no reply is received if it is more than

one year and one month from the date of representation to the bank

subject matter of the complaint is pending for disposal / has already

been dealt with at any other forum like court of law, consumer court etc.

The Frivolous or vexation.

The institution complained against is not covered under the scheme.

The subject matter of the complaint is not within the ambit of the Banking

Ombudsman

If the complaint is for the same subject matter that was settled through the

Office of the Banking Ombudsman in any previous proceedings.

PROCEDURE FOR FILING COMPLAINT

Any person who has a grievance against a bank on any one or more of

the

grounds mentioned above, may, himself or through his authorized

representative (other than), make a complaint to the Banking Ombudsman

within whose jurisdiction the branch or an advocate Office of the bank

complained against is located.

Complaints arising out of the operations of credit cards, shall be filed

before the Banking Ombudsman within whose territorial jurisdiction the billing

address of the card holder is located and not the place where the bank

concerned or the credit card processing unit is located.

24

The complaint shall be made in writing duly signed by the complainant or

his authorized representative and shall as far as possible be in the form and

shall contain such particulars as specified in the Scheme

The complainant shall file along with the complaint, copies of the documents,

if any, which he proposes to rely upon and also a declaration that the

complaint is maintainable as per clause 9(3) of the Scheme

A complaint can also be made through electronic means.

The complainant shall before making a complaint to the Banking

Ombudsman, make a written representation to the bank

The complaint can be filed if the bank has rejected the complaint or the

complainant had not received any reply within a period of one month after

the bank received his representation or if the complainant is not satisfied

with the reply given to him by the bank

The complaint to the Banking Ombudsman is to be made not later than one

year after the complainant has received the reply of the bank to his

representation or, where no reply is received, not later than one year and

one month after the date of the representation to the bank.

The complaint should not be in respect of the same subject matter which

was settled or dealt with on merits by the Banking Ombudsman in any

previous proceedings whether or not received from the same complainant or

along with one or more complainants or one or more of the parties

concerned with the subject matter.

25

The complaint should 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 order has been passed by any such court,

tribunal, arbitrator or forum.

.

The complaint should not be frivolous or vexatious in nature.

The complaint should be made before the expiry of the period of limitation

prescribed under the Indian Limitation Act, 1963 for such claims

Address and Area of Operation of Banking Ombudsman

Sl.

No.

Centre Contact details of the Office of

Banking Ombudsman

Area of Operation

1. Ahmedabad Shri. K . Chandrachoodan

C/o Reserve Bank of India

La Gajjar Chambers,

Ashram Road,

Ahmedabad-380 009

Tel.No.079- 26582357,

079-26586718/2657 5807

Fax No.079-26583325

Click here to send email

Gujarat, Union

Territories of Dadra and

Nagar Haveli, Daman

and Diu

2. Bangalore Shri. K.R.Ananda


10/3/8, Nrupathunga Road

Karnataka

26

Bangalore-560 001

Tel.No.080-22210771, 080-

22275629

Fax No.080-22244047


3. Bhopal Shri T. Karunakaran


Hoshangabad Road,

Post Box No.32,

Bhopal-462 011

Tel.No.0755-2573772, 0755-

2573776

Fax No.0755-2573779


Madhya Pradesh and

Chattisgarh

4. Bhubaneswar Shri K C Mahapatra


Pt. Jawaharlal Nehru Marg

Bhubaneswar-751 001

Tel.No.0674-2396207, 0674-

2396008

Fax No.0674-2393906


Orissa

5. Chandigarh Shri Lalit Srivastava


4th Floor, Sector 17, Central

Vista

Chandigarh – 160 017

Himachal Pradesh,

Punjab, Union Territory

of Chandigarh and

Panchkula, Yamuna

Nagar and Ambala

27

Tel.No.0172-2721011/2721109

Fax No.0172-2721880


Districts of Haryana

6. Chennai Shri S. Ganesh

C/o Reserve Bank of India,

Fort Glacis,

Chennai 600 001

Tel No. (044) 2539 9170 /

25395963

/ 2539 9159

Fax No.044-25395488


Tamil Nadu, Union

Territories of

Pudducherry (except

Mahe Region) and

Andaman and Nicobar

Islands

7. Guwahati Shri B.B.Sangma


Station Road,

Pan Bazar

Guwahati-781 001

Tel.No.0361-2542556, 0361-

2540445

Fax No.0361-2540445


Assam, Arunachal

Pradesh, Manipur,

Meghalaya, Mizoram,

Nagaland and Tripura

8. Hyderabad Shri M. Sebastian


6-1-56, Secretariat Road

Saifabad,

Hyderabad-500 004

Tel.No.040-23210013, 040-

Andhra Pradesh

28

23243970

Fax No.040-23210014


9. Jaipur Shri N.P.Topno


4th floor

Rambagh Circle, Tonk Road

Jaipur-302 052

Tel.No.(0141) 2570357/2570392

Fax No.0141-2562220


Rajasthan

10. Kanpur Smt. Madhavi Sharma


M.G. Road, Post Box No.82

Kanpur-208 001

Tel.No.0512-2306278/2303004

Fax No.0512-2305938


Uttar Pradesh (excluding

District of Ghaziabad

and Gautam Budh

Nagar) and Uttaranchal

11. Kolkata Shri M S Soy


15, Nethaji Subhas Road

Kolkata-700 001

Tel.No.(O)033-2230-4982

Fax No.033-22305899


West Bengal and Sikkim

12. Mumbai Shri O.P. Aggarwal Maharashtra and Goa

29


Garment House,

3rd Floor,

Dr. Annie Besant Road,

Worli, Mumbai-400 018

Tel.No.022-

24924607/24960893/2493 3358

Fax No.022-24960912


13. New Delhi Shri M Rajeshwara Rao

Banking Ombudsman

Reserve Bank of India Building

2nd Floor, 6, Sansad marg

New Delhi - 110001

TelNo.(011) 23730633/

23736270/23736271/23725445/

23710882

Fax No. 011-23725218


Delhi, Jammu &

Kashmir,

Haryana (except the

districts of Ambala,

Yamuna Nagar and

Panchkula), and the

districts of Ghaziabad

and Gautam Budh

Nagar of Uttar Pradesh

14. Patna Shri A F Naqvi


South Gandhi Maidan,

Patna-800 001

Tel.No.0612-2322569/2323734

Fax No.0612-2320407


Bihar and Jharkhand

15. Thiruvananthapur Shri F R Joseph Kerala, and Union

30

mailto:[email protected]

am C/o Reserve Bank of India

Bakery Junction

Thiruvananthapuram-695 033

Tel.No.0471-2326852

/2332723/2323959

Fax No.0471-2321625


Territory of

Lakshadweep and Union

Territory of Puducherry (

only Mahe Region)

