This Article is written by Adv Nishit Paul. In this Article, he has discussed the grounds and procedure for filing a complaint with the Banking Ombudsman under the Banking Ombudsman Scheme, 1995 with regards to as a mechanism for seeking relief against deficiency in the banking services


In day to day financial transactions, banking companies and its customer’s interaction can lead to disputes which are difficult to comprehend in this financial market. An aggrieved customer can make the bank pay for its negligence towards its actions after a lot of struggle. The act of the Bankers might lead to an illegal cut on the accounts of the Customers which can be painful for the account holder and can be more tedious in recovering that amount. For these reasons Reserve Bank of India (RBI) for eradicating these disputes initiated The Banking Ombudsman Scheme, 1995 to provide relief to the public as to complaints regarding deficiency in banking services, loans, and credits.

Who is an Ombudsman?

Ombudsman is an authority established by The Banking Ombudsman Scheme, 1995 and its officers are appointed by the RBI and having there redressal offices which are mostly situated at the capital of each State of India. Their job is to redress customer complaints against deficiency in banking services. The method in resolving the disputes is through settlement by agreement or through conciliation and mediation between the concerned bank and the aggrieved party. As per Clause 4 of the Scheme, the Ombudsman is an officer of a rank of Chief General Manager or General Manager.

The Scheme covers banks which are the Scheduled Commercial Banks and Primary Co-operative Scheduled Banks. The Scheme does not cover Regional Rural Banks (RRB’s).

Download Now

What kind of grounds can be used to file a complaint?

The Banking Ombudsman can hear disputes on the following kinds of complaints before it:-

Complaints related to Banking Services

  1. In relation to operation in any savings, current account or to any other account with the bank such as delays in credit proceeds to complainant’s account.
  2. In relation to refusal to open deposit accounts with any valid reason for the refusal.
  3. Claims in respect of unauthorized or fraudulent withdrawals from deposit accounts or fraudulent encashment of a cheque.
  4. Non-acceptance of small denomination notes without sufficient cause.
  5. Non-payment or delay in payment or collection of cheque, draft or a bill.
  6. levying of charges without adequate prior notice to the customer.

Complaints related to loans and advances from the bank

  1. Delay in sanction, disbursement within a prescribed time on disposal of a loan application.
  2. Non-sanctioning of loans without giving reasonable grounds in writing.
  3. Not following directives of RBI on interest rates.

In relation to services related to Online Banking and Debit or Prepaid Cards

  1. Account debited but cash not shown in the ATM.
  2. Amount debited more than once for one withdrawal in ATMs or for POS transaction.
  3. Less/Excess amount of cash dispensed by ATMs.
  4. Debit in the account without the use of card or details of the card.
  5. Use of stolen/cloned cards.

Any other reason in relation to non-compliance of RBI direction

The Scheme mentions several other methods under which the complaint can be filed which can be seen here

How an application should be filed before Ombudsman?

It shall be well noted that no direct complaint can be filed before the Ombudsman. To file a complaint before the Ombudsman following necessary requisite shall be complied with, which are:

  1. The complaint must be in writing and has to be made first to the bank and then the complainant has to wait for a maximum period of one month.
  2. During this, period if the bank has made a final reply under which either complaint got rejected or the complainant is not satisfied with the reply, or no reply is given or whichever is the case, the cause of action will start.
  3. Thereafter a limitation period of one year will commence and during this period, the complaint can be lodged with the Ombudsman.
click here

Material Contents of the complaint

The complaint shall be written in a formal letter format mentioning the reasons for filing before the Ombudsman. The complaint shall specifically mention those grounds upon which the dispute arises between the Bank and the complainant. It is necessary that material contents shall consist of complaints of that nature which has been mentioned above in the previous head. The complaint shall be in writing with the support of requisite documents which establishes the nature of the dispute with the bank. It shall also mention the extent of the loss caused to the complainant and the relief sought from the Banking Ombudsman.

The application shall be filed in a format prescribed under the Scheme. Any person who is aggrieved by the service of the Banks can file a complaint or through its appointed representative (other than an advocate). It shall be submitted to the regional office under whose jurisdiction the dispute has arisen.

The relief which can be Granted by Banking Ombudsman

The Banking Ombudsman has very limited jurisdiction in hearing the disputes. The Ombudsman has to redress the complaint within the period of one month from the date of filing and if not duly comply with the issue it shall within the prescribed period have to pass an award or reject the complaint.

The award can be a direction of specific performance or obligation of an amount to be paid as compensation by the bank to the complainant.  The award shall not be in excess of the amount of actual loss suffered to the complainant for the act or omission in the part of the bank or it shall be an amount of Rs.20 Lac, whichever is lower. In addition to the actual award, an additional compensation not exceeding Rs.1 Lac can be given to the complainant in relation to the time and expense incurred by the complainant and mental agony or harassment suffered by him.

If the complainant is still not satisfied by the resolution of Banking Ombudsman or the complaint has been rejected, the complainant can file an appeal before Deputy Governor of RBI. Either party aggrieved by the award can file an appeal before Dy. Governor of RBI.


Through Banking Ombudsman a number of problems have been resolved in the banking services. This Scheme has lead to better eradication of dispute between the customers and the banks. As per RBI data, it has been understood that the scheme has become popular and customers are coming forward for the redressal of their issues before the Ombudsman. According to the 2016-17 statistics of RBI 130987 complaints were filed, which was 102894 in the year 2015-16, it shows a significant increase in the complaint before the Ombudsman. During the time frame of 2 years and the expansion of it has indulged the RBI to increase its number from 15 in the year 2015-16 to 20 Ombudsman in the year 2016-17. Thus, an alternative dispute resolution formed by the RBI has been a huge success for the Banking Industry.


Please enter your comment!
Please enter your name here