Banking
Ombudsman
Scheme
Presented By-
Ashlesha Verma
Anam Siddiqui
Archana Singh
Banking Ombudsman
Contents
covered in this BOS,2006
Presentation
Eligible Complaints
Procedure
Settlement
Awards
Rejection
Appellate Authority
Highlights
Conclusion
Banking Ombudsman is a senior
official appointed by the Reserve Bank of
India(RBI) or a quasi (nominal) judicial
authority functioning under India’s Banking
Ombudsman Scheme 2006. Banking
Ombudsman has the responsibility to resolve
customer complaints against deficiency in
banking services. At present, there are 21
regional offices of Banking Ombudsman in
India. The latest offices are opened in Jammu
& Raipur.
Issues faced by Public
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.
Further, under the new scheme, the governance
and operations is fully staffed and funded by the
Reserve Bank instead of the banks.
The RBI has launched an ombudsman scheme to
tackle frauds associated with digital transactions in
December 2018.
The scheme is introduced to facilitate the satisfaction
or settlement of complaints regarding digital
transactions undertaken by customers of system
participants as defined under the scheme.
The scheme, launched under Section 18 of the
Payment and Settlement Systems Act, 2007, will
provide a cost-free and expeditious complaint
redressal mechanism related to deficiency in
customer services in digital transactions conducted
through non-banking entities regulated by the RBI.
The offices of Ombudsman for Digital Transactions
(ODT) will function from the existing 21 offices of the
Banking Ombudsman, and will handle complaints of
customers from their respective territorial
jurisdiction.
The scheme provides for an appellate mechanism,
under which the complainant, or system participant,
has the option to appeal against the decision of the
ombudsman before the appellate authority.
Ever since demonetisation, digital transactions,
including mobile wallets and UPI, have seen a rapid
growth as of July,2019.
Complaints
Non-payment or delay in the payment of inward
remittances or collection of cheques, drafts, bills,
etc.
Non-acceptance, without sufficient cause, of small
denomination notes or coins tendered for any
purpose and for charging of commission for this
service
Failure to issue or delay in issue, of drafts, pay
orders or bankers’ cheques
Closure of account without customer concern
Refusal to close or delay in closing the accounts.
Non-adherence to the fair practices code as
adopted by the bank; and
Financial loss incurred to customer due to wrong
information given by bank official
other matter relating to the violation of the
directives issued by the Reserve Bank in relation to
banking or other services
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 open deposit accounts without any valid
reason for refusal
Levying of charges without adequate prior notice to
the customer
Forced closure of deposit accounts without due
notice or without sufficient reason.
Refusal to accept or delay in accepting payment
towards taxes, as required by Reserve
Bank/Government
complaints from Non-Resident Indians having
accounts in India in relation to their remittances
from abroad, deposits and other bank-related
matters
Non-adherence to prescribed working hours
Before making a complaint to the Banking
Ombudsman, complainant should make a written
representation to the bank and the bank should have:
Rejected the complaint; or
No reply within a period of 1 month after the bank
received the complainant; or
The complainant is not satisfied with the reply given to
him by the bank.
Complain
The complaint should be made in writing and should
be signed by the complainant or his authorized
representative. In the complaint, the following
information should be clearly stated:
The name and the 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.
The nature and extent of the loss caused to the
complainant and
The relief sought for.
Documents Respective
Bank
Conclusion
As soon as it may be practicable to do, the BO shall
send a copy of the complaint to the branch or
office of the bank named in the complaint, and
endeavour to promote a settlement of the
complaint by agreement between the complainant
and the bank through conciliation or mediation.
For the purpose of promoting a settlement of the
complaint, the BO may follow such procedure as he
may consider just and proper and he shall not be
bound by any rules of evidence.
The proceedings before the BO shall be summary in
nature.
If a complaint is not settled by agreement within a
period of one month from the date of receipt of the
complaint, BO may, after affording the parties a
reasonable opportunity to present their case, pass
an Award or reject the complaint.
The BO shall take into account 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 relevant to the
complaint.
The award shall state briefly the reasons for
passing the award.
The Award passed shall contain the directions, if
any, to the bank for specific performance of its
obligations and, the amount, if any, to be paid by
the bank to the complainant by way of
compensation for any loss suffered by the
complainant, due to bank.
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.
A copy of the Award shall be sent to the
complainant and the bank.
An award shall lapse and be of no effect unless the
complainant furnishes to the bank concerned
within a period of 30 days from the date of receipt
of copy of the Award, a letter of acceptance of the
Award in full and final settlement of his claim.
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, harassment
and mental anguish suffered by the complainant.
not on the grounds of complaint referred to in clause
8 or otherwise not in accordance with sub clause (3)
of clause 9;
beyond the pecuniary jurisdiction of Banking
Ombudsman
requiring consideration of elaborate documentary
and oral evidence
without any sufficient cause;
that it is not pursued by the complainant with
reasonable diligence;
in the opinion of the Banking Ombudsman there is no
loss or damage in the inconvenience caused to the
complainant.
Any person aggrieved by an Award under or rejection
of a complaint for some reasons , may within 30 days
of the date of receipt of communication of Award or
rejection of complaint, prefer an appeal before the
‘Appellate Authority’;
Provided that in case of appeal by a bank, the period
of 30 days for filing an appeal shall commence from
the date on which the bank receives letter of
acceptance of Award by complainant ;
Provided that the Appellate Authority may, if he is
satisfied that the applicant had sufficient cause for
not making the appeal within time, allow a further
period not exceeding 30 days;
Provided further that appeal may be filed by a bank only
with the previous sanction of the Chairman or, in his
absence, the Managing Director or the Executive
Director or the Chief Executive Officer or any other
officer of equal rank.”
The Appellate Authority shall, after giving the parties a
reasonable opportunity of being heard
(a) dismiss the appeal; or
(b) allow the appeal
(c) remand the matter to the Banking Ombudsman for
fresh disposal in accordance with such directions as the
Appellate Authority may consider necessary or proper;
(d) modify the Award and pass such directions as may
be necessary to give effect to the Award so modified; or
(e) pass any other order as it may deem fit.
The 21 Offices of the Banking Ombudsman received
1,63,590 complaints in the year 2017-18 marking an
increase of 24.9% over previous year.
Offices of Banking Ombudsman maintained a
disposal rate of 96.5% as compared to 92.0% in the
previous year.
The major grounds of complaints received during the
year were non-observance of fair practices code
(22.1%), ATM and debit card issues (15.1%), credit
card issues (7.7%), failure to meet commitments
(6.8%), mobile and electronic banking (5.2%).
65.8% of maintainable complaints were resolved by
agreement i.e., through mediation. During the
previous year, the figure stood at 42.4%.
148 Awards were issued by 12 out of the 21
Banking Ombudsman in 2017-18 as compared to
31 Awards issued in the previous year.
The Appellate Authority received 125 Appeals in
the year 2017-18 as compared to 15 Appeals in
the previous year.
The average cost of handling a complaint came
down from Rs 3,626/- in 2016-17 to ₨ 3,504/- in
2017-18 due to increase in efficiency and
economies of scale.
RBI’s SMS handle ‘RBISAY’ was extensively used for
sending text messages on topics such as fictitious
offers of money, secured use of electronic banking
facilities, BO Scheme, etc. An Integrated Voice
Recognition Service facility was also made available to
public by RBI for getting more information on the
above.