CHAPTER – 03

BANKING OMBUDSMAN SCHEME

INTRODUCTION

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 to provide for a system of redressal of grievances

against banks. The Scheme sought to establish a system of expeditious and

inexpensive resolution of customer complaints. The Scheme is in operation since

1995 and has been revised during the years 2002 and 2006. The Scheme is

being executed by Banking Ombudsmen appointed by Reserve Bank at 15

centers covering the entire country. As mandated by the Banking Ombudsman

Scheme, the Banking Ombudsmen submit an Annual Report on the functioning

of their offices every year. Based on such reports, an Annual Report for the

Banking Ombudsman Scheme in a whole is prepared at Reserve Bank of India,

Central Office.

31

As is being the practice, the Annual Report covers the last five-year

period with focus on the current year. Further, as a result of computerization of

the functioning of Banking Ombudsman Offices through the Complaint Tracking

Software, detailed analysis was possible on the information pertaining to year

2006-07. With the decision to merge the Banking Ombudsman Offices with that

of RBI offices, the accounting period for the Banking Ombudsman Offices was

changed from April 1-March 31 to July 1-June 30 to be in congruent with that of

RBI offices. Accordingly, the information analyses for the year 2006-07 pertains

to the period July 1, 2006 to June 30, 2007.

New areas of Complaint.

The bank customers can complain about non-payment or any inordinate

delay in payments or collection of cheques towards bills or remittances by banks,

as also non-acceptance of small denomination notes and coins or charging of

commission for acceptance of small denomination notes and coins by banks.

Provisions of the Scheme. The Banking Ombudsman Scheme 2006 provides a

wide scope and extent to the schemes of 1995 and 2002. Many new changes

have been made in the old scheme. The most essential provisions of the scheme

are as follows:

1. Appointment and tenure. The Section 4 of the scheme provides for the

appointment of one or more of the officers of the Reserve Bank of India in the

rank of Chief General Manager or General Manager to be known as Banking

Ombudsmen to carry out the functions entrusted to them by or under the

Scheme. Their tenure would be not more than a period of five years.

32

2. Location of the office. Generally, the office of the banking ombudsman is located

at the place specified by the Reserve Bank of India. For the expedite disposal of

the complaints, a banking ombudsman may hold office at such places, under his

jurisdiction which he deems fit for the disposal of the complaints3.

3. Powers and Jurisdictions. The scheme lays down the following provisions dealing

with powers and functions of the Banking Ombudsman:

4. Authority of each Banking Ombudsman extends to the territorial limits entailed by

the Reserve Bank of India.

GENERAL PARTICULARS ON THE SCHEME

The word ‘Ombudsman’ in general means a ‘grievance man’, a public

official who is appointed to investigate complaints against the administration. He

is to intervene for the ordinary citizen in his dealings with the complex machinery

of the establishment. In India, any person whose grievance against a bank is not

resolved to his satisfaction by that bank within a period of one month can

approach the Banking Ombudsman if his complaint pertains to any of the matters

specified in the Scheme.

Banking Ombudsmen have been authorized to look into complaints

concerning deficiency in banking service , sanction of loans and advances in so

far as they relate to non-observance of the Reserve Bank directives on interest

rates, delay in sanction or non-observance of prescribed time schedule for

disposal of loan applications or nonobservance of any other directions or

instructions of the Reserve Bank as may be specified for this purpose, from time

to time, and such other matters as may be specified by the Reserve Bank. The

33

Scheme envisages expeditious and satisfactory disposal of customer complaints

in a time bound manner.

The Banking Ombudsman on receipt of any complaint endeavors to

promote a settlement of the complaint by agreement between the complainant

and the bank named in the complaint through conciliation or mediation. For the

purpose of promoting a settlement of the complaint, the Banking Ombudsman

has been allowed to follow such procedures as he may consider appropriate and

he is not bound by any legal rule of evidence. If a complaint is not settled by

agreement within a period of one month from the date of receipt of the complaint

or such further period as the Banking Ombudsman may consider necessary, he

may pass an Award after affording the parties reasonable opportunity to present

their case. He shall be guided by the evidence placed before him by the parties,

the principles of banking law and practice, directions, instructions and guidelines

issued by the Reserve Bank from time to time and such other factors, which in

his opinion are necessary in the interest of justice.

SCOPE OF THE SCHEME

The Banking Ombudsman Scheme, 2002 covered all the Regional Rural

Banks in addition to all Commercial Banks and Scheduled Primary Co-operative

Banks, which were already covered by earlier Banking Ombudsman Scheme,

1995. There is no change in this regard in the Banking Ombudsman Scheme,

2006.

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

34

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.

The important new grounds of complaints added include credit card

issues, failure in providing the promised facilities, non-adherence to fair practices

code, levying of excessive charges without prior notice and issues pertaining to

accepting payment towards taxes and issuing/servicing of Government

securities. The grounds of complaints have been enumerated in Clause 8 of the

Banking Ombudsman Scheme, 2006.

OPERATIONALISATION

Reserve Bank of India operationalised the Banking Ombudsman Scheme by

establishing Banking Ombudsman Offices at 15 centers all over the country. The

names, addresses and area of operation of the Banking Ombudsmen have been

given in to Annexure ‘A’. Reserve Bank frames the guidelines for operationalizing

the Scheme and supervises the running of the Scheme. It also supervises the

running of the Scheme and administrative arrangements, budget and expenditure

of the Banking Ombudsman Offices.

PERFORMANCE OF THE OFFICES OF BANKING

OMBUDSMAN

The performance of the Offices of the Banking Ombudsman was analyzed on the

aspects such as the quantum of complaints handled by them, the timeliness in

35

handling the issues, and appropriateness of the decisions given against the

complaints.

