By : Group 4

• Jayalaxmi
Desai
• Kevin Ladani
• Manish
Jagwani
• Piyush Singh
• Samarth Khare
• Sameer Tigga 1
 Topics Covered
• Introduction
• Banking Ombudsman Scheme,
2006
• Grounds of Complaints
• Case Studies
• Grievances Redressal
• Rejection of Complaints
• Appeals
• Facts
• Summary 1
Introduction
 Bank
Banking is defined accepting for the purpose of
lending and investment, deposit of money from
the public repayable on demand or otherwise and
withdraw by cheque, draft order or otherwise.

Ombudsman
An official appointed to investigate individual’s
complaint against maladministration especially
that of public authorities.

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 Banking Ombudsman Scheme

The Banking Ombudsman Scheme enables an

expeditious and inexpensive forum to bank
customers for resolution of complaints relating to
certain services rendered by banks

Need Of Banking Ombudsman….

3
 Vision
To be a visible and credible system of dispute
resolution mechanism for common persons
utilizing banking services

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 Goals
• To ensure redressal of grievances of users of banking
services in an inexpensive, expeditious and fair manner
that will provide impetus to improved customer services in
the banking sector on a continuous basis

• To provide feedback/suggestions to Reserve Bank of

India towards framing appropriate and timely guidelines to
banks to improve the level of customer service and to
strengthen their internal grievance redressal systems

• To enhance the awareness of the Banking Ombudsman

Scheme

•To facilitate quick and fair (non-discriminatory) redressal

of grievances through use of IT systems, comprehensive
and easily accessible database and enhanced capabilities
5
Banking Ombudsman
Scheme, 2006
 Appointment and Tenure
• The Reserve Bank may appoint one or more of
its officers in the rank of Chief General Manager
or General Manager to be known as the banking
ombudsmen

• They carry out the functions entrusted to them by

or under the scheme

•This appointment may be made for a period not

exceeding three years at a time

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 Qualification
The Banking Ombudsman shall be a person of
repute experience in the field of
• Law
• Banking
• Financial services
• Public administration or
• Management sectors
 Qualification (Cont.)

• If such person is a civil servant he should be in

the rank of joint secretary or above in the
Government of India and

• Incase of such person being from banking

sector, he should had the experience of working
as a whole time Director in a public sector or
equivalent position
 Territorial Jurisdiction and
Location of Office
• The Reserve Bank shall specify the territorial
limits to which the authority of each of the
banking ombudsman shall extend

• The office of the banking ombudsman will be

located at such places as may be specified by
the Reserve Bank
 Sittings

The banking ombudsman may hold sittings

at such places within his area of jurisdiction
as may be considered necessary and
proper by him, in respect of a complaint or
reference before him
 Secretariat
• The Reserve Bank shall depute such number of
its officers and other staff to the office of the
banking ombudsman as considered necessary to
function as the secretariat of the banking
ombudsman

• The cost of the secretariat will be borne by the

Reserve Bank
 General Powers of Banking
Ombudsmen
• To receive complaints relating to banking
services
• To consider such complaints relating to the
deficiencies in the banking and other services and
facilitate their satisfaction or settlement by
agreement through conciliation and mediation
between the bank and the aggrieved parties or by
passing an award in accordance with the scheme
 Powers to Call for Information
 Banking Ombudsman may require the bank
against whom the complaint is made or any
other bank concerned with the complaint to
provide any information or furnish certified
copy of any document relating to the complaint
which is or alleged to be in its possession

 The Banking Ombudsman shall maintain

confidentiality of such information
 Grounds On Which The
Banking Ombudsman
Can Receive And Consider
Complaints

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 Deficiency in services
(including internet banking)
 Non-payment or inordinate delay in the
payment or collection of cheques, drafts, bills
etc

 Delay in payment of inward remittances

 Delay / failure of issuing drafts / pay orders /

bankers cheque / banking facility

 Delay and failure in providing necessary

banking services and products like debit cards,
 Complaints of accounts operated by NRI

 Refusal in opening the deposit account and levying

additional charges for the products without informing
the customer

 Non Adherence to the RBI guidelines in the matter of

credit and debit cards

 Delay in disbursing of pension

 Refusal / delay in accepting payment towards taxes

 Delay / refusal in servicing or redemption of

government securities

 Refusal / delay in closing of accounts

 Non-adherence to the fair practices code as
adopted by the bank or 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

