Banking

Ombudsman
By : Group 4
Jayalaxmi
Desai
Kevin Ladani
Manish
Jagwani
Piyush Singh
Samarth
Khare

Topics Covered
Introduction
Banking Ombudsman Scheme,
2006
Grounds of Complaints
Case Studies
Grievances Redressal
Rejection of Complaints
Appeals
Facts
Summary
1

Introduction

Bank
Banking is defined accepting for the
purpose of lending and investment, deposit
of money from the public repayable on
demand or otherwise and withdraw by
cheque, draft order or otherwise.

Ombudsman
An official appointed to investigate
individuals complaint against
maladministration especially that of public
authorities.
2

Banking Ombudsman Scheme

The Banking Ombudsman Scheme enables
an expeditious and inexpensive forum to
bank customers for resolution of complaints
relating to certain services rendered by
banks

Need Of Banking Ombudsman.

Vision
To be a visible and credible system of
dispute resolution mechanism for common
persons utilizing banking services

Goals
To ensure redressal of grievances of users of
banking services in an inexpensive, expeditious
and fair manner that will provide impetus to
improved customer services in the banking sector
on a continuous basis
To provide feedback/suggestions to Reserve Bank
of India towards framing appropriate and timely
guidelines to banks to improve the level of
customer service and to strengthen their internal
grievance redressal systems
To enhance the awareness of the Banking
Ombudsman Scheme
To facilitate quick and fair (non-discriminatory)

Banking Ombudsman
Scheme, 2006

Appointment and Tenure

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 the banking ombudsmen
They carry out the functions entrusted to
them by or under the scheme
This appointment may be made for a
period not exceeding three years at a time
9

Qualification
The Banking Ombudsman shall be a person
of repute experience in the field of
Law
Banking
Financial services
Public administration or
Management sectors

Qualification (Cont.)
If such person is a civil servant he should
be in the rank of joint secretary or above in
the Government of India and
Incase of such person being from banking
sector, he should had the experience of
working as a whole time Director in a public
sector or equivalent position

Territorial Jurisdiction and

Location of Office
The Reserve Bank shall specify the
territorial limits to which the authority of
each of the banking ombudsman shall
extend
The office of the banking ombudsman will
be located at such places as may be
specified by the Reserve Bank

Sittings
The banking ombudsman may hold
sittings at such places within his area
of jurisdiction as may be considered
necessary and proper by him, in
respect of a complaint or reference
before him

Secretariat
The Reserve Bank shall depute such
number of its officers and other staff to the
office of the banking ombudsman as
considered necessary to function as the
secretariat of the banking ombudsman
The cost of the secretariat will be borne by
the Reserve Bank

General Powers of Banking

Ombudsmen
To receive complaints relating to banking
services
To consider such complaints relating to the
deficiencies in the banking and other
services and facilitate their satisfaction or
settlement by agreement through
conciliation and mediation between the
bank and the aggrieved parties or by
passing an award in accordance with the
scheme

Powers to Call for Information

Banking

Ombudsman may require the

bank against whom the complaint is
made or any other bank concerned with
the complaint to provide any information
or furnish certified copy of any document
relating to the complaint which is or
alleged to be in its possession

The

Banking Ombudsman shall maintain

confidentiality of such information

Grounds On Which The

Banking Ombudsman
Can Receive And Consider
Complaints

17

Deficiency in services
(including internet banking)
Non-payment

or inordinate delay in the

payment or collection of cheques, drafts,
bills etc

Delay

in payment of inward remittances

Delay

/ failure of issuing drafts / pay

orders / bankers cheque / banking facility

Delay

and failure in providing necessary

banking services and products like debit

 Complaints

of accounts operated by NRI

Refusal

in opening the deposit account and

levying additional charges for the products
without informing the customer

Non

Adherence to the RBI guidelines in the

matter of credit and debit cards

Delay

in disbursing of pension

Refusal

/ delay in accepting payment towards

taxes
Delay

/ refusal in servicing or redemption of

government securities

Refusal

/ delay in closing of accounts

Non-adherence

to the fair practices code

as adopted by the bank or nonadherence to the provisions of the Code
of Bank s Commitments to Customers
issued by Banking Codes and Standards
Board of India and as adopted by the
bank

Non-observance

of RBI guidelines on
engagement of recovery agents by bank

Any

other matter relating to the

violation of the directives issued by the
RBI in relation to banking or other
services

Deficiency in Services
(loans and advances)
Non

compliance of interest rates as per

guidelines from RBI

Delays

in sanction, disbursement or nonobservance of prescribed time schedule

for disposal of loan applications

Non-acceptance

of loan application
without furnishing valid reasons

Non-observance

of any other directions

or instructions of the RBI from time to

CASES

22

CASE 1

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
23

DECISION
The subsequent developments after filing of
the police complaint and the opinion given 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
drawers cheque is forged or unauthorised,
however clever the forgery is, the banker
cannot debit his customers account. 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
24

