Resolving complaints with the help of your friendly neighbourhood BANKING OMBUDSMAN

Last Sunday  one of my neighbours  came to me for redressal of what he called as a long pending issue with a bank. He had with him the counterfoil of a bank challan  for Rs 21,853 dated September,2013. It was a cheque received by him from one of his customers in Andhra Pradesh. The amount was not credited in his current account till date. He had complained to the branch head and  the regional office a number of times but there was no response. Being unaware as to  how to take the issue forward he sought my support. I advised him to approach the Banking Ombudsman (BO) as the same is the most economical and effective way for resolving of complaints with a bank The  Banking Ombudsman Scheme (BOS ) has been introduced  with the intention of  enabling resolution of complaints relating to certain services rendered by banks and to facilitate the settlement of such complaints. Banking Ombudsman Scheme is applicable to all commercial banks, regional rural banks and scheduled primary co-operative banks. Banking Ombudsman is appointed by  the  Reserve Bank . RBI officers in the rank of Chief General Manager or General Manager  may be appointed as Banking Ombudsman.  Each banking ombudsman will have a jurisdiction assigned to him.

The complaints that can be filed by the  customers before the banking ombudsman can broadly be categorized into (a)  complaints alleging deficiency in banking  including internet banking and other banking services and  (b)  complaints alleging  deficiency in respect of loans. Complaints alleging deficiency of service can include  non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc, non- acceptance, without sufficient cause, of small denomination notes and coins  tendered,  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 provide or delay in providing a banking facility (other than loans and advances) promised in writing by a bank,  non-payment of deposit,  non-observance of the Reserve Bank directives, applicable to rate of interest on deposits in any savings, current or other account maintained with a bank ,  complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad,  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 to the instructions of Reserve Bank on ATM/Debit card operations or credit card operations, non-disbursement or delay in disbursement of pension etc.  Complaints alleging deficiency in banking service in respect of loans and advances  that can be filed before the Banking Ombudsman includes  non-observance of Reserve Bank Directives on interest rates, delays in sanction, disbursement or non-observance of prescribed  time schedule for disposal of loan applications,  non-acceptance of application for loans without furnishing valid reasons to the applicant, non-observance of Reserve Bank guidelines on engagement of recovery agents by banks etc.

Any person who has  is aggrieved  against a bank on any one or more of the above mentioned grounds may by  himself or through his authorised representative (other than an advocate), make a complaint to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located. If the  complaint arises  out of the operations of credit cards and other types of services with centralized operations,  the compliant shall be filed before the Banking Ombudsman within whose territorial jurisdiction the billing address of the customer is located.  The complaint shall be made in writing and should contain the  details such as   the name and the address of the complainant,  the name and address of the branch or office of the bank against which the complaint is made,  the facts giving rise to the complaint,  the nature and extent of the loss caused to the complainant, and  the relief sought for. . A complaint can also be made  through electronic means also.

Before making the complaint to the Banking Ombudsman  the complainant shall  make a  written representation to the bank. A complaint with BO shall lie only if  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.  Customers have a period upto one year  from the date of receipt of reply from the bank  for filing the complaint  and one year and one month after the date of the representation to the bank, where no reply is received. BO will not entertain a complaint  if for the same issue any proceedings before any court, tribunal or any other forum is pending or a decree or Award or order has been passed by any such court, tribunal,  or forum.

On receipt of a complaint the BO  will send a copy of the complaint to the branch or office of the bank named in the complaint. A copy will be send to  the nodal officer  of the bank also.   If  the  complaint is not settled by agreement within a period of one month from the date of receipt of the complaint by the bank  or such further period as the Banking  Ombudsman may allow the parties,  BO  may, after affording the parties a reasonable opportunity to present their case, pass an Award or reject the complaint.

The award passed shall contain the direction/s ,to the bank for specific performance of its obligations. It may also include the amount of compensation  to be paid by the bank to the complainant for any loss suffered by the complainant, arising directly out of the act or omission of the bank. BO can pass awards directing the bank to pay up to Rs ten lakh or the amount of loss incurred, 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.

The Banking Ombudsman may reject a complaint at any stage if it appears to him that the complaint made is without sufficient cause, is  not on the grounds of permitted  complaints,  is  beyond the pecuniary jurisdiction of Banking Ombudsman,  requires  consideration of elaborate documentary and oral evidence ,  is not pursued by the complainant with reasonable diligence etc .

An award shall be effective only if  the complainant furnishes to the bank concerned a letter of acceptance of the Award in full and final settlement of his claim within a period of 30 days from the date of receipt of copy of the Award.   If not satisfied with the Award,   the  complainant   and the bank  has an option to  prefer an appeal within 30 days. If none of the parties prefers an appeal  the Bank should comply with the terms of the Award within one month from the date of receipt of the acceptance in writing of the Award by the complainant.

Jiz P. Kottukappally. The author is  working as Asst General Manager, Catholic Syrian Bank and the views expressed are the personal opinion of the author. Author can be reached at jizpauls@gmail.com