 Non-observance of RBI guidelines on

engagement of recovery agents by bank

 Any other matter relating to the violation of the

directives issued by the RBI in relation to
banking or other services
 Deficiency in Services
(loans and advances)
 Non – compliance of interest rates as per
guidelines from RBI

 Delays in sanction, disbursement or non-

observance of prescribed time schedule for
disposal of loan applications

 Non-acceptance of loan application without

furnishing valid reasons

 Non-observance of any other directions or

instructions of the RBI from time to time.
CASES

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CASE 1
The complainant was having a Saving Bank
Account with the opposite party bank. Being
an employee of TCS, his salary and other
allowances were being directly credited to his
account with the bank. He alleged that the
bank had issued a cheque-book without his
knowledge to someone else and had passed
cheques which were not drawn by him. The
total amount so fraudulently withdrawn from
his account amounted to Rs.977,000/-. A
police complaint was also filed. 23
DECISION
The subsequent developments after filing of the
police complaint and the opinion given by the GEQD,
leads to an irrefutable conclusion that the culprits had
made fraudulent withdrawals by forging the signature
of the complainant. In the circumstances, prima facie
forgery had been established. Legally if the drawer’s
cheque is forged or unauthorised, however clever the
forgery is, the banker cannot debit his customer’s
account. The complainant was out of India during the
material time. The bank could not bring out any
evidence/proof that the complainant was in any way
connected with the fraud or his involvement in the
forgery hence the bank had to pay for the losses.
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CASE 2
The complainant’s husband and had deposited Rs.
15000/- jointly in the name of self and her name in
the bank as on 9.3.93 for one year and the deposit
matured on 9/3/94. As on 15.2.96 he expired. When
the complainant had approached the bank and
produced the death certificate and the marriage
certificate and informed that the deposit receipt is lost
and asked for the payment of the deposit proceeds,
the bank did not make payment and informed that
they wanted clearance from their controlling office
regarding the heir of the depositor since the
deceased had left behind his first wife and children. 25
DECISION
As per RBI guidelines the bank should not
insist upon succession certificate where the
amount to the credit of a deceased depositor
does not exceed Rs.25,000/-. As directed
earlier by RBI, BO advised that the intention of
the depositor to add the name of his wife in the
deposit payable jointly was that the deposit
should go to the second beneficiary on his
death. The bank was advised to make payment
to the complainant after obtaining an indemnity
and after following usual formalities such as
verification of signature and identity etc.

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CASE 3
The complainant, when he tried to
withdraw cash through ATM, there was
power supply failure and he could not
withdraw cash whereas his account was
debited by Rs. 600/-. The complainant
reported the matter to the bank. But in-
spite of his request and telephonic talk the
bank did not take any action and replied
that he might have withdrawn the cash as
per the list of transactions available with
them.
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DECISION
On perusal of the disputed transactions
and cash summary as per ATM, the
bank found that the cash was not
dispensed for the disputed transaction
and they reimbursed the amount

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Redressal of Greiveances
PROCEDURE FOR REDRESSAL OF
GRIEVANCE
• Any person who has a grievance against a bank
on any one or more of the grounds mentioned in
Clause 8 of the Scheme may, himself or through
his authorized representative (other than an
advocate), make a complaint to the Banking
Ombudsman within whose jurisdiction the branch
or office of the bank complained against is located

•The complainant shall file along with the

complaint, copies of the documents, if any, which
he proposes to rely upon

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 A complaintmade through electronic means shall
also be accepted by the Banking Ombudsman.

 The Banking Ombudsman shall also entertain

complaints covered by this Scheme received by
Central Government or Reserve Bank and forwarded
to him for disposal.

 The application generates unique complaint ID

 Automatic acknowledgement generated on tracking

of complaints

 RBI and Finance ministry can also monitor the

status of the complaints
No Complaint To Banking Shall
Lie Unless
 The complainant had, before making a complaint
to the Banking Ombudsman, made a written
representation to the bank and the bank had
rejected the complaint.

 The complainant had not received any reply within

a period of one month after the bank received his
representation.