Number of Complaints Received

The number of complaints received by the Banking Ombudsman Offices had

constantly increased in the last five years. There was more than threefold

increase in the number of complaints received in the year 2006-07 from the

previous year after the Banking Ombudsman Scheme, 2006 was notified. The

increasing receipt was also observed in the year 2007-08 with a 24% increase

from the year 2006-07. The average number of complaints received per Banking

Ombudsman Office has also increased from 550 in 2003-04 to 3192 in 2007-08.

36

Disposal of complaints by Banking ombudsman offices

PeriodNo of Offices of

Banking

Ombudsman

Complaints

received

during the year

Average

of

complaints

per office

No.Change

from

Previous

year

2003-04 15 8246 +53 550

37

2004-05 15 10560 +28 704

2005-06 15 31732 +200 2115

2006-07 15 38638 +22 2576

2007-0815 47887 +24 3192

The increase in the number of complaints received during the years 2005-06

and2006-07 can be attributed to new areas such as credit card complaints

included and to facilitation of complaint submission by allowing complaint

submission in any form including by online and by email allowed in the Banking

Ombudsman Scheme, 2006. Per month receipt in the number of complaints

received under the BO Scheme 2006 was more than thrice the number of

complaints received under the Banking Ombudsman Scheme, 2002.

The increase in the number of complaints received under the Banking

Ombudsman Scheme 2006 as compared to the previous scheme clearly

indicates the extent to which the scheme has benefited larger sections of the

banking customers. The comparative effects of the Banking Ombudsman

Schemes 2002 and 2006 in complaint receipt are given as below:

period Scheme No. of

38

running complaints

From To Total

received

From To Total Total Per

month

01.04.2005 31.12.2005 9 month BO Scheme

2002

9723 1080

01.01.200631.06.2007 18 month BO Scheme 60647 3370

Disposal of Complaints

During the year 2007-08, the Banking Ombudsman Offices disposed of 49100

complaints (including from the complaints pending at the beginning of the year

and those received during the year). Of these, 21747 complaints (49%) were

settled to the satisfaction of the complainants, 15914 complaints (36%) could

no be considered under the scheme owing to several reasons like being

outside the purview of the scheme time-barred, without sufficient

cause, frivolous, pending in other for, etc. A such sample analysis of 756

complaints that could not be considered under the

Scheme disclosed that 42% of complaints fell outside the purview of the

scheme and 23% were first resort complaints and could not be taken

up by the Banking Ombudsman. In 11% of the complaints, deficiency of

service could not be established and the remaining 24% complaints could not

be considered for reasons like they were pending in other for or the

complaints required of complaints over the last five years

are furnished in the following table: 39

Disposal of Complaints by banking ombudsman Officer

Particulars 2003-04 2004-05 2005-06 2006-07 2007-08

Total complaints

dealt

With during the

year

9483 12034 33363 44766 54992

Complaints

setteles to

satisfaction of

complainants(a)

3998

(42%)

5440

(45%)

14931

(45%)

21747

(49%)

39365

(53%)

Complaites could

not be

considered under

the scheme(b)

4011

(42%)

4963

(41%)

12304

(37%)

15914

(36%)

19735

(36%)

The number of

complaints

disposed of(a+b)

8009

(84%)

10403

(86%)

27235

(82%)

37661

(84%)

49100

(89%)

Complaints

under process

1474

(16%)

1631

(14%)

6128

(18%)

7105

(16%)

5892

(11%)

Mode of Disposal of Complaints

The Banking Ombudsman disposed of complaints, other than the complaints that

could not be considered, either by mutual settlement or by issuing an Award.

During the period reviewed, the ratio of complaints disposed by settlement to the

complaints disposed by award was around 99:1 clearly indicating the

effectiveness of the Banking Ombudsmen in arriving at mutually agreed

consensus between bankers and complainants. During the period above, only

40

563 awards were issued which formed less than 2% of the total 49,253

complaints disposed of. From the year 2006-07, the number of awards issued

and the percentage of disposal through award issuance have come down despite

huge increase in the complaints received. Details are as given table below. The

fact that the Banking Ombudsmen could dispose of more than 98% of the

complaints by mutual settlement between the complainant and the concerned

banks to their satisfaction indicates that they took appropriate decisions taking

into consideration all the relevant and extant legal and banking instructions and

practice.

Mode of disposal of complaints

(Other than complaints that could not be considered)

Sr.

No

Year No. of

complaints

disposed

of

Disposal by

award

Disposal by

settlement

41

NO. % No. %

1 2003-2004 3998 121 2.21 3877 97.78

2 2004-2005 5440 165 3.03 5275 96.97

3 2005-2006 14931 146 0.98 14785 99.02

4 2006-2007 21747 84 0.39 21662 99.61

5 2007-2008 29365 70 0.24 29295 99.76

Analysis of Complaints:42

Analysis of Complaints dealt with - Category-Wise

The analysis of complaints received at the Banking Ombudsman

offices includes analysis of subject category of complaints and the bank-groups

against which the complaints were made. Computerization of the functioning of

Banking Ombudsman Offices through the Complaint Tracking Software has

enabled detailed analysis in this regard.

The maximum number of complaints dealt with during the last five-year

period pertained to complaints regarding deposit accounts, deficiency in servicing

of loans and advances and delay in collection of cheques/bills, etc, besides the

miscellaneous complaints. The details are given in the following table:

Analysis of complaints dealt with - category-wise

Category 2002-03 2003-04 2004-05 2005-06 2006-07

Deposit

Accounts

2500

(27%)

250(27%)

(26%)

3239

(27%)

6733

(20%)

5803

(15%)

Loans and

Advances

1651 1226 2291 5251 5151

Collection of

cheques/bills

908

(14%)

1226

(13%)

1245

(19%)

3058

(16%)

4058

(11%)

Others 2158

(38%)

4756

(50%)

5259

(44%)

18357

(55%)

23626

(61%)

43

Total 6506 9483 12034 33363 38638

Category 2002-03 2003-04 2004-05 2005-06 2006-07

However, during the year 2006-07, the maximum number of complaints received

pertained to credit cards at 20%. Complaints pertaining to deposit accounts,

loans and advances and remittances occupied the next three places in the

number of complaints received. The details are shown below.

