1

INDEX

Abbreviations Page No. 2

Introduction to Banking Ombudsman Page No. 3
Legal and Regulatory Framework Page No. 3
Appointment of Banking Ombudsman Page No. 4
Powers and Functions of Banking Page No. 4
Ombudsman
Jurisdiction and Coverage: Page No. 5
When to Approach the Ombudsman Page No. 5
Grounds or Subject matter of Complaint Page No. 5
Non-maintainability of a Complaint Page No. 6
Rejection of a Complaint Page No. 8
Procedure to register a complaint Page No. 8
Turn Around Time (TAT) for disposal of Page No. 9
complaints
Disposal rate of complaints Page No. 10
Resolution of Complaints Page No. 10
Conclusion Page No. 11
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Abbreviations

Full-form Meaning
ORBIO Offices of RBI Ombudsmen Receipt and handling of
complaints at the Offices of
the RBI Ombudsman
CRPC Centralised Receipt and Centralised Receipt and
Processing Centre Processing Centre (CRPC)
has been set up at RBI,
Chandigarh for receiving
complaints through physical
mode (letter/post). The
CRPC undertakes initial
scrutiny and processing of
these complaints, uploads
them on CMS, which are
then assigned to Offices of
RBI Ombudsmen (ORBIOs)
or CEPCs for redressal.
CPGRAMS Centralized Public Centralised Public
Grievance Redress and Grievance Redress and
Monitoring System Monitoring System
(CPGRAMS) is an online
platform available to the
citizens 24x7 to lodge their
grievances to the public
authorities on any subject
related to service delivery. It
is a single portal connected
to all the
Ministries/Departments of
Government of India and
States.
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Banking Ombudsman

Introduction to Banking Ombudsman

The term ‘Ombudsman’ is defined as “a government official who hears and investigates
complaints by private citizens against other officials”. 1 It is understood that ombudsman is
person or employee who investigates complaints. 2

The Banking Ombudsman Scheme was introduced by the Reserve Bank of India (RBI) to
provide a quick and cost-effective platform for bank customers to seek redressal of their
grievances against deficiencies in banking services. The scheme aims to promote customer
protection, enhance transparency, and maintain trust in the banking system. The scheme was
introduced under the Banking Regulation Act of 1949 and has been in operation since 1995 3.
It was further revised and integrated into the Reserve Bank - Integrated Ombudsman Scheme,
20214.

Legal and Regulatory Framework

The Banking Ombudsman Scheme was instituted through Section 35A of the Banking
Regulation Act, 1949.5

The RBI launched the Reserve Bank - Integrated Ombudsman Scheme, 2021 on November
12, 2021. This scheme integrates the erstwhile three Ombudsman schemes of RBI namely,
the Banking Ombudsman Scheme, 2006; the Ombudsman Scheme for Non-Banking
Financial Companies, 2018; and the Ombudsman Scheme for Digital Transactions, 2019.6

Appointment of Banking Ombudsman7

1
http://www.dictionary.com/browse/ombudsman
2
The amended scheme came into effect from June 14, 2002
3
https://www.rbi.org.in/scripts/PublicationsView.aspx?Id=1848
4
The Reserve Bank - Integrated Ombudsman Scheme, 2021
5
35A. Power of the Reserve Bank to give directions
6
The Reserve Bank - Integrated Ombudsman Scheme, 2021
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As per clause 4 of reserve bank - integrated ombudsman scheme, 2021, the Reserve Bank
may appoint one or more of its officers as Ombudsman and Deputy Ombudsman, to carry out
the functions entrusted to them under the Scheme.

The appointment of Ombudsman or the Deputy Ombudsman, as the case may be, shall be
made for a period not exceeding three years at a time.

Powers and Functions of Banking Ombudsman

Powers and Functions of Banking Ombudsman as given under chapter III, clause 8:8

(1)The Ombudsman/Deputy Ombudsman shall consider the complaints of customers of

Regulated Entities relating to deficiency in service.

(2) There is no limit on the amount in a dispute that can be brought before the Ombudsman
for which the Ombudsman can pass an Award. However, for any consequential loss suffered
by the complainant, the Ombudsman shall have the power to provide a compensation up to
Rupees 20 lakh, in addition to, up to Rupees One lakh for the loss of the complainant’s time,
expenses incurred and for harassment/mental anguish suffered by the complainant.

