CHARACTERISTICS OF BANKING OMBUDSMAN

The Banking Ombudsman is a quasi judicial authority. It has power tosummon both the parties bank and its customer, to facilitate resolutionof complaint through mediation. All Scheduled Commercial Banks, Regional Rural Banks and ScheduledPrimary Co-operative Banks are covered under the Scheme. The Banking Ombudsman has power to consider complaints from Non-Resident Indians having accounts in India in relation to their remittancesfrom abroad, deposits and other bank-related matters. The Banking Ombudsman does not charge any fee for resolvingcustomers complaints.Complaint can be made before a Banking Ombudsman on the same subjectmatter for which any proceedings before any court, tribunal or arbitrator or anyother forum is pending or a decree or award or a final order, has already beenpassed by any such competent court, tribunal, arbitrator or forum.

DUTIES & FUNCTIONS OF OMBUDSMAN

The Ombudsman shall enquire into and investigate in accordance with theprovisions of the Act, and take action or steps as may be prescribed by theAct and concerningPractices and actions by persons, enterprises and otherprivate institutions where complaints allege that violations of fundamentalrights and freedoms have taken place.

All instances or matters of alleged or suspected corruption and themisappropriation of public moneys or other public property byofficials. Without derogating from the provisions, any request or complaint inrespect of instances or matters referred to in that provisions, may includeany instance or matter in respect of which the Ombudsman has reason tosuspectThat the provisions of any law or under the authority of the State or byany person in its employment, or that any practice is so followed, in amanner which is not in the public interest. That the powers, duties or functions which vest in the State or, body orinstitution, or any person in its employment are exercised orperformed in an irregular manner. That moneys forming part of the funds of the State or body or institution,or received or held by or on behalf of the State or body or institution arebeing or have been dealt with an irregular manner. Any person wishing to lay any instance or matter referred to in provisionsbefore the Ombudsman shall do so in such manner as the Ombudsmanmay determine or allow. The Ombudsman shall not be required to investigate any instance ormatter referred to in the provisions which has been laid before him or herunder the provisions when the grounds on account of which the inquiry isdesired is in the opinion of the Ombudsman. The provisions shall not apply in respect of any decision taken in or in connectionwith any civil or criminal case by a court of law

GROUNDS OFCUSTOMERS COMPLAINTS CONSIDERED BY BANKING OMBUDSMAN The Banking Ombudsman can receive and consider any complaint relating to thefollowing deficiency in banking services (including internet banking): non-payment orinordinate delay in the payment or collection of cheques,drafts, bills etc.; non-acceptance, without sufficient cause, of small denomination notestendered for any purpose, and for charging of commission in respectthereof; non-acceptance, without sufficient cause, of coins tendered and forcharging of commission in respect thereof; non-payment or delay in payment of inward remittances ; failure to issue ordelay 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 loansand advances) promised in writing by a bank or its direct selling agents; complaints from Non-Resident Indians having accounts in India in relationto their remittances from abroad, deposits and other bank-related matters; levying of charges without adequate prior notice to the customer; non-adherence by the bank or its subsidiaries to the instructions of ReserveBank on ATM/Debit card operations or credit card operations; refusal to accept or delay in accepting payment towards taxes, as requiredby Reserve Bank/Government; refusal to issue or delay in issuing, or failure to service or delay in servicingor redemption of Government securities; forced closure of deposit accounts without due notice or without sufficientreason;

refusal to close or delay in closing the accounts; non-observance of Reserve Bank guidelines on engagement of recoveryagents by banks; and non-observance of Reserve Bank Directives on interest rates; delays in sanction, disbursement or non-observance of prescribed timeschedule for disposal of loan applications; non-acceptance of application for loans without furnishing valid reasons tothe applicant; and

GROUNDS OF CUSTOMERS COMPLAINTS NOT .CONSIDERED BY BANKING OMBUDSMAN

Ones complaint will not be considered if: One has not approached his bank for redressal of his grievance first. One has not made the complaint within one year from the date one hasreceived the reply of the bank or if no reply is received if it is more thanone year and one month from the date of representation to the bank. The subject matter of the complaint is pending fordisposal / has alreadybeen dealt with at any other forum like court of law, consumer court etc. Frivolous or vexatious. The institution complained against is not covered under the scheme. The subject matter of the complaint is not within the ambit of theBankingOmbudsman. If the complaint is for the same subject matter that was settled through theoffice of the Banking Ombudsman in any previous proceedings

