In this article, Sachin Vats Discusses how to lodge a complaint against Banking Malpractices 

Our country has seen a significant amount of economic development with the development of the banking sector. But many a times cases related with negligent behaviour of the banking professionals have been seen which violates the interest of the consumer. It is the consumer around which all the banking activities revolve but even then malpractice are done against them. We have a lot of ways to safeguard our interest in the banking services.

Malpractices Done by a Bank

If a customer faces with any of the problem given below then it will be considered as an improper, illegal and negligent behaviour of the banking officials.

• 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 for charging of commission in respect thereof.
• 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 or its direct selling agents.
• Delays, non-credit of proceeds to parties accounts, non-payment of deposit or non-observance of the Reserve Bank directives, if any, 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, deposits and other bank-related matters.
• 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 or its subsidiaries to the instructions of Reserve Bank on ATM/Debit card operations or credit card operations.
• Non-disbursement or delay in disbursement of pension (to the extent the grievance can be attributed to the action on the part of the bank concerned, but not with regard to its employees).
• Refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government.
• Refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government securities.
• Forced closure of deposit accounts without due notice or without sufficient reason.
• Refusal to close or delay in closing the accounts.
• Non-adherence to the fair practices code as adopted by the bank or non-adherence to the provisions of the Code of Banks Commitments to Customers issued by Banking Codes and Standards Board of India and as adopted by the bank.
• Non-observance of Reserve Bank guidelines on engagement of recovery agents by banks; and
• Any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking or other services.

Grievance Cell of banking institutions

• All the banks have an exclusive unit called “Grievance Cell” which deals with the complaints of their customers. The Cell is headed by an executive equivalent to the rank of a General Manager. Any customer can visit the Bank and meet the concerned officials to sort out the problem.
• A Toll-Free Number is also provided by the respective banks to lodge any complaint related to the services rendered and others issues with the bank. A Complaint Reference No. or Registered Id is given to the customer.
• Banks have also started a Real Time Monitoring System for the complaints received centrally through the Customer Relationship Management (CRM). The complaint is directly registered to the Bank’s website.
• After lodging any complaint with the bank, a customer needs to wait for 30 days to give a suitable reply or offering any solution to the concerned problem.

National Consumer Helpline (Jago Grahak Jago)

                                   “NATIONAL TOLL-FREE NO. — 1800-11-4000”

• National Consumer Helpline has entered into convergence with the several banks where complaints related to banks are sent to the respective banks through electronic mail for immediate redressal.
• The National Consumer Helpline provides with the Three-Tier detailed knowledge of lodging any complaint against any malpractice of the bank. First, they complain to the respective bank, next to the Banking Ombudsman appointed by the Reserve Bank of India and then the Legal route for the case concerned.
• However, all the banks have not yet become the part of the National Consumer Helpline.

Can We Complain to Ombudsman of Banking?

• The Banking Ombudsman Scheme was introduced under Section 35A of the Banking Regulation Act, 1949 by the Reserve Bank of India with effect from 1995. It was revised in 2002 and further superseded by the Scheme of 2006. The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. It covers all the Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-Operative Banks.
• “Procedure for filing Complaint”: A complaint with the Banking Ombudsman can be filed simply by writing the problem on a plain paper without following any particular format. Now, One can send an Electronic Mail or file it directly on the website. The complaint can be filed by any authorised person or representative other than an advocate. There is no any fee for filing or resolving customer’s complaints.
• Compensation:  the amount that will be paid by any bank to the complainant for the loss suffered is limited to the amount arising directly out of the act or omission of the bank or Rs. 10 lakhs, whichever is lower.
• The Banking Ombudsman endeavours to promote through conciliation or mediation, a settlement of the complaint by agreement between the complainant and the bank named in the complaint.

Tracking Your Complain

• All the banks have their portals for tracking any complaint registered with the Grievance Cell using their Registered Id or the Complaint Reference No. provided to them at the time of registering. So, the complaint can be tracked using Grievance Redressal Mechanism of the respective banks.

What Legal Route to take against the Bank?

• If any complainant is not happy with the settlement offered by the Ombudsman then he can file an appeal before an appellate authority within 30 days of the decision given by the Ombudsman.
• The Appellate Authority here can be the Deputy Governor of the Reserve Bank of India, the Consumer Redressal Forums or one can go to the Civil Court of the required jurisdiction.

Filing a complaint in the Consumer Forum

• A complainant can definitely approach to the court but only after raising the matter with the Grievance Cell of the bank and the Ombudsman. The case will be considered as “Premature” if it is not followed in the above said sequence.
• Complainant can approach the Consumer Court but there is a hierarchy to approach the Consumer Court depending upon the financial damage incurred due to malpractice of the bank. The case for financial damage upto Rs. 20 lakhs are filed before District Consumer Redressal Forum. If it is above Rs. 20 lakhs but less than Rs. 1 crore the it has to be taken to the State Consumer Disputes Redressal Commission. All the cases having financial damage above Rs. 1 crore have to be taken before the National Consumer Disputes Redressal Commission.

Can you sue a Bank for Negligence or Emotional Distress

• Suits against Bank Officers and the Directors are treated differently from the cases of negligence related with Doctors and Accountants. The decisions taken in good faith by the banking officials are protected from liability. Professional Negligence in Indian Banking Sector can be sued by the customers in civil suits.

• Emotional Distress is a state of mental suffering caused by an extreme experience such as anxiety, panic, depression and suicidal thoughts. The loss happening due to emotional distress makes a bank liable and has to give compensation upto Rs. One lakh in it under Ombudsman Banking Scheme. The suit can also be filed in civil courts.

Malpractices done by Banks during Demonetisation

• The involvement of officials in violating the directions given by the Government and the RBI has been reported by the Finance Ministry. The ministry has asked the respective banks to give details of the officials who were illegally involved in changing currency notes and did not abide by the law or Reserve Bank of India’s direction.
• The vigilance proceedings against the Directors have been carried out by the Finance Ministry. The departmental proceedings against officials are carried out by the bank itself. The random checks by the Enforcement directorate of select  branches also feel that there could be RBI inspection also to check whether there were any lapses at branches on bank’s side.

Are  Banks Liable For Fraudulent Transactions?

• The Reserve Bank of India in August, 2016 said that customer will have no or zero liability in case of fraud being committed because of bank’s or third person’s breach. Customer will be liable only if there is involvement of customer himself.
• The customer’s liability will be limited to a maximum of Rs. 5000 if he reports within 4 to 7 working days. If customer reports beyond 7 working days, customer liability will be determined based on bank’s board approved policy.

Charter of Customer Rights: RBI’s guidelines on protection of bank customers

• The Reserve Bank of India in 2014 released the “Charter of Customer Rights” which enshrines broad and overarching principles for the protection of bank customers and provides five basic rights:
• Right to Fair Treatment.
• Right to Transparency, Fair and Honest Dealing.
• Right to Suitability.
• Right to Privacy.
• Right to Grievance Redress and Compensation.
• The RBI has advised the Indian Bank’s Association to formulate a “Model Customer Rights Policy” covering all the principles enshrined in the charter.