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INtroduced in 1995 by the Reserve Bank of India, the Banking Ombudsman scheme provides for quick and impartial settlement of consumer disputes with banks. The procedure before the Ombudsman is quite simple. On receipt of a complaint from the customer, the Ombudsman tries to bring about an amicable settlement through conciliation and mediation. If that fails, then he will pass an award. Earlier, there was no appeal against the decision of the Ombudsman, but now banks and complainants can write to the appellate authority within a month of the receipt of the award. The appellate authority can reject the appeal, or set aside the award, or modify it, or send it to the Ombudsman for fresh disposal as per its directions. Unlike courts, there is no fee involved, nor advocates allowed to participate in the process of settlement of disputes. The complainant can send his grievance through regular mail, or file it electronically online by filling the form provided. Of the complaints received by the Banking Ombudsman in 2008-09, 63 per cent was through regular mail, while 23 per cent was through electronic mail. In addition to various deficiencies in banking services, including credit card operations and electronic banking, people can complain against violations of all directives and instructions issued by the RBI from time to time on banking operations. One can also lodge a complaint against delay in disbursal of pension if the bank is responsible for the delay. Banks’ failure to comply with the Fair Practices Code for Lenders, or even the Code of Bank’s Commitment to Customers issued by the Banking Codes and Standards Board of India, can be a cause of complaint. The complaint should basically contain the full name and address of the complainant, details about the bank against which the complaint has been filed, the facts leading to the complaint (with supporting documents) and details of the relief being sought. The Ombudsmen can award compensation only for any loss suffered as a direct consequence of any omission or commission by the bank, and there is a limit of Rs 10 lakh on the compensation amount. However, in the case of credit card operations, compensation up to a maximum amount of Rs 1 lakh is allowed for mental agony and harassment. People filing complaints before the Ombudsman must remember three important conditions: One, that the consumer should first approach the bank for redress of his complaint. If there is no response within a month, or if the bank fails to resolve the complaint to the satisfaction of the complainant, or rejects the complaint, only then can a consumer go to the Ombudsman. Two, the complaint should be filed within one year from the date of such failure on the part of the bank to redress the complaint. Three, the complaint cannot be filed before the Ombudsman if a similar complaint is already pending with any other law court, or consumer court, or has already been dealt with by the forum, or the law court. In recent years, people are slowly becoming aware of the Banking Ombudsman. There is a steady increase in the number of complaints being filed before the 15 Ombudsmen in different parts of the country. From 38,638 complaints in 2006-2007, the number went up to 69,117 in 2008-2009. However, from the large number of complaints being rejected by the Ombudsmen, what one discerns is the absence of knowledge about the conditions governing the filing of complaints before the Ombudsman. During 2007-2009, as many as 7,950 complaints were rejected on grounds that they were "first resort complaints" (or that the complainant did not first go to the bank). This year 18,187 complaints were rejected on that ground. Similarly, 707 cases were not taken up because they were pending in other forums, while 3,019 complaints were not heard because of incomplete address. Thus, out of a total of 43,115 complaints rejected by the Ombudsmen, "first resort complaints" constituted 42 per cent. So remember, if you have
a complaint against a bank, send a formal letter of complaint to the
bank. As per RBI instructions, banks are supposed to place complaint
forms on their websites. So you can even file the complaint
electronically, but keep a copy. When you do lodge a complaint with
the Ombudsman, mention this. For more information on the Ombudsman
scheme, or for filing your complaint online, log on to
www.bankingombudsman.rbi.org.in.
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