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RBI Banking Ombudsman: Your go-to point for disputes concerning banking services

As part of its grievance redressal mechanism for hearing consumer complaints relating to certain banking services, the Reserve Bank of India (RBI) launched the Banking Ombudsman Scheme in 1995. With effect from 2006, it was brought under Banking Regulation Act, 1949, by government notification and henceforth it became known as Banking Ombudsman Scheme, 2006. According to RBI, the scheme provides an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by all scheduled commercial banks, regional rural banks and scheduled primary cooperative banks. As receivers of banking services, we need to be informed about the type of complaints that may or may not be lodged or filed with a Banking Ombudsman.

RBI has established a total of 15 Banking Ombudsman offices, located mostly in state capitals. These offices are each headed by a Banking Ombudsman, who is a senior official appointed by RBI to redress customer complaints against deficiency in certain banking services. Until June 2017, the pecuniary jurisdiction of BO to give an award was fixed at Rs 10.00 lakh (one million rupees).

Deposits, Remittances and Accounts

  • Non-payment/inordinate delay in payment or collection of cheques/drafts/bills, etc.
  • Non-payment or delay in payment of inward remittances
  • Non-acceptance of small-denomination currency notes/coins
  • Failure to issue/delay in issue of drafts, pay orders or banker’s cheques
  • Non-adherence to prescribed working hours
  • Failure to provide/delay in providing a banking facility (other than loans and advances) that has been promised in writing by a bank or its direct selling agents (DSAs)
  • Non-credit/delay of proceeds to parties’ accounts
  • Non-payment of deposits
  • Non-observance of RBI directives as applicable to rate of interest on deposits in any savings, current or other account maintained with a bank
  • Complaints from NRIs having their accounts in India in relation to their remittances, deposits from abroad and other bank-related matters
  • Refusal to open deposit accounts
  • Levying of charges without adequate prior notice to the customer
  • Non-adherence by the bank or its subsidiaries to the instructions of RBI on ATM, debit card/credit card operations
  • Non-disbursement/delay in disbursement of pensions
  • Non-acceptance of payment towards taxes
  • Refusal to issue/delay in issuing/failure to service/ delay in servicing or redemption of government securities
  • Refusal to close or delay in closing the accounts
  • Forced closure of deposit accounts without giving prior notice or without sufficient reason
  • Non-adherence to Fair Practices Code (FPC) as adopted by the banks or non-adherence to the provisions of the Code of Banks’ Commitment to Customers (CBCC) issued by Banking Codes & Standards Board of India (BCSBI)
  • Non-observance of RBI guidelines on engagement of recovery agents by banks
  • Any other matter relating to violation of the directives issued by RBI in relation to banking or other services

 

Loans and Advances

  • Non-observance of RBI directives on interest rates
  • Delays in sanction/disbursement/non-observance of prescribed time schedule for disposal of loan applications
  • Non-acceptance of application for loan without furnishing valid reasons to the applicant
  • Non-adherence to the provision of Fair Practices Code for Lenders (FPCL) adopted by the bank or the Code of Banks’ Commitment to Customers (CBCC)
  • Non-observance  of  any  other  directions/instructions of RBI
  • The Banking Ombudsman may also deal with such other matters as may be specified by RBI from time to time

 

Complaints that CANNOT be lodged with Banking Ombudsman

  • If the complainant has not first approached his bank for redressal of his grievance
  • If the complainant has not made the complaint within one year from the date one has received the reply from the bank or no reply has been received if it is more than one year and one month from the date of complaint to the bank
  • The complaint is pending for disposal/has already been dealt with at any other forum like court of law, consumer court, etc.
  • The institution complained against is not covered under the BO Scheme
  • The subject matter of the complaint is not within the ambit of the BO
  • If the complaint is for the same subject matter that was settled through the BO in any previous proceeding

Amendments
The Banking Ombudsman Scheme has had amendments made to it over the years to make it much more effective.

February 2009  
Deficiencies arising out of internet banking

  • A customer will now also be able to lodge a complaint against the bank for non- adherence to the provisions of Fair Practices Code for Lenders (FPCL) or Code of Banks’ Commitment to Customers (CBCC) issued by Banking Codes & Standards Board of India (BCSBI).
  • BO can award compensation up to Rs 1.00 lakh to complainant in cases of complaints arising out of credit card operations (taking into account the loss of the complainant’s time, expenses incurred by him, harassment and mental anguish suffered).

 

May 2017    
Rejection of complaints by BO

  • The complaint is beyond the pecuniary jurisdiction of BO.
  • It is frivolous, vexatious, malafide.
  • It is without sufficient cause.
  • There is no loss or damage or inconvenience caused to the complainant.

It requires consideration of elaborate documentary and oral evidence.

July 2017    

Mis-selling and mobile/electronic banking (deficiencies arising out of sale of insurance/mutual fund/other third-party investment products by banks)

  • The BO Scheme now provides for lodging of complaints against banks for non-adherence to RBI instructions on mobile banking/electronic banking services.
  • The pecuniary jurisdiction of Banking Ombudsman to pass an award has been increased to two million rupees (from the existing one million rupees).
  • Appeals are now allowed for complaints closed under the BO Scheme relating to rejection of a complaint.

Banking Ombudsman Contact Details and other helplins can be found on this page: Consumer Forum helpline Numbers

Legal Helpdesk

Divya Patwal

VOICE

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