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"OMBUDSMAN IN BANKING
SECTOR"
Bachelor of commerce
Banking & Insurance (B.C.B.I)
Semester-v
Submitted
In partial of requirement for the Award of Degree of
bachelor of commerce (Banking & Insurance)
By
HONEY GIANCHAND PESWANI
UNIVERSITY OF MUMBAI
(2014-2015)
DECLARATION
I, "Honey G. Peswani" a student of Third year
Honey G. Peswani
(STUDENT)
CERTIFICATE
I, "Prof. Teena kachhela" hereby certify that "Honey
G. Peswani" of Third year Bachelor of commerce in
Banking & Insurance (B.C.B.I) J.WATUMALL SADHUBELLA
Signature
Signature
Banking Ombudsman
It is the most pleasant part of any project to express gratitude
towards all those who helped me out to complete this project.
My deepest thanks to my project guide Prof. Mrs.TEENA
KACHHELA and as well as our Co-ordinator Prof. Mrs.SMITA
CHAWAK for guiding and correcting various documents of mine
with attention and care. She has taken pain to go through the
project and make necessary corrections as and when needed.
I would also like to thank the college authorities, our principal
Prof.R.H. Suryarao for authorizing my project.
EXECUTIVE SUMMARY
The aim of this project is to intoduce the reader to the topic of
"OMBUDSMAN IN BANKING SECTOR". the projct also deals
with the policy adopted by the RBI and the excess of case laws.
the ability of the banking industry to achieve the socio-economic
objectives and in the process bringing more and more customers
into its fold will ultimately depend on the satisfaction of the
customers. Banks have a strong belief that a satisfied customer is
the foremost factor in developing our business. This project is
focused in understanding the essentiality of the Banking
Ombudsman in regards to the public interest and the interest of
the banking policies to enable resolution of companies related to
deficiency in banking services
objectives
To present Banking Ombudsman scheme & how it does work.
To explain the duties, functions & powers of the Ombudsman.
To show how the Banking Ombudsman deals with customer
complaints.
To present the services of the Banking Ombudsman offered to the
customer.
Methodology
The methodology includes the information of the features of the
Ombudsman in the form of primary data that had been received
from the branch manager of the Banks. It also includes the
informations from the related books and from the related
Websites.
INTRODUCTION
The basic services a bank provides are checking accounts, which
can be used like money to make payments and purchase goods
and services; savings accounts and time deposits that can be
used to save money for future use; loans that consumers and
busineses can use to purchase goods and services; and basic
cash management services such as check cashing and foreign
currency exchange. Four types of banks specalize in offering
INTRODUCTION
Banking ombudsman is a quasi judicial authority functioning
under India's Banking Ombudsman scheme 2006, and the
authority was created pursuant to the decision by the government
of India to enable resolution of complaints of customers of banks
relating to certain services rendered by the banks. The banking
ombudsman scheme was first introduced in India in 1995 , and
was revised in 2002 and 2006. In the wake of the failure in the
efficient services of the banks, the RBI brought a scheme for the
prompt, efficient and courteous services and also to protect the
rights of the customers. The Banking Ombudsman is an official
authority to investigate the complaint from the customers and
address the complaint and thereby bring the solution among the
agreed party. So the Banking Ombudsman plays the role of
mediator and serves the purpose of reconciliation of the Banking
Ombudsman, 2006.
SECRETARIAT
The Reserve bank shall depute such number of its officers
or other staff to the office of the Banking Ombudsman as
is considered necessary to function as the secretariat of
the Banking Ombudsman. The cost of the secretariat shall
be borne by Reserve bank.
TYPES OF OMBUDSMAN
Banking Ombudsman
S.E.B.I Ombudsman
Electricity Ombudsman
Telecom Ombudsman
Income tax Ombudsman
Insurance Ombudsman
Banking Ombudsman
The Reserve Bank of India (RBI) first introduced the Banking
Ombudsman scheme in 1995, which has been revised in 2002
and 2005. The latest revised scheme has come into force from 1 st
January 2006.
S.E.B.I Ombudsman
The Securities Exchange Board of India (SEBI) under
section 30 read with sub section (1) of section 11 of the
SEBI Act,1992, has framed the SEBI (Ombudsman)
regulations, 2003, which were notified on 21st August
2003 . the Regulations provided for the establishment of
the office of Ombudsman to redress the grievance of
investors in securities and connected matters. The listed
companies and registered stock intermediaries have to
disclose the name address and other particulars of
ombudsman in their for the benefit of the investors.
