Banking Ombudsman

The Banking Ombudsman, a quasi-judicial body, was established with the goal of resolving customer complaints. The Banking Ombudsman Act/Scheme is governed by Section 35A of the Banking Regulation Act of 1949. The Banking Ombudsman Scheme 2006 was established in 1995 and is now in operation. Scheduled Commercial Banks, Regional Rural Banks, and Scheduled Primary Co-operative Banks are all covered under the plan. The RBI recently expanded the concept of a Banking Ombudsman to include NBFCs.

Types Of Complaints Lodged With The Banking Ombudsman

Customers who are dissatisfied with their banking services can file complaint Banking Ombudsman complaint.

• Non-payment or unjustifiable delays in the payment/collection/issuing of checks, draughts, bills, and other financial instruments; 
• Non-acceptance of small denomination notes and coins offered for any purpose without proper reason, and the imposition of a commission; 
• Inward remittances that are not paid or are paid late; 
• Non-compliance with established working hours; 
• Delay or failure by the Bank to supply any financial facility (other than loans and advances) that was promised in writing. 
• With respect to the rate of interest on bank deposits, delays/non-credit of proceeds to respective parties’ accounts, non-payment of deposit, or non-observance of RBI instructions
• NRIs with accounts in India have complained about their remittances from overseas, deposits, and other bank-related issues.

Refusal to open deposit accounts without providing a good explanation

• Imposing fees without providing proper warning to the customer
• The bank’s or its subsidiaries failure to follow RBI instructions on ATM, Debit Card, Prepaid Card, and Credit Card operations in India.
• In India, non-compliance with RBI instructions on mobile banking and electronic banking services. 
• Non-disbursement or a delay in the disbursement of a pension (to the degree that the grievance can be traced back to the bank’s actions, but not to its employees); 
• Refusal or delay in taking tax payments as requested by the Reserve Bank/Government; 
• Failure or delay in issuing, servicing, or redeeming government securities; 
• Forced closure of deposit accounts without prior notification or adequate justification; 
• Accounts that are refused to be closed or are delayed in being closed
• Not adhering to the bank’s adopted fair practises code; 
• Banks’ failure to follow Reserve Bank guidelines on the use of recovery agents; 
• Banks’ failure to follow RBI requirements on allied-banking operations such as the sale of insurance, mutual funds, and other financial goods. 
• Any other issue relates to RBI directives not being followed

Procedure Of Filing A Complaint With Banking Ombudsman 

To begin with, there is no charge for making a complaint with the Banking Ombudsman. Online, you can file a complaint with the Banking Ombudsman. 

Points To Remember

• The amount of compensation (award) provided by the bank to the complainant (the person filing the complaint) as compensation for any loss caused by the complainant is limited to the lesser of the following amounts: 

• Losses incurred as a result of the Bank’s actions or omissions. 
• 20 lakhs rupees

• In cases of mental anguish and harassment, the Banking Ombudsman has the authority to pay the complaint compensation up to Rs. 1 lakh. The Banking Ombudsman will take the following criteria into account when making an award (paying compensation). 

• The complaint has squandered his time. 
• Complainant’s out-of-pocket expenses 
• The complainant’s harassment and emotional anguish 

• The Banking Ombudsman will attempt to resolve the issue through conciliation (agreement) between the aggrieved parties after receiving the complaint. If a complaint is not resolved through negotiation within a month, the Ombudsman will issue an award. Prior to doing so, the complainant and the Bank are given a reasonable opportunity to be heard. 
• If a person is dissatisfied with the Banking Ombudsman’s decision, they have the option of filing an appeal with the Appellate Authority within 30 days of receiving the award. Furthermore, if the Appellate Authority is satisfied, a 30-day extension may be granted.

Conclusion 

As of 2015, Banking Ombudsman handles practically all types of banking-related complaints. In 2009-2010, the team received 79,266 complaints, of which around 94 percent were resolved, with only 5-6 percent remaining unresolved for more than a quarter of a year. In India, there are currently 15 Banking Ombudsman. Customers can file a complaint with the BO in the region where their bank is located.