25 Banking Awareness Banking Ombudsman Scheme

Banking Awareness
Banking Ombudsman
Scheme
Banking Awareness
Banking Ombudsman Scheme
Establishment: 2006 under Section 35 A of the Banking Regulation Act, 1949
Established by: RBI
Tenure: The Banking Ombudsman will be appointed for a period not exceeding three years
and be eligible for the extension for a further period not exceeding two years subject to an
overall age limit of 65 years.
History: The RBI Ombudsman was created in the year 2006 by the Government of India.
However, the Banking Ombudsman scheme was introduced in India way back in the year
1995. The scheme that is now in power was enacted in 2006, replacing the Banking
Ombudsman scheme that came into being in the year 2002.
Banks covered: All commercial banks (scheduled and non-scheduled, public and private),
Regional rural banks, scheduled primary cooperative banks
Objective: Its main objective is to enable the resolution of complaints relating to certain
services rendered by banks and to facilitate the satisfaction or settlement of such
complaints.
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Who appoints: The Banking Ombudsman is a senior official appointed by the Reserve Bank
of India to redress customer complaints against deficiency in certain banking services
covered under the grounds of complaint specified under Clause 8 of the Banking
Ombudsman Scheme 2006
Role:
1. The Ombudsman investigates complaints against public bodies and, where
appropriate, recommends redress.
2. The Banking Ombudsman can receive and consider any complaint relating to
several deficiencies related to banking operations including Internet banking.
3. The Reserve Bank extended the scope of the Banking Ombudsman Scheme under
which banks could be penalised for mis-selling third-party products like insurance
and mutual funds via mobile or electronic banking.
Power and Functions:
To receive complaints relating to the provision of banking services to consider such
complaints and facilitate their satisfaction or settlement by agreement, by making a
recommendation, or award under this scheme.
1. An important function of the Ombudsman is to protect the rights and freedoms of
citizens and needless.
2. The ombudsman shall have the power to supervise the general civil administration.
On this point, the duty of the ombudsman is closely connected with the public
administration.
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3. They investigate complaints that haven't been solved by the organisation complained
against.
4. Ombudsmen investigate complaints when something has been handled badly or
unfairly, making someone suffer as a result. This is sometimes called
maladministration.
Types of Complaints redressed:
1. Non-payment or delay in payment of inward remittances or non-payment of the same
can also be raised with the banking ombudsman.
2. Delay in the issue of drafts, pay orders or bankers’ cheques, and/or failure to issue
such drafts and cheques.
3. Inordinate delay in the payment, or non-payment, delay in collection of cheques,
drafts, bills etc.
4. Bank refuses to open your account without giving valid reasons.
5. Your loan application is accepted, but the money is not released in time.
6. Cases where the bank has failed or delayed in providing banking facilities, other than
loans, promised by the bank in writing or by a direct agent.
7. The bank levying charges without adequate prior notice to the customer.
8. Customers can take cases up to the banking ombudsman in case of non-adherence
to the instructions of the Reserve Bank on ATM or debit card, prepaid card, and
credit cards.
● A customer can file a complaint before the Banking Ombudsman if the bank doesn’t
give a reply to the customer within one month the bank rejects the complaint, or if the
complainant is not satisfied with the reply by the bank.

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● The Banking Ombudsman may award compensation not exceeding ₹ 1 lakh (₹ One
Hundred Thousand) to the complainant for mental agony and harassment.
Ombudsman Scheme Maximum limit for the amount under dispute Compensation for Banks: Rs.20
lakhs
Ombudsman Scheme Maximum Compensation for NBFCs: Rs.10 Lakhs

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25 Banking Awareness Banking Ombudsman Scheme

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Banking Awareness

Banking Ombudsman Scheme

Establishment: 2006 under Section 35 A of the Banking Regulation Act, 1949

Established by: RBI

overall age limit of 65 years.

Ombudsman scheme that came into being in the year 2002.

Regional rural banks, scheduled primary cooperative banks

services rendered by banks and to facilitate the satisfaction or settlement of such

of India to redress customer complaints against deficiency in certain banking services

Ombudsman Scheme 2006

1. The Ombudsman investigates complaints against public bodies and, where

appropriate, recommends redress.

several deficiencies related to banking operations including Internet banking.

and mutual funds via mobile or electronic banking.

Power and Functions:

To receive complaints relating to the provision of banking services to consider such

complaints and facilitate their satisfaction or settlement by agreement, by making a

recommendation, or award under this scheme.

1. An important function of the Ombudsman is to protect the rights and freedoms of

citizens and needless.

4. Ombudsmen investigate complaints when something has been handled badly or

unfairly, making someone suffer as a result. This is sometimes called

Types of Complaints redressed:

1. Non-payment or delay in payment of inward remittances or non-payment of the same

can also be raised with the banking ombudsman.

such drafts and cheques.

3. Inordinate delay in the payment, or non-payment, delay in collection of cheques,

drafts, bills etc.

4. Bank refuses to open your account without giving valid reasons.

loans, promised by the bank in writing or by a direct agent.

8. Customers can take cases up to the banking ombudsman in case of non-adherence

complainant is not satisfied with the reply by the bank.

Hundred Thousand) to the complainant for mental agony and harassment.

Ombudsman Scheme Maximum Compensation for NBFCs: Rs.10 Lakhs

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