INTRODUCTION An ombudsman is a person who has been appointed to look into complaints aboutan organization. Using an ombudsman is a way of trying to resolve a complaintwithout going to court.Banking Ombudsmanis a quasi judicial authorityfunctioning under Indias Banking Ombudsman Scheme, and the authority wascreated pursuant to the a decision by the Government of India to enable resolutionof complaints of customers of banks relating to certain services rendered by thebanks. The Banking Ombudsman Schemewas first introduced in India in 1995,and was revised in 2002 and 2006. In the wake of the failure in the efficientservices of the banks, the RBI brought a scheme for the prompt, efficient andcourteous services and also to protect the rights of the customers.The Banking Ombudsman is an official authority to investigate the complaint fromthe customers and address the complaint and thereby bring the solution among theaggrieved parties. So the Banking Ombudsman plays the role of a mediator andserves the purpose of reconciliation. The Banking Ombudsman has been definedunder clause 4 of the Banking Ombudsman Scheme, 2006

Advantages of banking ombudsman: there is many advantages available in banking ombudsman scheme. (i). this mechanism provides settlement on the basis of mutual concern. (ii). If there is no possibility of settlement then only ombudsman decide to take that matter for its adjudication and pass an award. (iii). In ombudsman proceedings there is no fee is collected from the complainant (customer). (iv). 2006 scheme provide appeal facility, it gives more possible to the customer to optain proper remedy without judicial intervention. (v). even though enforcement is in the hands of complainant, if he give his concern to enforce the award the bank has the liability to do it. Because ombudsman is under the control of RBI. (vi). Now a days many cases are handled by ombudsmann it reduces the burden of judiciary. (viii). Regarding appeal against ombudsman award in to the judiciarycomparing bank side, customer side is very less, it means that the scheme isappritiated and encouraged by customers. Dis advantages of ombudsman scheme: When we analyze the scheme and it is progress there is too many loopholes stillunplugged by RBI. They are as follows: (i). the ombudsman scheme is an optional one but not a proper alternative one.Because banking ombudsmans decisions are not binding in nature andreferring the matter to ombudsman is not a statutory provision, it dipponscustomers wishes and choices. (ii). The Debt Recovery Tribunal (DRT) is especially constituted for the purposes of dealing the matters of recovery of debts. Some times ombudsmaninvolve in this matter. This was reflected in durga hotel case.

(iii). There is a possible the aggrieved party of anaward passed byombudsman go to writ on high court under article 226 of inndian constitution.In many cases appeal was made against ombudsman awards. (iv). In many cases banks not responding ombudsman proceedings includingfiling the same complaint to (DRT) and struck down ombudsmans jurisdiction. (v). the enforcement of ombudsman award is not in the hands of or banks, it isin the hands of the customer according to the scheme

Case : 1 The complainant was holding a credit card of a foreign bank. He complainedthat a caller from the bank persisted in selling Medical Insurance Benefit Scheme tothe card holder though he as well as his family members did not require the same.After a few days he received a policy in the name of his son and daughter withouttaking his approval. When he called up the bank in June 2006, he was assured thatthe policies would be cancelled and later it was confirmed as well. But after a fewdays, he was advised to send a cancellation request by fax. The statement receivedshowed unpaid balance. The complainant again sent two faxes in August and September 2006 for cancellation of the policies. In the conciliation meeting held byB O o n 1 9 J a n u a r y 2 0 0 9 , t h e b a n k o f f i c i a l s t a t e d t h a t t h e r e w a s a r e c o r d e d telephonic conversation with an Insurance Company and the bank had debited theaccount of the customer on the mandate received by the Insurance Company. Therewas no written mandate with the bank from the customer for debiting his accountfor premium of the policies of the Insurance Company. The bank failed to resolvethe complaint for 2/3 years. However, with the intervention of BO, the debits of Rs.23,246/-were reversed. Case 9 The complainant maintaining an account atBank A attempted a withdrawal of Rs.25,000/-from Bank B's ATM, but no cashwas dispensed. However, his account was debited. He immediately complained toBank A and then to Banking Ombudsman subsequently. Bank A retrieved the JP

Case :2 A cheque drawn by the EPF Department on the ABC Bank's Nasik branch forRs.21.36 lakh was sent to XYZ Bank, New Delhi for credit to the accountof the complainant. The amount was not credited to the complainant's accountadvising that it had not received the cheque. The complainant, however, obtainedthe Proof of Delivery from Post Office in support of the claim that it was deliveredto the XYZ bank.. It transpired that the XYZ bank had actually misplaced thecheque before sending it for collection to ABC Bank and it had already furnished anaffidavit to the EPF Department reporting the misplacement of the cheque andrequesting for a duplicate cheque. With the intervention of BO, the bank credited

Case :3

BO received a complaint where the complainant alleged that on herhusband's death, she approached the concerned bank on November 27, 2008 forpayment of family pension and all the formalities were completed as required bythe bank. The Treasury Officer had converted the pension into family pension andadvised the bank on October 18, 2008 to make payment to the widow. Though sheh a d b e e n a p p r o a c h i n g t h e b a n k t h e r e w a s n o r e s p o n s e f r o m t h e b a n k . B O questioned the bank as to what action had been taken by them on the complaint. Onpersuasion, the bank redressed the grievances and paid the family pension to thecomplainant