CASE 2
The complainants husband and had deposited
Rs. 15000/- jointly in the name of self and her
name in the bank as on 9.3.93 for one year
and the deposit matured on 9/3/94. As on
15.2.96 he expired. When the complainant had
approached the bank and produced the death
certificate and the marriage certificate and
informed that the deposit receipt is lost and
asked for the payment of the deposit
proceeds, the bank did not make payment and
informed that they wanted clearance from
their controlling office regarding the heir of the25

DECISION
As per RBI guidelines the bank should not insist
upon succession certificate where the amount
to the credit of a deceased depositor does not
exceed Rs.25,000/-. As directed earlier by RBI,
BO advised that the intention of the depositor
to add the name of his wife in the deposit
payable jointly was that the deposit should go
to the second beneficiary on his death. The
bank was advised to make payment to the
complainant after obtaining an indemnity and
after following usual formalities such as
verification of signature and identity etc.
26

CASE 3
The complainant, when he tried to
withdraw cash through ATM, there was
power supply failure and he could not
withdraw cash whereas his account was
debited by Rs. 600/-. The complainant
reported the matter to the bank. But inspite of his request and telephonic talk
the bank did not take any action and
replied that he might have withdrawn
the cash as per the list of transactions
available with them.
27

DECISION
On perusal of the disputed
transactions and cash summary as
per ATM, the bank found that the
cash was not dispensed for the
disputed transaction and they
reimbursed the amount

28

Redressal of
Greiveances

PROCEDURE FOR REDRESSAL

OF GRIEVANCE
Any person who has a grievance against a
bank on any one or more of the grounds
mentioned in Clause 8 of the Scheme may,
himself or through his authorized
representative (other than an advocate),
make a complaint to the Banking
Ombudsman within whose jurisdiction the
branch or office of the bank complained
against is located

The complainant shall file along with the

complaint, copies of the documents, if any,
which he proposes to rely upon

30

A complaint made through electronic means

shall also be accepted by the Banking
Ombudsman.

The Banking Ombudsman shall also entertain

complaints covered by this Scheme received
by Central Government or Reserve Bank and
forwarded to him for disposal.

The application generates unique complaint ID

Automatic acknowledgement generated on

tracking of complaints

RBI and Finance ministry can also monitor the

status of the complaints

No Complaint To Banking
Shall Lie Unless
The complainant had, before making a
complaint to the
Banking Ombudsman,
made a written representation to the bank
and the bank had rejected the complaint.

The complainant had not received any

reply within a period of one month after the
bank received his representation.

The complaint is 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.

 The complaint does not pertain to the

same cause of action, for which any
proceedings before any court, tribunal or
arbitrator or any other forum is pending.
The complaint is not frivolous or
vexatious in nature.

Settlement Of
Complaints

SETTLEMENT OF
COMPLAINT BY AGREEMENT
As soon as it may be practicable to do, the
Banking
Ombudsman shall send a copy of the
complaint to the branch or office of the bank
named in the complaint

For the purpose of promoting a settlement of

the complaint, the Banking Ombudsman may
follow such procedure as he may consider just and
proper .

Awards

AWARD BY THE BANKING

OMBUDSMAN
The Banking Ombudsman shall take into account
aspect while passing Award.

The Award passed shall contain the direction/s, if

any, to the bank for specific performance of its
obligations and in addition to or otherwise, the
amount, if any, to be paid by the bank to the
complainant by way of compensation for any loss
suffered by the complainant.

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.

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

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

Rejection of
Complaints

Rejection of Complaint
The Banking Ombudsman may reject a
complaint at any stage if it appears to him
that the complaint made is :
Not on the grounds of complaint referred
to in clause 8 or

Beyond the pecuniary jurisdiction of

Banking Ombudsman or

40

Requiring

consideration of elaborate
documentary and oral evidence and the
proceedings
before
the
Banking
Ombudsman are not appropriate for
adjudication of such complaint; or

That

it is not pursued by the complainant

with reasonable diligence; or

In

the
opinion
of
the
Banking
Ombudsman there is no loss or damage
or
inconvenience
caused
to
the
complainant.

Appeal Before The

Appellate Authority
Any

person aggrieved by an Award or

rejection of a complaint for the reasons
referred to in sub clauses (d) to (f) of clause
13 of RBI guidelines, 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 thirty 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.

