RBI includes complaints against electronic banking services under ombudsman scheme

• The Reserve Bank of India (RBI) has allowed consumers to lodge complaints against banks for non-adherence to norms related to electronic banking services, including those provided on mobile phones, under the banking ombudsman scheme, its cost-free dispute resolution mechanism.
• The central bank has also allowed customers to file complaints against banks for deficiencies arising out of sale of third party products such as insurance policies and mutual fund schemes sold by banks.
• The banking ombudsman has now been powered to pass an award of Rs20 lakh, as against the earlier threshold of Rs10 lakh.
• The ombudsman can also give a consumer up to Rs1 lakh as compensation for loss of time, expenses incurred and mental anguish suffered during fighting the case.

What is Banking Ombudsman?

• Banking Ombudsman Scheme is a mechanism created by the RBI to address the complaints raised by bank customers. It is run by the RBI directly to ensure customer protection in the banking industry.
• According to the RBI, “The Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks.”
• The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995. The present Ombudsman scheme was introduced in 2006.
• The Banking Ombudsman is a senior official appointed by the Reserve Bank of India. He has the responsibility to redress customer complaints against deficiency in certain banking services. At present fifteen Ombudsmen were appointed by the RBI to settle complaints and they are appointed in state capitals.
• All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
• The Banking Ombudsman can receive and consider any complaint relating to a number of deficiencies related to banking operations including internet banking. RBI has mentioned a large number of service deficiencies by banks to customers where the customers can approach the Ombudsman through a complaint.

Following are some of the instances:

• 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 in respect thereof;
• non-acceptance, without sufficient cause, of coins tendered and for charging of commission in respect thereof;
• 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 ;

By: Vishal