(3) While the Ombudsman shall have the power to address and close all complaints, the
Deputy Ombudsman shall have the power to close those complaints falling under clause 10 of
the Scheme and complaints settled through facilitation as stated under clause 14 of the
Scheme.

(4) The Ombudsman shall send to the Deputy Governor, Reserve Bank of India, a report, as
on March 31st every year, containing a general review of the activities of the office during
the preceding financial year, and shall furnish such other information as the Reserve Bank
may direct.

(5) The Reserve Bank may, if it considers necessary in the public interest to do so, publish the
report and the information received from the Ombudsman in such consolidated form or
otherwise, as it may deem fit.

Jurisdiction and Coverage:

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The reserve bank - integrated ombudsman scheme, 2021 is applicable to the whole of India.9
Under the Reserve Bank - Integrated Ombudsman Scheme, 2021, the territorial jurisdictions
of the ORBIOs (Receipt and handling of complaints at the Offices of the RBI Ombudsman)
have been abrogated based on ‘One Nation, One Ombudsman’ approach and the complaints
are assigned to the 22 ORBIOs in an equitable manner as per a pre-defined algorithm in the
CMS.10

When to Approach the Ombudsman?11

One can file a complaint with the Banking Ombudsman if the reply to the registered
complaint from the regulated bank is not received within a period of one month after the
concerned bank receives the request, or the bank rejects the complaint, or if the complainant
is not satisfied with the reply given by the bank.

If a complaint is not settled by an agreement within a period of one month, the Banking
Ombudsman proceeds further to pass an Award. Before passing an award, the Banking
Ombudsman provides reasonable opportunity to the complainant and the bank, to present
their case. It is up to the complainant to accept the award in full and final settlement of or to
reject it.

Grounds or Subject matter of Complaint

As per clause 9 of Reserve Bank - Integrated Ombudsman Scheme, 2021, Any customer
aggrieved by an act or omission of a Regulated Entity resulting in deficiency in service may
file a complaint under the Scheme personally or through an authorised representative.
Authorised Representative means a person, other than an advocate, duly appointed and
authorised in writing to represent the complainant in the proceedings before the
Ombudsman.12

Grounds of complaint covered under the Reserve Bank - Integrated Ombudsman Scheme,
2021 have also been expanded to cover all complaints involving “deficiency of service”,
which has been defined under the scheme.13

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10
RBI Annual Report on Banking Ombudsman Scheme 2021-22
11
https://loksabhadocs.nic.in/Refinput/New_Reference_Notes/English/08122021_120807_102120474.pdf
12
The Reserve Bank - Integrated Ombudsman Scheme, 2021
13
RBI Annual Report on Banking Ombudsman Scheme 2021-22
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3 (g) Deficiency in service” means a shortcoming or an inadequacy in any financial service or

such other services related thereto, which the Regulated Entity is required to provide
statutorily or otherwise, which may or may not result in financial loss or damage to the
customer;14

Non-maintainability of a Complaint

Under chapter IV of clause 10 of Reserve Bank - Integrated Ombudsman Scheme, 2021,

Grounds for non-maintainability of a Complaint is provided which stipulates the following: 15

(1) No complaint for deficiency in service shall lie under the Scheme in matters involving:

(a) commercial judgment/decision of a Regulated Entity;

(b) a dispute between a vendor and a Regulated Entity relating to an outsourcing contract;

(c) a grievance not addressed to the Ombudsman directly;

(d) general grievances against Management or Executives of a Regulated Entity;

(e) a dispute in which action is initiated by a Regulated Entity in compliance with the orders
of a statutory or law enforcing authority;

(f) a service not within the regulatory purview of the Reserve Bank;

(g) a dispute between Regulated Entities;

(h) a dispute involving the employee-employer relationship of a Regulated Entity;

(i) 8 a dispute for which a remedy has been provided in Section 18 of the Credit Information
Companies (Regulation) Act, 2005; and

(j) a dispute pertaining to customers of Regulated Entity not included under the Scheme.

