The Scheme has come into force from January
3. Who is a Banking Ombudsman?
The Banking Ombudsman is person appointed by
the Reserve Bank of India to redress customer complaints against certain deficiency
in banking services.
4. Does the Banking Ombudsman have any legal
The Banking Ombudsman is a quasi judicial authority.
It has power to summon both the parties - bank and its customer, to facilitate
resolution of complaint through mediation.
5. How many Banking Ombudsmen have been appointed
and where are they located?
As on date, 15 Banking Ombudsmen have been appointed
with their offices located mostly in the State Capitals. The addresses of the
Banking Ombudsman offices have been provided in the RBI website.
6. Which banks are covered under the Banking
Ombudsman Scheme, 2006?
All Scheduled Commercial Banks, Regional Rural
Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
7. How is the new Banking Ombudsman Scheme,
2006 different from the Old Banking Ombudsman Scheme, 2002?
The extent and scope of the new Scheme is wider
than the earlier Scheme of 2002. The new Scheme also provides for online submission
of complaints. The new Scheme additionally provides for the institution of an
'appellate authority' for providing scope for appeal against an award passed
by the Ombudsman both by the bank as well as the complainant.
B. TYPES OF COMPLAINTS BEFORE BANKING OMBUDSMAN
8. What sort of disputes can the Banking Ombudsman
The Banking Ombudsman can receive and consider
any complaint relating to the following deficiency in banking services:
- non-payment or inordinate delay in the payment or collection
of cheques, drafts, bills, etc.;
- non-acceptance, without sufficient cause, of small denomination
notes tendered for any purpose, and for charging of commission for this service;
- non-acceptance, without sufficient cause, of coins tendered
and for charging of commission for this service;
- non-payment or delay in payment of inward remittances ;
- failure to issue or delay 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 loans and advances) promised in writing by a bank or its direct
- delays, non-credit of proceeds to parties' accounts, non-payment
of deposit or non-observance of the Reserve Bank directives, if any, applicable
to rate of interest on deposits in any savings, current or other account maintained
with a bank ;
- delays in receipt of export proceeds, handling of export
bills, collection of bills etc., for exporters provided the said complaints
pertain to the bank's operations in India;
- refusal to open deposit accounts without any valid reason
- levying of charges without adequate prior notice to the customer;
- non-adherence by the bank or its subsidiaries to the instructions
of Reserve Bank on ATM/debit card operations or credit card operations;
- non-disbursement or delay in disbursement of pension to the
extent the grievance can be attributed to the action on the part of the bank
concerned, (but not with regard to its employees);
- refusal to accept or delay in accepting payment towards taxes,
as required by Reserve Bank/Government;
- refusal to issue or delay in issuing, or failure to service
or delay in servicing or redemption of Government securities;
- forced closure of deposit accounts without due notice or
without sufficient reason;
- refusal to close or delay in closing the accounts;
- non-adherence to the fair practices code as adopted by the
- any other matter relating to the violation of the directives
issued by the Reserve Bank in relation to banking or other services.
- deficiency in Internet banking services
- non-adherence to the provisions of Fair Practices Code for lenders as adopted by the banks or Code of Banks Commitment to Customers
- non-observance of Regulatory guidelines on engagement of recovery agents by the banks
9. Will the Banking Ombudsman consider complaints
of Non-Resident Indians?
Yes, the Banking Ombudsman will consider complaints
from Non-Resident Indians having accounts in India in relation to their remittances
from abroad, deposits and other bank-related matters.
C. APPLYING TO BANKING OMBUDSMAN
10. When can the complainant file his complaint?
He can file his complaint before the Banking
Ombudsman if the reply is not received from the bank within a period of one
month, after the bank concerned has received his representation, or the bank
rejects the complaint, or the complainant is not satisfied with the reply given
to him by the bank.
11. Does the complainant have to fulfill any
conditions before complaining to the Banking Ombudsman?
For filing a complaint before the Banking Ombudsman,
it is essential for a complainant to first attempt to find a satisfactory solution
directly with his bank by making a written representation to the bank named
in the complaint. The complaint should, however, be made before expiry of period
of one year after the cause of action has arisen.
12. Can a complaint be made before a Banking
Ombudsman on the same subject matter settled through pervious proceedings before
any of the Banking Ombudsmen?
No. The complaint should not be for the same
subject matter that was settled through the office of the Banking Ombudsman
in any previous proceedings.
13. Can a complaint be made before a Banking
Ombudsman on the same subject matter for which any proceedings before any court,
tribunal or arbitrator or any other forum is pending or a decree or award or
a final order, has already been passed by any such competent court, tribunal,
arbitrator or forum?
14. Is there any procedure for filing the complaint
before the Banking Ombudsman?
The complaint should have the name and address
of the complainant, the name and address of the branch or office of the bank
against which the complaint is made, facts giving rise to the complaint supported
by documents, if any, the nature and extent of the loss caused to the complainant,
the relief sought from the Banking Ombudsman and a declaration about the compliance
of conditions which are required to be complied with by the complainant.
D. PROCEEDINGS BEFORE THE BANKING OMBUDSMAN
18. What happens when a complaint is received
by the Banking Ombudsman?
The Banking Ombudsman endeavours to promote,
through conciliation or mediation, a settlement of the complaint by agreement
between the complaint and the bank named in the complaint.