Complaint received in 2006-07 & 2007-08 category wise

44

COST DETAILS OF RUNNING THE SCHEME

45

Sr.No. Nature of complaint Received during

2006-07 2007-08

1. Deposit accounts 5803 5612

2. Remittances 4058 5213

3. Credit cards 7688 10129

4. Loans and advances - General 4442 5297

5. Loans and advances-Housing 709 757

6. Charges without notice 2594 3740

7. Pension 1070 1582

8. Failure on commitments made 1469 6388

9. DSAs and recovery agents 1039 3128

10. Notes and coins 130 141

11. Others 9636 5900

Total 38638 47887

The costs of the Scheme include the revenue expenditure and capital

expenditure incurred in running the Banking Ombudsman offices. The revenue

expenditure includes the establishment items like salary and allowances of the

staff attached to Banking Ombudsman offices and non-establishment items such

as rent, taxes, insurance, law charges, postage and telegram charges, printing

and stationery expenses, publicity expenses, depreciation and other

miscellaneous items. The capital expenditure items include the furniture,

electrical installations, computers/related equipments, telecommunication

equipments and motor vehicle.

period Total cost (Rs.Cr) No.of

complaints dealt

Cost per

complaint (Rs)

2003-04 7.03 9,483 7,413

2004-05 7.60 12,034 6,315

2005-06 10.16 33,363 3,045

2006-07 9.81 38,638 2,538

2007-08 12.50 47,887 2,611

CHAPTER-446

DIFFERENCE BETWEEN BANKING OMBUDSMAN SCHEME

1995, 2002 & 2006

The Ombudsman’s task is to provide citizens with a means of redress for

maladministration. By performing this role, the Ombudsman helps, first, to relieve

the burdens of litigation by promoting friendly settlement and making

recommendations to avoid the need for proceedings in courts; and second, to

promote the effective implementation of citizen's rights. The Ombudsman is

impartial and has a conciliatory approach.

In India, any person whose grievances against a bank are not resolved to

his satisfaction by that bank within a period of two months then he can approach

the Banking Ombudsman for redressal. This is however subject to the complaint

pertaining to any of the matters specified in the Banking Ombudsman Scheme.

Reserve Bank of India (RBI) which assumes the role similar to that of

quasi-legal machinery as it is established by a competent authority to provide for

an additional but optional legal remedy for effective, expeditious and inexpensive

redressal of customer grievances. Towards effective compliance of this optional

legal remedy it introduced the Banking Ombudsmen Scheme in 1995 and got it

further amended in 2002 and in 2006.

The Reserve Bank of India notified the revised Banking Ombudsman

Scheme, 2006 which came into effect from January 1, 2006. The new scheme

widens its scope thereby to include customer complaints on certain areas like

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 the individual

banks. It is made applicable to all commercial banks, regional rural banks and

scheduled primary cooperative banks whose principal place of business is in

India.

47

The Revised Scheme with well-equipped staff is wholly funded by the

Reserve Bank of India. This new scheme allows the complainants to file a

complaint in any form, including online and the bank customers are entitled to file

an appeal with the Reserve Bank of India. It provides a forum for bank customers

for redressal of their common complaints against banks. On the basis of the new

Banking Ombudsman Scheme, 2006 the customers are also privileged to

complain about non-payment or any inordinate delay in payments or collection of

cheques towards bills or remittances by banks, as also non acceptance of small

denomination notes and coins or charging of commission for acceptance of small

denomination notes and coins by banks. The Banking Ombudsmen currently

have their offices in 15 centers covering the entire country.

Is the New Banking Ombudsman Scheme 2006 differs from its

previous schemes?

The vision behind the emergence of Banking Institution is to evolve into a strong,

sound and globally competitive financial system, providing integrated services to

customers from all segments, leveraging on technology and human resources,

adopting the best accounting and ethical practices and fulfilling corporate and

social responsibilities towards all stakeholders. As a part of this vision, the RBI

lodged various Ombudsman schemes till today which forms a part of our

discussion.

Yes, the new scheme 2006 differs from its previous schemes. The extent and

scope of the scheme, 2006 is much wider than its earlier schemes of 1995 and

2002. Because the new scheme introduces for the first time;

Includes complaints relating to credit cards, deficiencies in providing the

without prior notice to the customers and non-compliance of promised

services by banks and its marketing agents, levying of service charges

fair practice codes by the banks;

48

Facilitates the submission of complaints through online;

Establishes an appellate authority to facilitate appeals against the awards

rendered by the Banking Ombudsmen instead of filing with the Review

Authority for review of such awards.

The extent and scope of the new Scheme is wider than the earlier Scheme of

2002. The new Scheme also provides for online submission of complaints. The

new Scheme additionally provides for the institution of an 'appellate authority' for

providing scope for appeal against an award passed by the Ombudsman both by

the bank as well as the complainant.

In exercise of the powers conferred by Section 35A of the Banking

Regulation Act, 1949 and in partial modification of its Notification dated

December 26, 2005, Reserve Bank of India hereby amends the Banking

Ombudsman Scheme 2006 to the extent specified in the Annex hereto. The

Reserve Bank hereby directs that all commercial banks, regional rural banks and

scheduled primary co-operative banks shall comply with the Banking

Ombudsman Scheme, 2006 as amended hereby. The amendments in the

Scheme shall come into force from January 1, 2006.

AMENDMENT PASSED BY RBI FOR THE CHANGES IN

BANKING OMBUDSMAN SCHEME, 2006:

Amendment 1:

RBI expands Scope of Banking Ombudsman Scheme; Includes Fair

Banking Practices.

Date: 26 Dec 2005

The Reserve Bank of India today announced the revised Banking

Ombudsman Scheme with enlarged scope to include customer complaints on

certain new areas, such as, credit card complaints, deficiencies in providing the

49

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. Applicable to all commercial banks, regional rural

banks and scheduled primary cooperative banks having business in India, the

revised scheme will come into effect from January 1, 2006.

In order to increase its effectiveness, the revised Banking Ombudsman

Scheme will be fully staffed and funded by the Reserve Bank instead of the

banks. Under the revised Banking Ombudsman Scheme, the complainants will

be able to file their complaints in any form, including online. The bank customers

would also be able to appeal to the Reserve Bank against the awards given by

the Banking Ombudsman.

The new scheme provides a forum to bank customers to seek redressal of

their most common complaints against banks, including those relating to credit

cards, service charges, promises given by the sales agents of banks, but not

kept by banks, as also, delays in delivery of bank services. The bank customers

would now be able to complain about non-payment or any inordinate delay in

payments or collection of cheques towards bills or remittances by banks, as also

non- acceptance of small denomination notes and coins or charging of

commission for acceptance of small denomination notes and coins by banks.