(2) A complaint under the Scheme shall not lie unless:

(a) the complainant had, before making a complaint under the Scheme, made a written
complaint to the Regulated Entity concerned and –

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The Reserve Bank - Integrated Ombudsman Scheme, 2021
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(i) the complaint was rejected wholly or partly by the Regulated Entity, and the
complainant is not satisfied with the reply; or the complainant had not received any
reply within 30 days after the Regulated Entity received the complaint; and

(ii) the complaint is made to the Ombudsman within one year after the complainant
has received the reply from the Regulated Entity to the complaint or, where no reply is
received, within one year and 30 days from the date of the complaint.

(b) the complaint is not in respect of the same cause of action which is already-

(i) pending before an Ombudsman or settled or dealt with on merits, by an

Ombudsman, whether or not received from the same complainant or along with one or more
complainants, or one or more of the parties concerned;

(ii) pending before any Court, Tribunal or Arbitrator or any other Forum or Authority;
or, settled or dealt with on merits, by any Court, Tribunal or Arbitrator or any other
Forum or Authority, whether or not received from the same complainant or along with
one or more of the complainants/parties concerned;

(c) the complaint is not abusive or frivolous or vexatious in nature;

(d) the complaint to the Regulated Entity was made before the expiry of the period of
limitation prescribed under the Limitation Act, 1963, for such claims;

(e) the complainant provides complete information as specified in clause 11 of the Scheme;

(f) the complaint is lodged by the complainant personally or through an authorised

representative other than an advocate unless the advocate is the aggrieved person.

Explanation 1: For the purposes of sub-clause (2)(a), ‘written complaint’ shall include
complaints made through other modes where proof of having made a complaint can be
produced by the complainant.

Explanation 2: For the purposes of sub-clause (2)(b)(ii), a complaint in respect of the same
cause of action does not include criminal proceedings pending or decided before a Court or
Tribunal or any police investigation initiated in a criminal offence.
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Rejection of a Complaint

Under Clause 16 of Reserve Bank - Integrated Ombudsman Scheme, 2021, the Rejection of a
Complaint is outlined as follows:16

(1) The Deputy Ombudsman or the Ombudsman may reject a complaint at any stage if it
appears that the complaint made:

(a) is non-maintainable under clause 10; or

(b) is in the nature of offering suggestions or seeking guidance or explanation

(2) The Ombudsman may reject a complaint at any stage if:

(a) in his opinion there is no deficiency in service; or

(b) the compensation sought for the consequential loss is beyond the power of the
Ombudsman to award the compensation as indicated in clause 8(2); or

(c) the complaint is not pursued by the complainant with reasonable diligence; or

(d) the complaint is without any sufficient cause; or

(e) the complaint requires consideration of elaborate documentary and oral evidence
and the proceedings before the Ombudsman are not appropriate for adjudication of
such complaint; or

(f) in the opinion of the Ombudsman there is no financial loss or damage, or

inconvenience caused to the complainant.

Procedure to register a complaint

Under Chapter 4, Clause 11 of Reserve Bank - Integrated Ombudsman Scheme, 2021, the
Procedure for Filing a Complaint is outlined as follows: 17

(1) The complaint may be lodged online through the portal designed for the purpose
(https://cms.rbi.org.in).

(2) The complaint may also be submitted through electronic or physical mode to the
Centralised Receipt and Processing Centre as notified by the Reserve Bank. The complaint, if
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17
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submitted in physical form, shall be duly signed by the complainant or by the authorised
representative. The complaint shall be submitted in electronic or physical mode in such
format and containing such information as may be specified by Reserve Bank.

In simpler terms, the Complaints can be received at the ORBIOs either through CMS portal 18
or CRPC (Centralised Receipt and Processing Centre) After preliminary scrutiny, CRPC
assigns the actionable complaints received through email, physical mode and CPGRAMS
(the GoI portal for receipt and monitoring of complaints from the public) to the ORBIOs. As
per Annual Report of Ombudsman Scheme, 2022-23, the total of 85.64% of the complaints
received at the ORBIOs were lodged through digital mode using CMS Portal / email /
CPGRAMS portal.19

Turn Around Time (TAT) for disposal of complaints

As per Annual Report of Ombudsman Scheme, 2022-23;20

The average TAT for disposal of complaints at the ORBIOs has improved continuously from
95 days in 2019-20 to 33 days 2022-23. This decline is in consonance with the enhanced
efficiencies brought about in the system on the back of the process re-engineering and
structural changes introduced under the Reserve Bank - Integrated Ombudsman Scheme,
2021. Focused efforts are being made to further optimize the TAT while ensuring quality
disposal.