19. What happens if the bank makes an offer
If the terms of settlement (offered by the bank)
are acceptable to the complainant in full and final settlement of his complaint,
the Banking Ombudsman will pass an order as per the terms of settlement which
becomes binding on the bank and the complainant.
20. What happens if the complaint is not settled
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.
21. What will the Banking Ombudsman consider
for passing an award?
For passing an award, the Banking Ombudsman
is guided by the documentary evidence placed before him by the parties, the
principles of banking law and practice, directions, instructions and guidelines
issued by the Reserve Bank of India and such other factors, which in his opinion
are necessary in the interest of justice.
E. AWARD GIVEN BY BANKING OMBUDSMAN
22. What happens when the Banking Ombudsman
passes an award?
After an award is passed, its copy is sent to
the complainant and the bank named in the complaint. It is open to the complainant
to accept the award in full and final settlement of his complaint or to reject
23. What is to be done by the complainant if
the award is acceptable to him?
If the award is acceptable to the complainant,
he is required to send to the bank concerned, a letter of acceptance of the
award in full and final settlement of his complaint, within a period of 15 days
from the date of receipt of the copy of the award by him.
24. Can a complainant seek extension of time
for sending his letter of acceptance of the award?
Yes, a complainant can make a written request
to the Banking Ombudsman, for extension of time with the reasons for seeking
25. What does Banking Ombudsman do on receipt
of request from a complainant for seeking extension of time for sending his
letter of acceptance of the award?
If the Banking Ombudsman is satisfied with the
reasons stated by the complainant in his letter of request for extension of
time (for sending his letter of acceptance of the award), he may grant extension
of time up to further period of 15 days for such compliance.
26. What happens if the complainant sends a
letter of acceptance of the award in full and final settlement of his claim?
If the bank is satisfied with the award, within
a period of one month (from the date of receipt of letter of acceptance from
the complainant of the award in full and final settlement of his claim in the
matter), the bank is required to comply with the award and intimate the compliance
to the Banking Ombudsman.
27. Is there any further recourse available
to the complainant, if he rejects the Banking Ombudsman’s award?
If the complainant is not satisfied with the
award passed by the Banking Ombudsman, he can approach the appellate authority
against the Banking Ombudsmen’s decision.
28. Does the rejection of an award by the complainant
also bar any recourse and remedy available to him in respect of his grievances,
before court, forum or any other authority as per law in force?
The rejection of an award by the complainant
does not affect any other recourse and/or remedies available to him as per the
29. What if the Award is not acceptable to the
The bank has the option to file an appeal before
the appellate authority under the scheme.
F. APPEAL AGAINST THE AWARD
30. Who is the appellate authority?
The appellate authority is the Deputy Governor
in the Reserve Bank of India.
31. Is there any time limit for filing an appeal?
Either party aggrieved by the award may, within
45 days of the date of receipt of the award, appeal against the award before
the appellate authority. The appellate authority may, if he is satisfied that
the applicant had sufficient cause for not making an application for appeal
within time, also allow a further period not exceeding 30 days.
The banks can appeal only with the prior sanction
of their Chairman or, in his absence, the Managing Director or the Executive
Director or the Chief Executive Officer or any other officer of equal rank.
32. How does the appellate authority deal with
The appellate authority may
i. dismiss the appeal; or
ii. allow the appeal and set aside the award;
iii. send the matter to the Banking Ombudsman
for fresh disposal in accordance with such directions as the appellate authority
may consider necessary or proper; or
iv. modify the award and pass such directions
as may be necessary to give effect to the modified award; or
v. pass any other order as it may deem fit.
33. Is it open to the Banking Ombudsman to reject
a complaint at any stage?
Yes. The Banking Ombudsman may reject a complaint
at any stage if it appears to him that a complaint made to him is:
i. frivolous, vexatious, malafide or without
any sufficient cause or
ii. that it is not pursued by the complainant
with reasonable diligence or
iii. in the opinion of Banking Ombudsman there
is no loss or damage or inconvenience caused to the complainant or
iv. beyond the pecuniary jurisdiction of Banking
v. in the opinion of the Banking Ombudsman
the complicated nature of the complaint requires consideration of elaborate
documentary and oral evidence and the proceedings before him are not appropriate
for adjudication of such complaint.
34. By which scheme the pending complaints filed
(before coming into operation of the New Scheme of 2006) would be governed?
The adjudication of pending complaints and execution
of the awards (already passed before coming into operation of the Banking Ombudsman
Scheme 2006), will continue to be governed by the provisions of the earlier
Banking Ombudsman Schemes, 1995 and 2002.
35. What is the role of the Reserve Bank in
relation to the scheme?
The Banking Ombudsman Scheme has been formulated
by the Reserve Bank of India to provide an expeditious grievance redressal mechanism
to customers of banks. It provides for an institutional and legal framework
for resolution of complaints relating to banking services and other matters
as specified under the Scheme. The Scheme has been brought into force by way
of direction issued by the Reserve Bank in terms of Section 35A of the Banking
Regulation Act, 1949. The Reserve Bank will also appoint its serving senior
officials as the Banking Ombudsman and will also fully fund it for better effectiveness.
36. When was the Banking Ombudsman Scheme introduced?