The Reserve Bank had first introduced the Banking Ombudsman Scheme in

1995 to provide expeditious and inexpensive forum to bank customers for

resolution of their complaints relating to deficiency in banking services. The

Scheme was revised in 2002 mainly to cover Regional Rural Banks and to permit

review of the Banking Ombudsmen’s awards against banks by the Reserve

Bank. The Banking Ombudsmen currently have their offices in 15 centers.

The Reserve Bank is also in an advanced stage of setting up an independent

Banking Codes and Standards Board of India to ensure that comprehensive code

of conduct for fair treatment to customers are formulated by banks and adhered

50

to. The Reserve Bank of India had announced setting up of the Board in its

Annual Policy for 2005-2006 announced by the Governor, Dr Y V Reddy in April

2005.

Amendment 2:

Customers can now appeal against the Banking Ombudsman's Decision.

Date: 24 May 2007

Bank customers can now appeal against the decision of the Banking

Ombudsman where he has rejected the customer's complaint relating to matters

falling within the grounds of complaints specified under the scheme. The Reserve

Bank of India has amended the Banking Ombudsman Scheme, 2006 to enable

the customers to appeal against the Banking Ombudsman's decision. The

amendments are available on the RBI website. Before the scheme was

amended, the bank customers could appeal only against the awards given by the

Banking Ombudsman. The appellate authority for the Banking Ombudsman

Scheme is the Deputy Governor of Reserve Bank of India.

It may be recalled that in the Annual Policy for 2007-2008, the Reserve

Bank had announced that based on customer feedback, it would amend the

Banking Ombudsman Scheme, 2006 to extend the appeal option also to the

decisions of the Banking Ombudsman.

Originally introduced in 1995, the Banking Ombudsman Scheme enables

speedy and cost effective resolution of complaints of bank customers relating to

deficiency in bank services. The Scheme now covers all Scheduled Commercial

Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks. The

customers can also now complain to the Banking Ombudsman against deficiency

in almost any banking services, including credit cards, after exhausting the

channel available with the bank concerned for resolving their complaints. The

Reserve Bank has appointed 15 Banking Ombudsmen who are located mostly in

51

State Capitals under the Scheme. The Banking Ombudsman tries to resolve the

complaint through conciliation or mediation and even passes an award if it is not

resolved through such settlement.

52

CHAPTER - 5

A Brief Profile of the Canara Bank

Widely known for customer centricity, Canara Bank was founded by Shri

Ammembal Subba Rao Pai, a great visionary and philanthropist, in July 1906, at

Mangalore, then a small port in Karnataka. The Bank has gone through the

various phases of its growth trajectory over hundred years of its existence.

Growth of Canara Bank was phenomenal, especially after nationalization in the

year 1969, attaining the status of a national level player in terms of geographical

reach and clientele segments. Eighties was characterized by business

diversification for the Bank. In June 2006, the Bank completed a century of

operation in the Indian banking industry. The eventful journey of the Bank has

been characterized by several memorable milestones. Today, Canara Bank

occupies a premier position in the comity of Indian banks. With an unbroken

record of profits since its inception, Canara Bank has several firsts to its credit.

These include:

Launching of Inter-City ATM Network

Obtaining ISO Certification for a Branch

Articulation of ‘Good Banking’ – Bank’s Citizen Charter

Commissioning of Exclusive Mahila Banking Branch

Launching of Exclusive Subsidiary for IT Consultancy

Issuing credit card for farmers

Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to

emerge as a major 'Financial Conglomerate' with as many as nine

53

subsidiaries/sponsored institutions/joint ventures in India and abroad. As at June

2010, the Bank has further expanded its domestic presence, with 3057 branches

spread across all geographical segments. Keeping customer convenience at the

forefront, the Bank provides a wide array of alternative delivery channels that

include over 2000 ATMs- one of the highest among nationalized banks- covering

732 centres, 2681 branches providing Internet and Mobile Banking (IMB)

services and 2091 branches offering 'Anywhere Banking' services. Under

advanced payment and settlement system, all branches of the Bank have been

enabled to offer Real Time Gross Settlement (RTGS) and National Electronic

Funds Transfer (NEFT) facilities.

Not just in commercial banking, the Bank has also carved a distinctive

mark, in various corporate social responsibilities, namely, serving national

priorities, promoting rural development, enhancing rural self-employment through

several training institutes and spearheading financial inclusion objective.

Promoting an inclusive growth strategy, which has been formed as the basic

plank of national policy agenda today, is in fact deeply rooted in the Bank's

founding principles. "A good bank is not only the financial heart of the community,

but also one with an obligation of helping in every possible manner to improve

the economic conditions of the common people".

These insightful words of our founder continue to resonate even today in

serving the society with a purpose. The growth story of Canara Bank in its first

century was due, among others, to the continued patronage of its valued

customers, stakeholders, committed staff and uncanny leadership ability

demonstrated by its leaders at the helm of affairs. We strongly believe that the

next century is going to be equally rewarding and eventful not only in service of

the nation but also in helping the Bank emerge as a "Global Bank with Best

Practices". This justifiable belief is founded on strong fundamentals, customer

centricity, enlightened leadership and a family like work culture.

54

Canara Bank customers can now post complaints on consumer Web sites:

Addressing complaints

“Our customer service cell will be the monitoring wing of the bank,” he said.

According to him, most complaints are regarding ATM cards, delay in sanctioning

housing loans, delay in transfer of accounts and pension-related issues.

There are about three complaints a day now, he pointed out, adding that the

bank will try to solve issues with a 72-hour turnaround time. The centralised

customer service cell currently has three members, in addition to separate cells

in each circle office of the bank.

“The six sites that we have identified are not exhaustive, and the circle should

monitor such other sites for taking further action on matters regarding our bank,”

said Mr Pai, adding, “We are in a services industry, and the attempt is to

convince the customer that we are sensitive to their requirements.”

Interaction with customer

Customer's expectation/requirement/grievances can be better understood

through personal interaction with customers by Bank's staff. Structured customer

meets will give a message to the customers that the bank cares for them and

values their feedback/suggestions for improvement in customer service. Many of

the complaints arise on account of lack of awareness among customers about

bank services and such interactions will help the customers appreciate the

banking services better. The feedback from customers would be a valuable input

for revising our product and services to meet customer requirements.

