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Amended Banking Ombudsman Scheme 2017

Amended Banking Ombudsman Scheme 2017


Updated on 09.07.2017 to include amended Ombudsman scheme vide RBI notificaton CEPD. PRS. No. 6317 /13.01.01/2016-17 dated June16,2017 .The amendments in the scheme shall come into force from July 1,2017.

Banking ombudsman is essentially an independent arbitrator who will fairly resolve the complaints/disputes in bank service.  The scheme virtually covers all banking transactions related grievances except credit decision of the banks.  To quote some of the  grounds for complaints/deficiencies by a customer against bank services can be of   credit card complaints, internet banking, deficiencies in providing promised services by both bank and its sales agents, levying service charges such as  levying foreclosure charges/pre-payment penalties on all floating rate home loans/all floating rate loans or levying SMS charges on actual usage basis or levying penal charges on non-maintenance of minimum balances in inoperative accounts, on disbursement  or  delay  in  disbursement  of  pension, non-adherence to Fair Practices Code (BCSBI) adopted by individual banks etc.

The complaints may also be related to non-adherence to prescribed working hours, refusal to accept or delay in accepting, payments towards taxes, refusal to issue/delay in issuing or failure to service or delay in servicing, or redemption of government securities, refusal to close or delay in the closing of accounts, deficiencies arising out of sale of insurance/ mutual fund/ other third party investment products by banks etc. Under the amended Scheme, a customer would also be able to lodge a complaint against the bank for its non-adherence to RBI instructions with regard to Mobile Banking/ Electronic Banking services in India, viz.delay or failure to effect online payment / Fund Transfer, unauthorized electronic payment / Fund Transfer etc. The complaint can be related to non-acceptanceof loan applications without furnishing valid reasons to the applicant and delays in sanction,disbursement or non-observance of prescribed time schedule for disposal of loan applications, non-observance of RBI directives on interest rates; on engagement of recovery agents by bank, wrong  reporting  of  credit  information  to  Credit  Information Bureau, delay  or  failure  to  review  and  correct  the  credit  status  on account   of   wrongly   reported   credit   information   to   Credit Information Bureau.etc.

Non-entertainment of complaints:

The Banking Ombudsman is not entertaining any complaint unless (a) 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 or the complainant had not received any reply within a period of one month after the bank received his representation or the complainant is not satisfied with the reply given to him by the bank; (b) 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, not later than one year  and one month after the date of the representation to the bank.

The limits of compensations:

The Banking Ombudsman does not have the power to pass an award directing payment of an amount which is more than the actual loss suffered by the complainant as a direct consequence of the act of omission or commission of the bank, or ten lakh (one million) rupees  whichever is lower.In the latest amendment the pecuniary jurisdiction of the Banking Ombudsman to pass an Award has been increased from existing rupees one million to rupees two million. Compensation not exceeding rupees hundred thousand can also be awarded by the Banking Ombudsman to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered by the complainant.

Appeal: The procedure for complaints settled by agreement under the Scheme has also been revised. Appeal has now been allowed for the complaints closed under Clause 13 (c) of the existing Scheme relating to rejection which was not available earlier. The appellate authority for the Banking Ombudsman Scheme is the Deputy Governor of Reserve Bank of India.

The Reserve Bank of India, introduced the Banking Ombudsman Scheme (BOS) in India on June 14, 1995.          The scheme provides the speedy and inexpensive platform to resolve the complaints of bank customers relating to deficiency in banking service. There are 15 offices of Banking Ombudsmen across the country. The customers of Commercial Banks, Regional Rural Banks, and Scheduled Primary Co-Operative Banks, may file the complaint with the Banking Ombudsman of their jurisdiction alleging deficiency in banking services. Reserve Bank of India operates the Ombudsmen Scheme free of cost to make it accessible to all.

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