Electricity Ombudsman
The Electricity Regulatory Ombudsman Commission, under
section 181 read with sub-section (5) of section 42 of the
Electricity Act, 2003, issues guidelines for establishment of forum
and Ombudsman for redressal of grievances of Electricity
consumers, The Delhi Regulatory Commission (DERC) vide its
Notifications dated 11th March, 2006 has issued DERC (Guidelines
for establishment of forum of redressal of grievance of the
Telecom Ombudsman
The Telecom Regulatory Authority of India Act, 1997, empowers
the Telecom Regulatory Authority of India Act 1997, empowers the
Telecom Regulatory Authority of India (TRAI) to make the
recommendations on laying down the standards of quality of
services to be provided by the services providers and conduct the
interest of the periodical surveys of Telecom services so as to
protect the interest of the consumers. The telecom operaters
frequently threaten to disconnects the phones and with draw the
numbers given to subscribers if the deadline for payment is
missed by a day or there is miscalculation of the tiniest amount.
The TRAI is, however, neither empowered to look into the
grievances of individual customers nor take action against the
operates who do not meet quality of standards As there is no
specialized body to redress the grievance of telecom customers,
they have to approach consumer forum setup under the
Consumer Protection Act, 1986, or civil courts for Resolution
adjudication of disputes.
Insurance Ombudsman
The Government of India, Minister of Finance, Department of
Economies Affairs, Insurance Division under section 114 (1) of
Insurance Act, 1938, has framed the Redressal of Public
Grievance Rules, 1998, for appointment of Insurance
Ombudsman, which comes into force with effect from 11 th
November 1998. The Insurance Ombudsman has started
functioning from 1999, to provide for efficient, cost and impartial
settlement of claims and grievance of any person against a Life or
General Insurance in Public and Private sector. The meaning of
expression any other person is wider than consumer and
therefore, even third party having grievance with respect to an
Insurance contract can approach the Ombudsman.
GROUNDS OF CUSTOMER COMPLAINTS CONSIDERED
BY BANKING OMBUDSMAN
The Banking Ombudsman can receive and consider any
complaint relating to the following deficiency in banking
services (including internet banking):-
One has not made the complaint within one year from the
date one has received the reply of the bank or if no reply is
received if it is more than one year and one month from the
date of representation to the bank.
Frivolous or vexatious.
The complaint should be made before one year, from the day the
complainant has received the reply of the bank to his representation or,
where no reply is received, before one year and one month from the date of
the representation to the bank;
The compalint does not touch upon matter which was settled or dealt with on
merits by the Banking Ombudsman in any prevoius proceedings whether or
not received from the same complainant or along with one or more
complainants or one or more of the parties concerned with the subject
matter.
The complaint does not pertain to the same subject matter, for which any
proceedings before any court, tribunal or arbitrator or any other forum is
pending.
A decree or Award or order has been passed by any such court, tribunal,
arbitrator or forum;
The complaint is made before the expiry of the period of limitation prescribed
under the Indian Limitation Act, 1963 for such claims.
Appeal
If the customer is not satisfied with the award of the Banking
Ombudsman, he can approach to the RBI, to the appellate called
Deputy Governor, Still he is not satisfied, after approaching to the RBI,
he can go the High court.
INTRODUCTION
The Banking Ombudsman Scheme, 1995 was notified by RBI on June
14, 1995 in terms of the powers conferred on the Bank by Section 35A of the
Banking Regulation Act, 1949 to provide for a system sought to establish a system
of expeditious and inexpensive resolution of customer complaints. The Scheme is in
operation since 1995 and has been revised during the years 2002 and 2006. The
Scheme is being executed by Banking Ombudsman appointed by Reserve Bank at
15 centers covering the entire country. As mandated by the Banking Ombudsman
Scheme, the Banking Ombudsman submit an Annual Report on the functioning of
their offices every year. Based on such reports, an Annual Report for the Banking
Omudsman Scheme in a whole is prepared at Reserve Bank of India, Central Office.
As is being the practice, the Annual Report covers the last five-year period with
focus on the current year. Further, as a result of computerization of the functioning
of Banking Ombudsman Offices through the Complaint Tracking Software, detailed
analysis was possible on the information pertaining to year 2006-07. With the
decesion to merge the Banking Ombudsman Offices with that of RBI Offices, the
accounting period for the Banking Ombudsman Offices was changed from April 1March 31 to July 30 to be in congruent with that of RBI Offices. Accordingly, the
information analyzed for the year 2006-07 pertains to the period July 1, 2006 to
June 30, 2007.