55

Sensitizing the operating staff on handling complaints

Our staff will be properly trained for handling complaints. During all the Training

Sessions at our Apex Staff Training College and Regional Staff Training Colleges

the importance of handling complaints is explained to all the participants and they

are trained to deal with customer complaints. Nodal Officer for the Bank will

ensure that internal machinery for handling complaints/grievances operates

smoothly and efficiently at all levels and he will be giving feed back on training

needs of staff at various levels to the Human Resources Department.

Canara Banking scheme :

a. We have displayed on our website and in all our Branches a notice

explaining that we are covered by the Banking Ombudsman Scheme,

2006 of the Reserve Bank of India . The copy of the scheme is made

available at all the branches and will be issued to customers at a nominal

charge.

b. Within 30 days of lodging a complaint with us, if customer does not get a

satisfactory response from us and if customer wishes to pursue other

avenues for redressal of grievances, customer may approach Banking

Ombudsman appointed by Reserve Bank of India under Banking

Ombudsman Scheme, 2006. Salient features of the Banking Ombudsman

Scheme, 2006 are displayed in the branch notice boards and the scheme

itself is displayed on our Website www.canarabank.com. If customers face

any difficulty our Staff will explain the procedure in this regard.

Internal Machinery to handle customer complaints/grievances

56

http://www.canarabank.com/english/scripts/www.canarabank.com

a. If the customer wants to make a complaint, we will inform :

Where to make complaint

How a complaint should be made

When to expect a reply

Whom to approach for redressal

What to do if customers are not happy about the outcome

b. The Bank will inform customers where to find details of procedures for

handling complaints fairly and quickly.

c. If the customer complaint is received in writing, we will endeavour to send

an acknowledgement/a response within a week. If customer complaint in

relayed over phone at our designated telephone helpdesk or customer

service number we shall provide a complaint reference number and keep

customers informed of the progress within a reasonable period of time.

d. After examining the matter, we will send our final response or explain why

we need more time to respond and shall endeavour to do so within 30

days of receipt of complaint and will tell customers to take their complaint

further if they are still not satisfied.

COMPLAINT REDRESSAL MECHANISM IN CANARA BANK

AT BRACH

Resolution of graveness

Branch Manager will be responsible for the resolution of the

complaints/grievances in respect of customer's service by the Branch. He/she

would be responsible for ensuring closure of all complaints received at Branches.

57

It is his/her foremost duty to see that the complaint should be resolved

completely to the customer's satisfaction and if the customer is not satisfied, then

he shall be provided with alternate avenues to escalate * the issue if the same is

not resolved within the stipulated period. If the Branch Manager feels that is not

possible at his/her level to solve the problem he/she may refer the case to

Regional or Circle Office or Head Office for guidance.

Similarly, if Regional Office/Circle Office finds that they are not able to

solve the problem such cases may be referred to the Nodal Officer of the Bank.

Suggestion Box and complaint Book are provided in all the branches. Any written

complaint is instantly and promptly acknowledged.

All branches other than small branches have " May I help you counters ".

Counter staff are provided with training and additional inputs.

If counter staff/Supervisor is unable to resolve a grievance, the branch in-

charge intervenes and tries to resolve the issue.

Customers' Day is observed on 15 th of every month. On this day branch

in-charge will make himself available at the branch between 3 p.m. and 5

p.m. to meet customers without any prior appointment.

Customer Service Committee meetings is held every month at all

Branches, Circle Offices. The sole task of the

Committee is to find out ways and means to render service to the

satisfaction of the Customers. For this purpose

Committee will meet regularly at stipulated intervals to discuss in detail the

strengths and deficiencies of the services presently rendered and take

steps to improve it.

Special Customers' Meet is conducted on special occasions.

Every year, Customer Fortnight is observed to create awareness among

Public as well as staff for achieving the objective of Complaint free branch

network and also highlight our products and services.

58

AT REGIONAL OFFICE/CIRCLE OFFICE

Divisional Manager / Assistant General Manager hold exclusive charge of

Customer Service Section at Regional Office/Circle office.

By and large, complaints are redressed within shortest possible time.

Whenever it is not possible and more cross checking is required, steps are

taken to settle the matter within a reasonable time.

Divisional Managers(O) / Assistant General Manager(O) visit branches

periodically and submit a report on Customer Service, as per the detailed

checklist

Divisional Manager / Assistant General Manager in-charge of Customer

Service Section, Regional office / Circle Office contact the aggrieved

customers as and when necessary, meet him personally with the Branch

Manager, for

ensuring timely redressal of the complaint.

Wherever deficiencies are noticed, accountability is fixed and erring

employees punished.

Still there may be some aggrieved customers who write to Head office.

AT HEAD OFFICE

A full-fledged Customer Service Section is functioning at M&CRM Wing,

Head Office, overseen by General Manager.

An acknowledgement is sent to the customer immediately on receipt of the

complaint.

Thorough analysis of the complaints is done and necessary instructions

are given to CO/RO/ Branches for speedy redressal and followed up till

final redressal letter is sent to the complainant duly explaining the decision

taken on the complaint.

59

On 15 th of every month, Customers' Day is observed between 3 p.m. and

5 p.m. during which our overseeing

Executives are available for meeting the public / Customers without prior

appointment.

Special Customers' Meets are organised for different segments of the

market, viz., Exporters, SSI, NRI, Agriculturists, etc..

Customer Satisfaction Surveys through In-house as well as by External

agencies are conducted to assess the level of customer satisfaction.

Grievance Escalation System

Customers can lodge their complaints directly to Branch-in-charge and it

will be the responsibility of the Branch-in-charge to resolve the complaint

within 7 days from the date of receipt.

The Branch-in-charge will analyse the complaint and if need be he/she will

contact the complainant personally and resolve the complaint.

A complaint redressal letter will be sent to complainant, if the complaint is

resolved at Branch level. The Branch will also send the details of the

grievance received by the at periodical intervals to Regional Office/Circle

Office.

If the Branch-in-charge is not able to resolve the complaint within 7 days,

the complaint will be referred by the Branches to the concerned Regional

Office/Circle along with their comments / replies for further action.

The complaints referred to Regional Office/Circle Office will be analysed

by Customer Service Section and based on the explanation received from

the Branch, RO/CO will send a suitable reply to complainant.

