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Banking Ombudsman Scheme to resolve the complaints/dispute in bank services

Banking Ombudsman Scheme to resolve the complaints/dispute in bank services


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.

Type of complaints/disputes covered:

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, non-adherence to Fair Practices Code (BCSBI) adopted by individual banks etc. The complaints may 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 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 rupees whichever is lower. 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, taking into account the loss of the complainant’s time, expenses incurred by the complainant, harassment and mental anguish suffered by the complainant.

 

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