Banking Ombudsman Scheme

The modern use of the term began in Sweden, with the Swedish Parliamentary Ombudsman instituted in 1809, to safeguard the rights of citizens by establishing a supervisory agency independent of the executive branch. 

For Banking complaints and related help please contact The Reserve Bank of India:

http://www.bankingombudsman.rbi.org.in

The Reserve Bank of India announced the revised Banking Ombudsman Scheme with enlarged scope to include 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. Applicable to all commercial banks, regional rural banks and scheduled primary cooperative banks having business in India, the revised scheme will come into effect from January 1, 2006.

In order to increase its effectiveness, the revised Banking Ombudsman Scheme will be fully staffed and funded by the Reserve Bank instead of the banks. Under the revised Banking Ombudsman Scheme, the complainants will be able to file their complaints in any form, including online. The bank customers would also be able to appeal to the Reserve Bank against the awards given by the Banking Ombudsmen.

The new scheme provides a forum to bank customers to seek redressal of their most common complaints against banks, including those relating to credit cards, service charges, promises given by the sales agents of banks, but not kept by banks, as also, delays in delivery of bank services. The bank customers would now be able to complain about non-payment or any inordinate delay in payments or collection of cheques towards bills or remittances by banks, as also non-acceptance of small denomination notes and coins or charging of commission for acceptance of small denomination notes and coins by banks.

The Reserve Bank had first introduced the Banking Ombudsman Scheme in 1995 to provide expeditious and inexpensive forum to bank customers for resolution of their complaints relating to deficiency in banking services. The Scheme was revised in 2002 mainly to cover Regional Rural Banks and to permit review of the Banking Ombudsmens’ awards against banks by the Reserve Bank. The Banking Ombudsmen currently have their offices in 15 centres.

The Reserve Bank is also in an advanced stage of setting up an independent Banking Codes and Standards Board of India to ensure that comprehensive code of conduct for fair treatment to customers are formulated by banks and adhered to. The Reserve Bank of India had announced setting up of the Board in its Annual Policy for 2005-2006 announced by the Governor, Dr Y V Reddy in April 2005.

What sort of disputes can the Banking Ombudsman consider?
The Banking Ombudsman can receive and consider any complaint relating to the following deficiency in banking services:

• non-payment or  inordinate delay in the payment or collection of cheques, drafts, bills, etc.;
  
• non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for charging of commission for this service;
  
• non-acceptance, without sufficient cause, of coins tendered and for charging of commission for this service;
  
• non-payment or delay in payment of inward remittances ;
  
• failure to issue or delay in issue, of drafts, pay orders or bankers’ cheques;
  
• non-adherence to prescribed working hours;
  
• failure to honour guarantee or letter of credit commitments ;
  
• failure to provide or delay in providing a banking facility (other than loans and advances) promised in writing by a bank or its direct selling agents;
  
• delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits in any savings, current or other account maintained with a bank ;
  
• delays in receipt of export proceeds, handling of export bills, collection of bills etc., for exporters provided the said complaints pertain to the bank's operations in India;
  
• refusal to open deposit accounts without any valid reason for refusal;
  
• levying of charges without adequate prior notice to the customer;
  
• non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on ATM/debit card operations or credit card operations;
  
• non-disbursement or delay in disbursement of pension to the extent the grievance can be attributed to the action on the part of the bank concerned, (but not with regard to its employees);
  
• refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government;
  
• refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government securities;
  
• forced closure of deposit accounts without due notice or without sufficient reason;
  
• refusal to close or delay in closing the accounts;
  
• non-adherence to the fair practices code as adopted by the bank; and
  
• any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking or other services.

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