Banking Ombudsman: Redressal For Customer Complaints Against Banks

Last Updated: 12 Aug 2024

Most of us have experiences of bank executives, who have not provided us good services at some point of time. We face issues like activating our dormant account, issue of cheque book, adding nominee name, refunding overdraft charges, delay in remittance from abroad, closing bank account, etc. At times, we do not get a proper resolution from the bank. In such case need to know to whom can we file a complaint to resolve our issue.

Banks are like any other business and therefore you can file a complaint against them—if you are not satisfied with their services. Filing a complaint also helps you, to make sure that next time you won’t have any bad experience with them. However, for a filing a complaint against a bank you first need to know the right process.

The main object of the complaint is to get resolved your problem as earliest. So it is most important to make complaint to appropriate person who will resolve your problem effectively. There is a system in Indian banking to get your problem resolved by contacting authorities in procedure. First approach to concerned bank, then Director of Public Grievances, Govt of India, then Ombudsman (RBI) and finally consumer forum. If you will follow the procedure you will find result sure.

Presently RBI (Reserve Bank of India) has compelled banks to hear customer on priority basis. On direction of RBI every bank has to appoint nodal office for redressal of customer grievances. Every bank has designated higher level office at head offices and other senior level officer at controlling offices and at large branches.

Steps of complaints

• Write or e-mail to concerned bank branch, office or department
• Write or e-mail to nodal officer at controlling office and head office of the bank
• Write or e-mail to Director of Public Grievances, Govt of India, Cabinet Secretariat, Sansad Marg, New Delhi-110001
• Complaint in appropriate form (along with copies of earlier correspondence with concerned bank) to Banking Ombudsman (Located at state capitals under RBI Ombudsman Scheme)
• District Consumer Forum (under Consumer Protection Act, 1985) complain in appropriate form.
• In this article we will learn more about banking ombudsman, their role, appointment & tenure, grounds of complaints among others.
• Banking ombudsman is a quasi-judicial authority created by Government of India to provide effective complaints resolutions. It is a senior official appointed by RBI to address the complaints by the banking customers. Some people also call it ombudsman banking.

Origin: Banking Ombudsman Scheme 2006

The RBI first introduced the Banking Ombudsman Scheme in 1995 and it was revised in 2002 to over regional and rural banks. Then again there was a revision in the year 2006 which is known as “Banking Ombudsman Scheme 2006to cover complaints for ATM transactions, debit and credit cards, deduction of service charges etc. It was last amended in February 2009, to cover problems due to internet banking. This RBI Banking Ombudsman scheme covers all banks- PSU Banks, Rural and Co-operative Banks. The Ombudsman Banking has been defined under clause 4 of the Banking Ombudsman Scheme, 2006.

The RBI shall specify the territorial limits to which the authority of each of the Banking Ombudsman shall extend.

Appointment & tenure

The RBI on recommendation by its Governor may appoint one or more officials for this post. The minimum age to be considered shall be 55 years. The person selected will be appointed for a period of 3 years which could be further extended for a period not exceeding 2 years and subject to age limit of 65 years.

Clause 12 Grounds of Complaints

1. Complaints Pertaining to Deficiency in any of the Banking Services such as
   • Non-payment or delay in payment of cheques, drafts, bills, etc
   • Non acceptance of small denomination notes without any reason and also charging of commission in respect thereof
   • Non issuance of drafts to customers
   • Non adherence to prescribed working hours by the branches
   • Failure to honour guarantee or letter of credit
   • Claims in regards to fraudulent withdrawals or fraudulent encashment of cheque or a bank draft
   • Complaints for any of the accounts pertaining to delays , non credit of proceeds to parties accounts
   • Complaints for non observance of RBI’s directives applicable to rate of interests on deposits or violation of directives on any other matter
   • Complaints from exporters for delays in receipt of export proceeds, handling of export bills, collections of bills
   • Complaints from NRI’s in regards to remittance from abroad
   • Complaints pertaining to refusal to open deposit accounts without any valid reason
2. Complaints Concerning loans and dvances
   • Non observance of RBI directives on interest rates
   • Delays in sanction or disbursement of loan applications
   • Non acceptance of loan application without any valid reason
   • Non observance of any other directives by RBI.

Procedure for lodging complaint

Any person who has a grievance against a services as mentioned above in Clause 12 of the scheme can approach Banking Ombudsman for addressing his concern. The person can make a complaint to Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located.

The complaint filed should be in writing duly signed by the complainant. It should clearly state the name and address of complainant along with name and address of branch of bank against which complaint is being made. It should also give facts causing complaint supported by documents along with description of nature and extent of loss.

Rejection of complaints

• If the complainant has’t first approached the bank named in the complaint and the complaint would be accepted only if the other bank has

  1. Rejected the complaint or
  2. No reply received within 1 month after the concerned bank received the case or
  3. Person is not satisfied with the reply give
• If the complaint has been made to Ombudsman later than one year after the cause of action
• If the complaint is in regards to the same subject matter which was settled though Banking Ombudsman in any previous proceedings
•  If the complaint for same subject matter is pending before any court, tribunal or arbitrator or a final order has already been passed by such an authority
•  If the complaint is frivolous, vexatious or malafide in nature
•  If there is no loss or damage caused to complainant
• If it is pursued without sufficient cause and reasonable diligence
• If the complaint is outside the purview of the scheme
• If the bank branches fall outside the jurisdiction of Ombudsman as several states are clubbed together since it`s not available in all states.

RBI Banking Ombudsman Offices in India are located at Mumbai Delhi, Bangalore, Hyderabad and 11 other locations. Banking Ombudsman email can be obtained from RBI website for respective locations in Delhi, Mumbai and others.