This article is written by Ayush Agarwal,  a student of UPES, Dehradun.

Banking had always been root of a country’s economy and people living in it. To safeguard money, to earn a little interest income, to buy things which one cannot pay at present (credit facility), to hook big transactions in a safe and secured way and with many endless facilities, bank holds the big responsibility. One can see the importance of banking from the fact that the Government had been trying to introduce schemes for the development of bank and people operating and transacting through it.

Reserve Bank of India was incorporated in India in year 1935 by Hilton Young Commission and was nationalized in the year 1949. RBI being the national bank of India had been rendering service as a regulator and a parent bank for all banks in India. All banks giving banking service are being regulated by RBI.

No service could run without flaws and consumer complaints in it. To address complaints, disputes and grievances consumer needs a forum. A consumer cannot address each issue to the overburden judiciary and cannot go for the hectic process of filing each issue and summoning the bank for to address it. There was a need a forum to address the issue of the consumers, where they can freely, without much cost and without any hectic process of filing complaints can get speedy answer to the issue of the bank.

With the object to address this issue RBI introduced THE BANKING OMBUDSMAN SCHEME, 2006 Scheme is introduced with the object of enabling resolution of complaints relating to certain services rendered by banks and to facilitate the satisfaction or settlement of such complaints.

Grounds of Complaint:

Bank ombudsman can only be invoked when the facts of the case are not complicated and they can be addressed without supervision of the court. Section 8 of the Scheme specifies grounds on which a Complaint can be filed, the Banking Ombudsman has jurisdiction over deficiencies in baking which includes internet banking or other services, are as under:

1. Where there is non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
2. non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for charging of commission in respect thereof;
3. non-acceptance, without sufficient cause, of coins tendered and for charging of commission in respect thereof;
4. non-payment or delay in payment of inward remittances ;
5. failure to issue or delay in issue of drafts, pay orders or bankers’ cheques;
6. Banks are not adhering with the prescribed working hours.
7. When bank fails to provide or delays in providing a banking facility (other than loans and advances) promised in writing by a bank or its direct selling agents;
8. If there is a delay, 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 ;
9. There is a complaint from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank related matters;
10. Bank refuses to open deposit accounts without any valid reason for refusal;
11. Bank levies of charges without adequate prior notice to the customer;
12. Bank does not-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on ATM/Debit card operations or credit card operations;
13. 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);
14. refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government;
15. refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government securities;
16. forced closure of deposit accounts without due notice or withoutsufficient reason;
17. refusal to close or delay in closing the accounts;
18. non-adherence to the fair practices code as adopted by the bank;
19. non-adherence to the provisions of the Code of Bank’s Commitments to Customers issued by Banking Codes and Standards Board of India and as adopted by the bank ;
20. non-observance of Reserve Bank guidelines on engagement of recovery agents by banks; and
21. any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking or other services.

Sub-section 2 lays down the grounds for the deficiency in baking service with respect to loans and advances. The jurisdiction will be as under:

1. non-observance of Reserve Bank Directives on interest rates;
2. delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan applications;
3. non-acceptance of application for loans without furnishing valid reasons to the applicant; and
4. non-adherence to the provisions of the fair practices code for lenders as adopted by the bank or Code of Bank’s Commitment to Customers, as the case may be;
5. non-observance of Reserve Bank guidelines on engagement of recovery agents by banks; and
6. non-observance of any other direction or instruction of the Reserve Bank as may be specified by the Reserve Bank for this purpose from time to time.

What is the procedure of filing compliant?

Section 9 of the Scheme gives out the procedure of filing complaint with the Banking Ombudsman. Any aggrieved person, invoking above mentioned grounds can file a complaint in person or through an advocate. The complaint can be filed with Banking Ombudsman within whose jurisdiction the branch or office of bank complained against is located. The matters related to credit card and other type of centralized service, the jurisdiction of Banking Ombudsman is the billing address of the aggrieved person.

The complainant is required fill form (Annexure ‘A’ which can be accessed here) or filling an online application form which can be accessed here. The form needs to duly sign clearly admitting all circumstances, stating clearly:

1. the name and the address of the complainant,
2. the name and address of the branch or office of the bank against which the complaint is made,
3. the facts giving rise to the complaint,
4. the nature and extent of the loss caused to the complainant, and
5. the relief sought for.

Limitations to the filing complaint with Banking Ombudsman are:

1. If written complaint had been made with the bank and the bank had rejected the complaint or the complainant has not received any reply within the period one month after the bank received his representation or the complainant is not satisfied with the reply given to him by the bank.
2. If no reply had been received from the bank against the written complainant then complaint can be filed after one month of making complaint and within one year of filing complaint and if reply had been given then complaint can be filed within a year of making written complaint.
3. The same cause of action should not have raised with any court, tribunal or arbitrator or any other forum.
4. The complaint is not frivolous or vexatious in nature; and
5. The complaint is made before the expiry of the period of limitation prescribed under the Indian Limitation Act, 1963 for such claims.

Award by Banking Ombudsman:

1. If the matter is not settled within one month of filing complaint with the Banking Ombudsman, the Banking Ombudsman may allow parties to make representation to award or reject the complaint.
2. The award shall state briefly the reasons for passing the award.
3. The award be passed stating loss suffered by the complainant. The award cannot be more than 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.
4. 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.
5. The bank shall, unless it has preferred an appeal under sub. clause (1) of clause 14, within one month from the date of receipt by it of the acceptance in writing of the Award by the complainant under sub-clause (8), comply with the Award and intimate compliance to the Banking Ombudsman.

The list of Banking Ombudsman in India can be found here. One can file complaint with the local Banking Ombudsman by making online application or written complaint. Now access to the relief had been made easy and one should avail the benefit without any delay.