Banking Ombudsman

Frequently Asked Questions (FAQs)

Q.1. What does the Banking Ombudsman Scheme (the Scheme) offers the Consumers?
The Banking Ombudsman Scheme, 2002 (which has been brought into force w.e.f 14th June 2002), offers the consumers recourse for resolution of;
§ Your complaints, by the Banking Ombudsman, against your bank, in respect of such services of the bank which are stipulated under the Scheme; and

§ Resolution of claim of the bank against you, by the Banking Ombudsman (as an arbitrator), provided that the value of the claim in such dispute does not exceed Rs.10 lakhs.

Q.2. What is the role of the Reserve Bank in relation to the scheme?

The Banking Ombudsman Scheme was formulated by the Reserve Bank of India to provide an expeditious redressal grievance mechanism to customers of banks covered under the Scheme. It provides for an institutional and legal framework for resolution of complaints relating to banking services and other matters as specified under the Scheme.

Q.3. What a complainant needs to do before filing complaint against a bank in respect of deficiency in banking service?

· 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. For this purpose, the complainant should make a written representation to the bank named in the complaint and then he should wait for receipt of reply from the bank.

· If the reply is not received from the bank within a period of 1 month, after the bank concerned received his representation, or the bank has rejected the complaint, or the complainant is not satisfied with the reply given to him by the bank, in such event the complainant should file his complaint before the Banking Ombudsman.

· The complaint should be made before expiry of period of 1 year after the cause of action has arisen as per aforesaid response of the bank.

· The complainant should ensure that the complaint is not in respect of the same subject matter, which was settled through the office of the Banking Ombudsman in any previous proceedings before a Banking Ombudsman.

· The complainant should ensure that 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 or a decree or award or a final order, has already been passed by any such competent court, tribunal, arbitrator or forum. And the last but not the least, the complaint should not frivolous or vexatious in nature.

Q.4. Is there any time limit for making an Award in arbitral proceedings?

There is a time limit of six months, from the date of the first hearing, for passing of an Award. The Banking Ombudsman, if need be, on his own initiative or at the instance of the parties may extend such time limit, if it is necessary so to do in the interest of justice.

Q.5. What are the conditions for filing review application by a bank?

· The bank should first intimate to the Banking Ombudsman within one month (from the date of receipt of the copy of the award) of its decision to file review petition.

· The bank may file review application before the review authority if the Award passed against it is :
§ Based on wrong appreciation of facts, law, banking practice, or general directions, if any, issued by the Reserve Bank; or

The implementation of the Award is likely to create a bad precedent for the bank or banking companies or banking system in general; and
The Chairman of the bank and in his absence the Managing Director or Chief Executive Officer or any other officer of equal rank, of the bank, as the case may be, has approved filing of the review application by the bank.

Q.6. Is there any time limit for filing a review application?

Yes. The review application has to be filed within one month (from the date of receipt of the copy of the Award) or within such further time as may be allowed by the Review Authority in the special circumstances of the case where bank justifies the reason for not being able to file application within the prescribed time.

Q.7. How does review authority deal with the review application?

· On receipt of review application, the review authority serves a copy thereof to the other party and calls upon for submission of a reply to a review application within a period of two weeks or such further time as the review authority may allow.

· The review authority may also call for the comments of the Banking Ombudsman if he feels that such comment is necessary in the exigencies of the case.

Q.8. What directions the review authority can pass & to whom such directions are to be addressed?

· If on consideration of a review application the Review Authority is satisfied that the Award requires review by the Banking Ombudsman, he remands the matter to the Banking Ombudsman for reviewing the Award in the light of his observation.

· If on consideration of review application the Review Authority is satisfied that there is no ground for the review of the Award, he issues appropriate direction to the bank for implementation of the Award, within six weeks (from the date of submission of the review application) or within such reasonable time as the review authority may consider necessary.
Q.9. Whether a complainant or a bank can file additional or new evidence before the review authority?

No. The Scheme does not permit submission of additional or new material in evidence from any party, before review authority.
Q.10. How an Award (which has become binding on a bank) is implemented?
· The Banking Ombudsman reports to the Reserve Bank the non-compliance by any bank of an Award (which has become binding on it).

· On receipt of such report from the Banking Ombudsman, the Review Authority passes necessary order.
Q.11. What happens if the complainant sends letter of acceptance of the Award in full and final settlement of his claim?

· On receipt of a letter of acceptance, from the complainant (of the Award in full and final settlement of his claim in the matter), the bank has two alternate options depending upon the fact as to whether or not the Award is acceptable to the bank.

· 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.

· If the Award is not acceptable to the bank, it has an option to file review application before the Review Authority under the Scheme.

Q.12. Whether any further recourse is available to the complainant, if he has rejected an Award passed by the Banking Ombudsman?

If the complainant has rejected the award passed by the Banking Ombudsman, no further recourse is available to him under the Scheme.

Q.13. What should be included in an Award passed by the Banking Ombudsman?

An Award passed by the Banking Ombudsman should state the direction/s, if any, to the bank (for specific performance of its obligations) in addition to the amount to be paid by the bank to the complainant (by way of compensation for the loss suffered by him) alongwith the summary of reasons.

Q.14. What happens if the complaint is not settled by agreement?

· If a complaint is not settled by an agreement within a period of one month (from the date of receipt of a complaint) or within such extended period, as the Banking Ombudsman may consider necessary, he proceeds further for passing an Award.

· Before passing an Award the Banking Ombudsman provides reasonable opportunity to the complainant and the bank, to present their case.

· 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.

Q.15. Who pays for operation of the scheme?

· The complainant is not required to pay any amount in relation to filing of a complaint or resolution thereof as per the Scheme before a Banking Ombudsman.

· The costs incurred in relation to operation of the Scheme, is equally shared by the banks.

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Core Centre

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Consumer Complaint in Consumer Forum in India

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Action against collection/recovery agents

If you are not a defaulter, and your bank, finance company, cell-phone operator is harassing you to extort money through recovery agents then follow these steps:

1) Note down the telephone number from where the call is originating.
2) Try to get the name of caller.
3) If he visits you personally, ask for his identity card of employment in the institution from which you have subscribed the services.
4) If he is not the employee of the institute, you have no liability to deal with him as you have no contract/agreement of service with him.
5) immediately complain in writing to the Senior Inspector of the police station in your locality informing the telephone number and the name of person.
6) Complain to the head of institution- like Chairman, Managing Director, CEO, etc. about the incident and their defective services.
7) Complain to the Banking Ombudsman, if it is a banking institution.
8) Complain to the Chairman, Reserve Bank of India, who is responsible for all the banks in India.
9) Enclose the copy of the police complaint when you complain to these officers.
10) Write to the media.

1) Recovery through agents is illegal.
2) Banks are not supposed to divulge your financial details and your address and telephone number to a third party.
3) Third party cannot represent your service provider for such crucial and sensitive information.

1) Do not give any money to recovery agents as you have no contract with them.
2) Give money to your service provider only against proper receipt.
3) If any recovery agent calls you to any place, don't go alone, take the police with you and get them arrested. Plain clothes policemen will accompany you if need arises. If there is any emergency, dial telephone number 100 and inform the police control room your location.
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