 The complaint is made not later than one year

after the complainant has received the reply of the
bank to his representation or, where no reply is
received.
• The complaint does not pertain to the same
cause of action, for which any proceedings
before any court, tribunal or arbitrator or any
other forum is pending.

• The complaint is not frivolous or vexatious in

nature.
Settlement Of Complaints
 SETTLEMENT OF COMPLAINT
BY AGREEMENT

 Assoon as it may be practicable to do, the Banking

Ombudsman shall send a copy of the complaint to the
branch or office of the bank named in the complaint

For the purpose of promoting a settlement of the

complaint, the Banking Ombudsman may follow such
procedure as he may consider just and proper .
Awards
 AWARD BY THE BANKING
OMBUDSMAN
The Banking Ombudsman shall take into account
aspect while passing Award.

 The Award passed shall contain the direction/s, if any,

to the bank for specific performance of its obligations and
in addition to or otherwise, the amount, if any, to be paid
by the bank to the complainant by way of compensation
for any loss suffered by the complainant.

The Banking Ombudsman shall not have the power to

pass an award directing payment of an amount which is
more than the actual loss suffered by the complainant.
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

 A copy of the Award shall be sent to the complainant

and the bank

 An award shall lapse and be of no effect unless the

complainant furnishes to the bank concerned within a
period of 30 days from the date of receipt of copy of the
Award
Rejection of Complaints
 Rejection of Complaint

The Banking Ombudsman may reject a

complaint at any stage if it appears to him that
the complaint made is :

•Not on the grounds of complaint referred to in

clause 8 or

•Beyond the pecuniary jurisdiction of Banking

Ombudsman or

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 Requiring consideration of elaborate
documentary and oral evidence and the
proceedings before the Banking Ombudsman
are not appropriate for adjudication of such
complaint; or

 That it is not pursued by the complainant with

reasonable diligence; or

 In the opinion of the Banking Ombudsman

there is no loss or damage or inconvenience
caused to the complainant.
 Appeal Before The Appellate
Authority
 Any person aggrieved by an Award or
rejection of a complaint for the reasons
referred to in sub clauses (d) to (f) of clause
13 of RBI guidelines, may within 30 days of
the date of receipt of communication of Award
or rejection of complaint, prefer an appeal
before the Appellate Authority;
 Provided that in case of appeal by a bank, the
period of thirty days for filing an appeal shall
commence from the date on which the bank
receives letter of acceptance of Award by
complainant.
 Provided that the Appellate Authority may, if he
is satisfied that the applicant had sufficient
cause for not making the appeal within time,
allow a further period not exceeding 30 days;

 Provided further that appeal may be filed by a

bank only with the previous sanction of the
Chairman or, in his absence, the Managing
Director or the Executive Director or the Chief
Executive Officer.
 Action To Be Taken By Appellate
Authority
 Dismiss the appeal; or

 Allow the appeal and set aside the Award; or

 Remand the matter to the Banking Ombudsman for

fresh disposal in accordance with such directions as
the Appellate Authority may consider necessary or
proper; or

 Modify the Award and pass such directions as may be

necessary to give effect to the Award so modified; or

 Pass any other order as it may deem fit

 Fact Sheet
Analysis

Source :
Annual Report on Banking
Ombudsman 2011-12,
Published by Reserve Bank of
India
 Number of Complaints Received
2009-10 2010-11 2011-12
No. of OBO 15 15 15
Complaints 79266 71274 72889
Received
Increase over 15% (-11%) 2%
previous year

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 Population Group Wise
Distribution of Complaints
2009-10 2010-11 2011-12
Rural 32% 11% 11%
Semi Urban 14% 15% 16%
Urban 21% 30% 34%
Metropolitan 34% 44% 39%
Total 79266 71274 72889
 Mode Wise Complaints Received
Mode 2009-10 2010-11 2011-12

