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The Detailed study on RBI’s Banking Ombudsman Scheme, 2006

Banking Ombudsman Scheme

Banking Ombudsman Scheme was introduced by the Reserve Bank of India (RBI) to redress the complaints of customers on certain types of banking services provided by banks and to smooth the progress of the resolution of those complaints.

The scheme was introduced under Section 35A of the Banking Regulation Act of 1949 by RBI with effect from 1995. Afterwards, it is lawfully developed and modified through the introduction of regulations under the Banking Ombudsman Scheme 2006. The latest revision was made in 2017.

Now let’s go ahead and try to understand this unique scheme in detail.

What is the Banking Ombudsman Scheme?

Banking Ombudsman Scheme allows the people to file a complaint to resolve the banking issues

In simple terms, the Banking Ombudsman Scheme is a speedy and economic forum for customers of the bank for resolution of complaints.

Who is Banking Ombudsman (BO)?

BO is a senior official appointed by the Reserve Bank of India (RBI) to redress customer complaints against deficiency in certain banking services.

Banking Ombudsman Scheme

Redressal of complaints under the Banking Ombudsman Scheme

The Banking Ombudsman, a senior official, is appointed by the Reserve Bank of India to redress complaints.

Number of Banking Ombudsman and their location

  • Twenty Banking Ombudsmen have been appointed
  • The offices are located mostly in state capitals.

Banks covered under the Banking Ombudsman Scheme, 2006

Banking Ombudsman Scheme

When can you file a complaint?

You can file a complaint with the Banking Ombudsman:

  • If the reply is not acknowledged from the bank within one month after you file a complaint with it
  • If the bank discards the complaint, or
  • If you are not happy with the reply given by the bank.

What kind of grounds can be used to file a complaint?

The Complaints filed can be related to:

Banking Ombudsman Scheme

Banking services

Banking Services
  1. In relation to operation in any savings, current account or to any other account with the bank such as delays in credit proceeds to complainant’s account.
  2. In relation to refusal to open deposit accounts with any valid reason for the refusal.
  3. Non-payment or delay in payment or collection of cheque, draft or a bill.
  4. Levy of charges without prior notice to the customer.
  5. Claims in respect of unauthorized or fraudulent withdrawals from deposit accounts or fraudulent encashment of a cheque.
  6. Non-acceptance of small denomination notes without sufficient cause.

Loans and advances from the bank

Loans and Advances
  1. Delay in sanction, disbursement within a prescribed time on disposal of a loan application.
  1. Non-sanctioning of loans without giving reasonable grounds in writing.
  2. Not following directives of RBI on interest rates

Services of Online Banking and Debit Cards

Online Banking
  1. Account debited but cash not shown in the ATM.
  2. Amount debited more than once for one withdrawal in ATMs or for POS transaction.
  3. Less/Excess amount of cash dispense by ATMs.
  4. Debit in the account without the use of card or details of the card.
  5. Use of stolen/cloned cards.

Non-Compliance of RBI Directions

Any other non – compliance of RBI Directions by the Banks will also be covered.

Your complaint will not be considered by the Ombudsman if:

  • You have not approach your bank for redressal of grievance first
  • You have not made the complaint within one year from the date of receipt of the reply of the bank or if no response is received
  • If the Complaint to Banking Ombudsman is made after the lapse of more than one year and one month from the date of complaint made to the bank.
  • The subject matter of the complaint is awaiting for disposal or has already been deal with at any other forum like the court of law, consumer court etc.
  • Frivolous complaints.
  • The institution complain against is not cover under the scheme.
  • The subject matter of the complaint is not relating to the grounds of complaint specified under Clause 8 of the Banking Ombudsman Scheme.
  • 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 the complaint with the Banking Ombudsman

Procedure of Banking Ombudsman

Details required in the application

  • Name and address of the complainant,
  • Name and address of the branch or office of the bank against which you make the complaint
  • Facts giving rise to the complaint supported by documents, if any
  • Nature and extent of the loss caused to the complainant,
  • The relief sought from the Banking Ombudsman
  • Declaration about the compliance with conditions which are required to be complied with by the complainant under Clause 9(3) of the Banking Ombudsman Scheme.

Amount of Compensation – Limit

  • Ombudsman redressal is allowable for the complaints where the amount of compensation for any loss suffered by the complainant is limited to Rs. 20 lakh.
  • The Banking Ombudsman may award the compensation for an amount not exceeding Rs 1 lakh to the complainant for mental agony and harassment.

Also Read: RBI’s Ombudsman Scheme for NBFC

Wrapping Up

The Banking Ombudsman scheme is a benefit and a very significant mode for resolving of grievances by the general people against the banks and its services. It is develop in such a way that it does not throw out the jurisdiction of other courts. Hence, aggrieved people do not hesitate with the banking ombudsman as the main forum for the resolution of the dispute with banks. So far the achievements of Banking Ombudsman have been astonishing; however, there is a lot to achieve.

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