RBI establishes Working Group to review Banking Ombudsman Scheme

Taking into consideration the suggestions by Committee on Customer Service in Banks (Damodaran Committee) relating to Banking Ombudsman Scheme 2006 and the Rajya Sabha Committee on Subordinate Legislation, Reserve Bank of India (RBI) has constituted a Working Group which will be headed by Suma Verma with an aim to review, update, and revise the Banking Ombudsman Scheme, 2006.

The background of Banking Ombudsman Scheme. What sort of complaints doest this scheme handles?

  • As per the Annual Report of the Banking Ombudsman Scheme, 2011-12 released by the RBI:
  • Total number of customer complaints received in Banking Ombudsman’s (BO) offices of the RBI was 72,889 in 2011-12.
  • Highest number of complaints was received by Kanpur and New Delhi in 2011-12, followed by Chennai and Bhopal.
  • Rate of disposal of customer complaints by Banking Ombudsmen was 94 % during 2011-12, the same as that done during the previous year.
  • Largest number (25%) of customer complaints were about failure to meet commitments/non-observance of fair practices code
  • 21% were card related (ATM/Debit/Credit) complaints
  • 12% complaints were relating to deposit accounts

The background of Banking Ombudsman Scheme

The RBI notified the Banking Ombudsman Scheme, 1995 on June 14, 1995 in terms of the powers conferred on the Bank by Section 35A of the Banking Regulation Act, 1949 (10 of 1949) to provide for a system of redressal of grievances against banks. The scheme has gone through four revisions in 2002, 2006, 2007 and 2009 to make it more relevant and effective. Currently, there are 15 Banking Ombudsmen with specific jurisdiction covering the 29 States and seven Union Territories in India. Since January 2006, the BOS is fully financed and administered by the RBI and its serving officers in the rank of Chief General Managers and General Managers are posted as Banking Ombudsmen.

What sort of complaints doest this scheme handles?

It looks into a wide range of complaints pertaining to deficiency in banking service rendered by Scheduled Commercial banks, Scheduled Primary Urban Co-operative banks and the Regional Rural banks. The key areas of customer complaints covered under the scheme include credit card complaints, internet banking, deficiencies in providing the promised services by both bank and its sales agents (DSAs), levying service charges without prior notice to the customers, non-adherence to the Fair Practices Code adopted by individual banks, non-adherence to Banking Codes and Standards Board of India’s Code of Bank’s Commitment to Customers, etc. Currently, there are 27 grounds on which customers can approach the Banking Ombudsman mentioning deficiency in banking services.



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