Disposal rate of complaints

As per Annual Report of Ombudsman Scheme, 2022-23;21

The ORBIOs maintained a healthy disposal rate of 97.99% during the year. Further, there was
a significant decline in the number of complaints pending beyond 30 days, from 0.26% as on
March 31, 2022 to 0.04% as on March 31, 2023.

Resolution of Complaints
18
https://cms.rbi.org.in/cms/indexpage.html#eng
19
Annual Report of Ombudsman Scheme, 2022-23
20
Annual Report of Ombudsman Scheme, 2022-23
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Under Clause 14 of the Reserve Bank - Integrated Ombudsman Scheme, 2021, the resolution
of complaints is stipulated as follows:22

(1) The Ombudsman/Deputy Ombudsman shall endeavour to promote settlement of a

complaint by agreement between the complainant and the Regulated Entity through
facilitation or conciliation or mediation.

(2) The proceedings before the Ombudsman shall be summary in nature and shall not be
bound by any rules of evidence. The Ombudsman may examine either party to the complaint
and record their statement.

(3) The Regulated Entity shall, on receipt of the complaint, file its written version in reply to
the averments in the complaint enclosing therewith copies of the documents relied upon,
within 15 days before the Ombudsman for resolution. Provided that the Ombudsman may, at
the request of the Regulated Entity in writing to the satisfaction of the Ombudsman, grant
such further time as may be deemed fit to file its written version and documents.

(4) In case the Regulated Entity omits or fails to file its written version and documents within
the time as provided in terms of sub-clause (3), the Ombudsman may proceed ex-parte based
on the evidence available on record and pass appropriate Order or issue an Award. There shall
be no right of appeal to the Regulated Entity in respect of the Award issued on account of
non-response or non-furnishing of information sought within the stipulated time.

(5) The Ombudsman/Deputy Ombudsman shall ensure that the written version or reply or
documents filed by one party, to the extent relevant and pertaining to the complaint, are
furnished to other party and follow such procedure and provide additional time as may be
considered appropriate.

(6) In case the complaint is not resolved through facilitation, such action as may be
considered appropriate, including a meeting of the complainant with the officials of
Regulated Entity, for resolution of the complaint by conciliation or mediation may be
initiated.

(7) The parties to the complaint shall cooperate in good faith with the Ombudsman/Deputy
Ombudsman, as the case may be, in resolution of the dispute 10 and comply with the
direction for production of any evidence and other related documents within the stipulated
time.
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The Reserve Bank - Integrated Ombudsman Scheme, 2021
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(8) If any amicable settlement of the complaint is arrived at between the parties, the same
shall be recorded and signed by both the parties and thereafter, the fact of settlement may be
recorded, annexing thereto the terms of settlement, directing the parties to comply with the
terms within the stipulated time.

(9) The complaint would be deemed to be resolved when: (a) it has been settled by the
Regulated Entity with the complainant upon the intervention of the Ombudsman; or (b) the
complainant has agreed in writing or otherwise (which may be recorded) that the manner and
the extent of resolution of the grievance is satisfactory; or (c) the complainant has withdrawn
the complaint voluntarily.

Conclusion
The Banking Ombudsman Scheme, established by the Reserve Bank of India, serves as a
vital recourse for resolving disputes and addressing grievances within the banking sector.
With its inception in 1995 and subsequent integration into the Reserve Bank - Integrated
Ombudsman Scheme, 2021, it has evolved to ensure efficient and transparent redressal
mechanisms for customers. By upholding principles of fairness, accountability, and
regulatory compliance, the scheme not only protects consumer rights but also fosters trust and
confidence in the banking system. Through continuous improvements in processes, enhanced
digitalization, and stringent adherence to standards, the scheme stands as a cornerstone of
customer-centricity and regulatory oversight within the Indian financial landscape.