Email 12% 14% 13%

Online 14% 13% 14%

Post/Fax 74% 73% 73%

Total 79266 71274 72889

 Bank Group Wise
Bank Group 2009-10 2010-11 2011-12
Nationalised Bank 24% 29% 31%
SBI and Associates 29% 31% 35%
Private Sector Banks 28% 24% 21%
Foreign Banks 14% 10% 7%
RRBs/ Urban Co- 2% 2% 2%
Operatives
Others 3% 4% 4%
Total Complaints 79266 71274 72889
 Category Wise Distribution of Complaints
Grounds of complaints 2009-10 2010-11 2011-12
Deposit Accounts 5% 2% 2%
Remittances 7% 6% 5%
Cards Related 24% 24% 21%
Loans and Advances 8% 6% 8%
Levy of Charges without 6% 6% 5%
Notice
Pension payments 6% 8% 8%
Failure to meet commitments 14% 23% 25%
DSA/ Recovery Agents 2% 2% 1%
Notes and Coins .2% .2% .2%
Others 24% 10% 10%
Out of Subject 3% 11% 5%
 Position of Disposal of Complaints
No. of Complaints 2009-10 2010-11 2011-12
Received during the 79266 71274 72889
year
Brought Forward from 9433 5364 4618
previous year
Handled during the 88699 76638 77507
year
Disposed off during 83335 72020 72885
the year
Rate of Disposal 94 94 94

Carried forward 5364 4618 4622

 Classification of Complaints Disposed
2009-10 2010-11 2011-12
Maintainable 46555 35499 37455(51
(56%) (49%) %)
• Non maintainable 16523(20%) 16755(23%) 14352(20%
(Being First Resort )
Complaints)
• Non Maintainable 20257(24%) 19766(28%) 21078(29%
(others) )
Total Non 36780(44%) 36521(51% 35430(49
Maintainable ) %)
Total 83335 72020 72885
Complaints
Disposed
 Modes of Disposal of Maintainable
Complaints
Disposal Mode 2009-10 2010-11 2011-12
By Mutual 67 60 54
Settlement
By award 1 1 1
By Rejection 32 39 45
Total Complaints 46555 35499 37455
Disposed
 Cost of Handling Complaints
2009-10 2010-11 2011-12
Total Cost (in 197.4 260.7 281.1
million Rs.)
Complaints 83335 72021 72889
Disposed
Cost per complaint 2368 3619 3858
(in Rs)
 Position of Appeals Received
2009-10 2010-11 2011-12
Appeals brought forward 121 34 0
Appeals from 271 93 314
complainants during the
year
Appeals from bank 37 40 37
during the year
Total Appeals Received 308 13 351
during the year
Total Appeals handled 429 167 351
Appeals Disposed 395 167 338
Appeals Pending at the 34 (8%) 0 13(4%)
close
 Disposal of Appeals
2009-10 2010-11 2011-12
Appeals remanded to 23 (6%) 9 (5%) 0
BO
Appeals withdrawn / 20 (5%) 32(19%) 1 (.3%)
settled
Appeals rejected by 269 71 (43%) 327(97
AA (68%) %)
Appeals allowed by 83 (21%) 55 (33%) 10 (3%)
AA
Totals Appeals 395 167 338
Disposed (92%) (100%) (96%)
Appeals pending as 34 (8%) 0 13 (4%)
on June 30
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 Working Group
In January 2013, seeking to improve banking
services and ensure speedy redressal of
grievances of customers, the Reserve Bank of
India has set up a working group to update the
Banking Ombudsman Scheme, 2006.

Two BOs, representatives from regulatory

Departments of RBI, IBA(Indian Banks
Association) and BCSBI(Banking Codes and
Standards Boards of India) are the members of
the Working Group
Terms of reference of the Working Group are:

• i. Grounds of complaints that have become

redundant
ii. Grounds of complaints that need to be
added to reflect consumer aims.

• To examine need for extending the pecuniary

jurisdiction of the BOS

• To examine the issues involved in extending the

BOS to Non-Scheduled Urban Co-operative
Banks and District and State level Apex Co-
operative Banks
Cont..
69
• To examine the recommendations of the
Committee on Customer Service in Banks
(Damodaran Committee) and the
recommendations of the 183rd report of the Rajya
Sabha Committee on Subordinate Legislation

• Review of the grounds of appeal under the BOS

- to identify appropriate Clauses of the Scheme
for the purpose

70
 References :
•
http://www.abhinavjournal.com/images/Commerce_&_Management/Jan12/3
-Dake.pdf

• http://law.bepress.com

• www.bankingombudsman.rbi.org.in

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Thank You

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