If the reply received from the Branch is not satisfactory and if Regional

Office/Circle Office cannot resolve the complaint within 7 days from the

date of receipt of complaints, the same will be referred to Customer

Service Section, Head Office along with their comments/explanations. The

60

Regional Office/Circle Office will also send the details of the complaints

received directly by them and not settled within seven days to Customer

Service Section, Head Office along with their comments/replies.

Customer Service Section, Head Office will analyse the complaint and the

replies received from Branch and Regional Office/Circle Office. On placing

the matter before appropriate authorities a decision is taken on the

complaint. A complaint redressal letter is sent to the complainant from

Head Office and suitable instruction are passed on to Branch, Regional

Office, Circle Office for taking action in the deficient areas.

COMPLAINTS/ GRIEVANCES

Customer Service Committee of the Board

This sub-committee of the Board would be responsible for formulation of a

Comprehensive Deposit Policy incorporating the issues such as the treatment of

death of a depositor for operations of his account, the product approval process

and the annual survey of depositor satisfaction and the tri-enniel audit of such

services. The Committee would also examine any other issues having a bearing

on the quality of customer service rendered. This Committee would also review

the functioning of Standing Committee on Customer Service. The Customer

Service Committee of the Board is responsible for the rendering of customer

service to the individual, both as a depositor and also as a borrower. The

Committee is, therefore, responsible for examining loan policies and service

issues for the individual as a borrower also.

Standing Committee on Customer Service

The Standing Committee on Customer Service will be chaired by the Managing

Director/ Executive Director of the Bank. Besides two to three senior executives

61

of the bank, the committee would also have two to three eminent non-executives

drawn from the public as members. The committee would have the following

functions.

Evaluate feed-back on quality of customer service received from various

quarters. The committee would also review comments/feed-back on

customer service and implementation of commitments in the Code of

Bank’s Commitments to Customers received from BCSBI.

The Committee would be responsible to ensure that all regulatory

instructions regarding customer service are followed by the bank. Towards

this, the committee would obtain necessary feed-back from zonal/regional

managers/ functional heads.

The committee also would consider unresolved complaints/grievances

referred to it by functional heads responsible for redressal and offer their

advice.

The committee would submit report on its performance to the customer

service committee of the board at quarterly intervals.

TIME FRAME

Complaints received will be seen in right perspective and will be analyzed from

all possible angles. Specific time schedule is set up for handling complaints and

disposing them at all levels including branches/Regional Offices/Circle Offices

and Head Office. The Branch Manager will try to resolve the complaint within

specified time frames decided by the Bank.

62

TIME SCHEDULE FOR REDRESSAL OF COMPLAINTS

Stipulated by MOF Adopted by bank

General Complaints 30 days 21 days

Complaints forwarded

by RBI/MOF

MPs/VVIPs

21 days 15 days

Complaints from PMs

office

15 days 7 days

63

CHPTER – 6

CASE STUDY

COMPENDIUM OF CASE HANDLED BY THE BANKING

OMBUDSMAN OFFICE

SUBJECT: Refusal to Close the Account

Complaint No. 1

Complaint in brief:

‘X’ the complainant, had issued cheque dated 20.10.2004 for

Rs.5,00,000/- (Rupees Five lakhs only) to their supplier and mentioned the

supplier’s account No. on the reverse side of the Cheque. The cheque was

deposited in the drop box of ABC Bank, on 22.10.04 at about 10.30 a.m. The

cheque was taken out of the drop box by a miscreant who opened current

account in the name of the supplier with Y Bank on 24.10.04 (Sunday). As per

the records of Y Bank, the supplier was a proprietary concern owned by one

Mr.Z. The bank contended that the opening of account was supported by proof of

addresses submitted by the customer. Thus the account was duly introduced

with sufficient proof of address.

Y Bank confirmed having observed the KYC norms.

Decision by ombudsman

The person giving introduction should be of some standing and have an

accountwith the bank for at least six months to ensure that the accounts are not

opened on the introduction of new account holders or persons having small and

marginal balances. In the instant case, the introducer’s account was less than 6

monthsold. There is no record to show that efforts were made to verify the

authenticity of the existence of account opened firm.

In the case of Kerala State Co-operative Marketing Federation vs State Bank of

India and others, the Supreme Court of India has spelt out the principles

64

governing the liability of a collecting banker are:

As a general rule the collecting banker shall be exposed to his usual liability

under common law for conversion or for money had and received, as against the

“true owner” of a cheque/draft, in the event the customer from whom he collects

the cheque or draft has no title or a defective title. The banker, however, may

claim protection from such normal liability provided he fulfils strictly the conditions

laid down in Section 131 or Section 131A of the Negotiable Instruments Act,

1881, and one of those conditions is that he must have received the payment in

good faith and without negligence. It is the banker seeking protection who has on

his shoulders the onus of proving that he acted in good faith and without

negligence.

Negligence is a question of fact and what is relevant in determining the

liability ofa collecting banker is not his negligence in opening the account of the

customer but negligence in the collection of the relevant cheque unless, of

course, the opening of the account and depositing of the cheque in question

therein form part and parcel of one scheme as where the account is opened with

the cheque in question or deposited therein so soon after the opening of the

account as to lead to an inference that depositing the cheque and opening the

account were interconnected moves in an integrated plan.

Negligence in opening the account such as failure to fulfil the procedure

for opening an account which is prescribed by the bank itself or opening an

account of an unknown person or non existing persons or with dubious

introduction may lead to a cogent, though not conclusive, proof of negligence

particularly if the cheque in question has been deposited in the account soon

after the opening

thereof.

It may be noted that Y Bank opened the account in the name of the supplier

on 24th October 2004. The cheque for Rs.5,00,000 issued by the complainant

was deposited in the account on 25,10.2004. The value of the cheque was

credited on 27.10.2004. Rs.3,00,000 was drawn in the morning of 29.10.2004

65

and Rs.1,80,000 drawn in the afternoon. The Y Bank was negligent in opening

the account in the name of the complainant allowing the depositor to immediately

draw Rs.4,80,000/- out of Rs.5,00,000/-. The account was introduced by a

person who did not have account with the branch for a minimum period of six

months as per guidelines of RBI.

The address of the account holder in the driving

license was left blank. Y Bank was found to be deficient in opening the current

account without proper introduction and verification, thereby enabling the account

holder to open the account, deposit the cheque and draw major portion of the

cheque proceeds in quick succession.

