Banking Ombudsman (BO) is a senior official appointed by Reserve Bank of India to redress customer complaints against deficiency in certain banking services. Banking Ombudsman is appointed for a maximum tenure of three years at a time. Reappointment can be done.
Banking Ombudsman scheme was firstly introduced in 1995 by the RBI. It comes under the section 35A of Banking Regulation Act,1949. All the scheduled commercial banks, Regional Rural Banks and Scheduled primary cooperative banks are covered under the scheme. The loan part of Non-Banking Financial Companies (NBFCs) is also under the jurisdiction of BO. Currently, there are 21 Banking Ombudsman centres operating in the country.
Internal Ombudsman Scheme 2018
The Reserve Bank of India in May 2015 advised all the public sector banks, selected private and foreign banks to appoint Internal Ombudsman as Independent authority. Internal Ombudsman will look into the complaints which are partially or fully rejected by banks. Internal Ombudsman should not be a member of the bank and can be appointed for a period of 3 to 5 years (reappointment cannot be done).
Recently, RBI has made it mandatory to appoint Internal Ombudsman for banks having more than 10 branches (except Regional Rural Banks). Internal Ombudsman will report to the customer service committee of the concerned bank, not to the CEO of the bank.
Grounds of complaint to Banking Ombudsman
The RBI has listed around 25 areas where the customers can raise complaints with the Banking Ombudsman. Some of them are:
- Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.
- Non-payment or delay in payment of inward remittances.
- Failure or delay to issue drafts, pay orders or bankers’ cheques.
- Non-adherence to prescribed working hours.
- Refusal to open deposit accounts without any valid reason for refusal.
- Levying of charges without adequate prior notice to the customer.
- Refusal or delay in closing the account.
- Non-observance of Reserve Bank guidelines on the engagement of recovery agents by banks.
Who can approach the Banking Ombudsman?
If a customer wants to complain against the bank for some service deficiency, firstly he/she to approach the same bank and then he/she can approach the Banking Ombudsman in these cases:
- If the bank fails to provide a reply to the customer’s complaint within one month.
- If the bank rejects the complaint.
- If the customer is not satisfied with the reply of the bank.
Note: Click here to read about Insurance Ombudsman.
Then in this scenario, a customer can approach the Banking Ombudsman of the concerned branch either online or by writing the complaint on a simple paper. But complainant should approach the BO within one year of rejecting the complaint by concerned bank. No fees are charged to file a complaint or resolving it by BO.