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The banking ombudsmen in the country spend more time rejecting consumer complaints than redressing them! And the banking regulator spends Rs 26.07 crore annually (2010-2011) to run this scheme, meant to provide an alternate complaint redress system for banking customers! A look at the annual reports of the Ombudsman Scheme brought out by the Reserve Bank of India in the last three years, indicates that 60-70 per cent of the complaints are rejected by the Ombudsmen. And this percentage is on the increase. During 2010-2011, out of 71,274 complaints filed before the Ombudsmen, 50,474 complaints were rejected! In 2009-2010, out of 79,266 complaints filed before the Ombudsmen, 51,857 were rejected. Another disturbing factor is the reduction in the number of complaints filed in 2010-11, as compared to the previous year. Given the fact that the consumer complaints against banks are on the increase, the decreasing numbers before the Ombudsmen should be a matter of concern. Does it reflect the disillusionment of the consumer with the system, particularly in view of the large scale rejections? If, even 16 years after the institution of the office of the Ombudsmen, over 70 per cent of the complaints are being rejected on technical grounds, it calls for introspection on what has gone wrong and what needs to be done. Basically, two factors are responsible for this huge rejection of consumer complaints. While one is the lack of consumer awareness about certain prerequisites for filing the complaint, the other is the long list of grounds for rejection of complaints, provided in the Ombudsman Scheme. One of the first requirements of filing a complaint before the Ombudsman is that the consumer should have first pursued the remedy provided by the bank.
To put it differently, he/she should have filed a formal, written complaint with the bank and only on getting no satisfactory redress, seek the intervention of the Ombudsman. Banks, however, find it convenient to keep consumers ignorant about this precondition, so a large percentage of complaints are straightaway rejected by the Ombudsmen (there are 15 of them in the country). While in 2007-2008, this percentage of rejected complaints was 40, it was 42 and 31 per cent in the next two years. In 2010-2011, it was 33 per cent—a clear indication that no significant efforts are being made to educate the consumer on the issue. Surely, this information (about the mandatory requirement) can be given by banks through posters put up at the branches. This message can go across through passbooks and statements of accounts. Or, simple brochures in local languages could be printed and kept in banks. Besides, if banks have a proper system of acknowledging complaints and providing time-bound redress, consumers would naturally prefer to have their complaint redressed at the bank itself. Absence of such well-publicised redress system at the banks level is also contributing to consumers going directly to the Ombudsman. Absence of consumer education is also apparent. In 2010-2011, 17 per cent of the complaints were rejected because they were outside the jurisdiction of the scheme. Another factor contributing to the high elimination rate is the long list of ‘grounds for rejection’ provided under the Ombudsman Scheme. Besides the usual causes like complaints having been filed beyond the limitation period (complaints should be filed within one year) or the territorial or pecuniary jurisdiction of the Ombudsmen, there are other grounds on which the Ombudsman may throw out a complaint. If, for example, the Ombudsman feels that it is filed ‘without any sufficient cause’ or ‘that it is not pursued by the complainant with reasonable diligence’ or ‘in the opinion of the Banking Ombudsman, there is no loss or damage or inconvenience caused to the complainant’, he can straight away discard the complaint. In the last three years, for example, 11 per cent of the complaints have been rejected by the ombudsmen on the grounds of ‘complaints without sufficient cause’.
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