Action To Be Taken By
Appellate Authority
Dismiss
Allow

the appeal; or

the appeal and set aside the Award; or

Remand

the matter to the Banking Ombudsman for fresh

disposal in accordance with such directions as the
Appellate Authority may consider necessary or proper;
or

Modify

the Award and pass such directions as may be

necessary to give effect to the Award so modified; or

Pass

any other order as it may deem fit

Fact Sheet
Analysis
Source :
Annual Report on Banking
Ombudsman 2011-12,
Published by Reserve Bank
of India

Number of Complaints Received

2009-10

2010-11

2011-12

No. of OBO

15

15

15

Complaints
Received

79266

71274

72889

(-11%)

2%

Increase over 15%

previous year

46

Population Group Wise

Distribution of Complaints
2009-10

2010-11

2011-12

Rural

32%

11%

11%

Semi
Urban
Urban

14%

15%

16%

21%

30%

34%

Metropolit
an
Total

34%

44%

39%

79266

71274

72889

Mode Wise Complaints Received

Mode

2009-10

2010-11

2011-12

Email

12%

14%

13%

Online

14%

13%

14%

Post/Fax

74%

73%

73%

Total

79266

71274

72889

Bank Group Wise

Bank Group

200910
Nationalised Bank 24%
SBI and Associates 29%
Private Sector
28%
Banks
Foreign Banks
14%
RRBs/ Urban Co2%
Operatives
Others
3%
Total Complaints
79266

201011
29%
31%
24%

201112
31%
35%
21%

10%
2%

7%
2%

4%
71274

4%
72889

Category Wise Distribution of Complaints

Grounds of complaints 200920102011-12
10
11
Deposit Accounts
5%
2%
2%
Remittances
7%
6%
5%
Cards Related
24%
24%
21%
Loans and Advances
8%
6%
8%
Levy of Charges without 6%
6%
5%
Notice
Pension payments
6%
8%
8%
Failure to meet
14%
23%
25%
commitments
DSA/ Recovery Agents
2%
2%
1%
Notes and Coins
.2%
.2%
.2%
Others
24%
10%
10%
Out of Subject
3%
11%
5%

Position of Disposal of Complaints

No. of Complaints
Received during the
year
Brought Forward from
previous year
Handled during the
year
Disposed off
during the year
Rate of Disposal
Carried forward

200910
79266

201011
71274

201112
72889

9433

5364

4618

88699

76638

77507

83335

72020

72885

94

94

94

5364

4618

4622

Classification of Complaints Disposed

Maintainable

2009-10
46555
(56%)

2010-11
35499
(49%)

2011-12
37455(51
%)

Non
maintainable
(Being First
Resort
Complaints)
Non
Maintainable
(others)

16523(20% 16755(23
)
%)

14352(20
%)

20257(24% 19766(28
)
%)

21078(29
%)

Total Non
Maintainable

36780(44
%)

35430(49
%)

36521(51
%)

Modes of Disposal of Maintainable

Complaints
Disposal Mode 200910
By Mutual
67
Settlement
By award
1
By Rejection
32
Total
46555
Complaints
Disposed

2010-11
60

201112
54

1
39
35499

1
45
37455

Cost of Handling Complaints

2009-10 201011
197.4
260.7

201112
281.1

72021

72889

3619

3858

Total Cost (in

million Rs.)
Complaints
83335
Disposed
Cost per
2368
complaint (in Rs)

Position of Appeals Received

Appeals brought
forward
Appeals from
complainants during
the year
Appeals from bank
during the year
Total Appeals
Received during the
year
Total Appeals
handled

200910
121

201011
34

201112
0

271

93

314

37

40

37

308

13

351

429

167

351

Disposal of Appeals
20092010-11 201110
12
Appeals remanded 23 (6%) 9 (5%)
0
to BO
Appeals withdrawn 20 (5%)
/ settled
Appeals rejected
269
by AA
(68%)

32(19%) 1 (.3%)

71 (43%) 327(97
%)
Appeals allowed by 83
55 (33%) 10
AA
(21%)
(3%)
Totals Appeals
395
167
338
Disposed
(92%)
(100%)
(96%)
Appeals pending
34 (8%) 0
13
as on June 30

66

Working Group
In January 2013, seeking to improve
banking services and ensure speedy
redressal of grievances of customers, the
Reserve Bank of Indiahas set up a working
group to update the
BankingOmbudsmanScheme, 2006.

Two BOs, representatives from regulatory

Departments of RBI, IBA(Indian Banks
Association) and BCSBI(Banking Codes and
Standards Boards of India) are the

Terms of reference of the Working

Group are:
i. Grounds of complaints that have become
redundant
ii. Grounds of complaints that need to be
added to reflect consumer aims.
To examine need for extending the
pecuniary jurisdiction of the BOS
To examine the issues involved in
extending the BOS to Non-Scheduled Urban
Co-operative Banks and District and State
level Apex Co-operative Banks
69

 To examine the recommendations of the

Committee on Customer Service in Banks
(Damodaran Committee) and the
recommendations of the 183rd report of
the Rajya Sabha Committee on Subordinate
Legislation
Review of the grounds of appeal under the
BOS - to identify appropriate Clauses of the
Scheme for the purpose
70

References :

http://www.abhinavjournal.com/images/Commerce_&_Management/
Jan12/3-Dake.pdf
http://law.bepress.com
www.bankingombudsman.rbi.org.in

71

Thank You

72