Complaint No. 2

Complaint in brief:

The complainant having a savings bank account with the subject bank

found thatthere was an unauthorized debit of Rs. 15000 in his account. On

enquiry with thebank, they informed that it purported to the ATM transactions

made by him. The complainant claimed that he had not withdrawn any amount

on that day. The debits were made by the bank after six months without

intimation to the complainant. The complainant requested to restore the

unauthorized debit made

by the bank.


The Banking Ombudsman perused the documentary evidence for ATM

transactions produced by the bank, which contained the ATM card number and

his account number. As nobody other than the card holder can operate the ATM

and withdraw money, his argument that he was not aware of the ATM

transactions made by him cannot be accepted. The Banking Ombudsman

advised the bank to explain the position to the complainant to his satisfaction

along with the documentary evidence and the complainant was advised that on

the basis of the documentary evidence for ATM transactions provided by the

66

bank, the card holder has undoubtedly made the three ATM cash withdrawals of

Rs,.5000/- each.

Complaint No. 3

Complaint in brief:

The complainant was having a Saving Bank Account. with the opposite party

bank. Being an employee of TCS, his salary and other allowances were being

directly credited to his account with the bank. He alleged that the bank had

issued a cheque-book without his knowledge to someone else and had passed

cheques which were not drawn by him. The total amount so fraudulently

withdrawn from his account amounted to Rs.977,000/-. A police complaint was

also filed.


The subsequent developments after filing of the police complaint and the

opiniongiven by the GEQD, leads to an irrefutable conclusion that the culprits

had made fraudulent withdrawals by forging the signature of the complainant. In

the circumstances, prima facie forgery had been established. Legally if the

drawer’s cheque is forged or unauthorised, however clever the forgery is, the

banker cannot debit his customer’s account in case he pays the sum unless he

establishes adoption or estoppel. The complainant was out of India during the

material time. The bank could not bring out any evidence/proof that the

complainant was in any way connected with the fraud or his involvement in the

forgery.

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FORM OF COMPLAINT (TO BE LODGED) WITH THE BANKING

OMBUDSMAN

(TO BE FILLED UP BY THE COMPLAINANT)

To:

The Banking Ombudsman

Place of BO’s office…………………………..

Dear Sir,

Sub: Complaint against …………………….(Name of the bank’s branch) of

…………………………………………………………………………………(Name of

the 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 …………………….

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3. Complaint against (Name and full address of the branch/bank)

………………………….

Pin 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 the Scheme)

…………………………………………………………………………………………

7. Details of the complaint:

(If space is not sufficient, please enclose separate sheet)

………………………………………………………………………………………………

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8. Whether any reply (Within a period of one month after the bank concerned

received the representation) has been received from the bank? Yes/ No

( if yes, please enclose a copy of the reply )

9. Nature of Relief sought from the Banking Ombudsman

………………………………………………………………………………

( Please enclose a copy of documentary proof, if any, in support of your claim )

10. Nature and extent of monetary loss, if any, claimed by the complainant by

way of compensation (please refer to clauses 12 (5) & 12 (6) of the Scheme) Rs.

……………….

11. List of documents enclosed:

(Please enclose a copy of all the documents )

12. Declaration:

(i) I/ We, the complainant/s herein declare that:

a) the information furnished herein above is true and correct;

and

b) I/We have not concealed or misrepresented any fact stated in the above

columns and in the documents submitted herewith.

(ii) The complaint is filed before expiry of period of one year reckoned in

accordance with the provisions of Clause 9(3)(a) and (b) of the Scheme.

(iii) The subject matter of the present complaint has never been brought before

70

the Office of the Banking Ombudsman by me/ us or by any of the parties

concerned with the subject matter to the best of my/ our knowledge.

(iv) The subject matter of the present complaint has not been decided by/pending

with any forum/court/arbitrator.

(v) I/We authorise the bank to disclose any such information/ documents

furnished by us to the Banking Ombudsman and disclosure whereof in the

opinion of the Banking Ombudsman is necessary and is required for redressal of

our complaint.

(vi) I/We have noted the contents of the Banking Ombudsman Scheme, 2006.

Yours faithfully,

(Signature of Complainant)

NOMINATION – (If the complainant wants to nominate his representative to

appear and make submissions on his behalf before the Banking Ombudsman or

to the Office of the Banking Ombudsman, the following declaration should be

submitted.)

I/We the above named complainant/s hereby nominate

Shri/Smt………………………………………….. who is not an Advocate and

whose address is

………………………………………………………………………………………………

……………………… ………

as my/our REPRESENTATIVE in all proceedings of this complaint and confirm 71

that any statement, acceptance or rejection made by him/her shall be binding on

me/us. He/She has signed below in my presence.

ACCEPTED

(Signature of Representative)

(Signature of Complainant)

Note: If submitted online, the complaint need not be signed

72

CONCLUSION

Though the Banking Ombudsman Scheme was introduced in the year

1995, with a view to do away with the banking customer complaints, the scheme

was amended in subsequent years of 2002 and 2006. But the banks do not seem

to have adopted the norms for their efficient functioning, that is the reason behind

the increasing consumer cases against the banks, which are governed under the

scheme.

In the system of Banking Ombudsman, the results are delivered very

soon, the procedures are fair together with cost, and proportionate to the nature

of the issues involved. The system deals with cases at reasonable speed, is

understandable to those who use it, is responsive to the needs of those who use

it, and provides as much certainty as the nature of particular cases allows. This is

true because over the past five years nearly 36000 complaints are being

resolved by the Banking Ombudsman under this Banking Ombudsman Scheme.

Though the Banking Ombudsman is eligible enough to deliver the bank customer

complaints at the earliest yet the Consumer Redressal Forum/Commission is

being taken resort of by most of the bank customers for their redressal of

grievances with the bank.

The reason is they are well popular among the common public which is

lacking with the banking ombudsman and its working. Definitely the Scheme

needs popularity in the society for its more appropriateness and effectiveness so

that the aggrieved bank customer with the services of the bank prefers to knock

the door of the banking ombudsman for redressal. The scheme should provide

more powers and levy more duties on the banking ombudsman so that they can

easily be approachable by the aggrieved bank customer.

73

BIBLOGRAPHY

http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=159

http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=11113#2

http://www.nos.org/Secbuscour/25.pdf

http://www.indbank.com/ombudsman.htm

http://www.ucobank.com/ombudsman.htm

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