Banking Awareness 2017 – Banking Ombudsman Scheme 2006 | 10 Important Features Explained



Hello and welcome to exampundit. Today we will elaborate each and every important things about Banking Ombudsman Scheme 2006.

The Banking Ombudsman Scheme,
2006 enables resolution of complaints of bank customers relating to certain
services rendered by banks. The Scheme has come into force from January 1,
2006.
In official words,
The Banking Ombudsman 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 is introduced under
Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.


The Banking Ombudsman is a senior
official appointed by the Reserve Bank of India to redress customer complaints
against deficiency in certain banking services.
Important Features of Banking Ombudsman Scheme 2006:
  1. The Banking Ombudsman is person
    appointed by the Reserve Bank of India
    to redress customer complaints against
    certain deficiency in banking services.
  2. The Banking Ombudsman is a quasi-judicial
    authority. It
    has power to summon both the parties – bank and its customer
    , to
    facilitate resolution of complaint through mediation.
  3. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled
    Primary Co-operative Banks are covered under the Scheme
    .
  4. Banking Ombudsman will consider complaints from Non-Resident
    Indians having accounts in India in relation to their remittances from
    abroad, deposits and other bank-related matters
    .
  5. A customer can file his complaint
    before the Banking Ombudsman if the reply is not received from the bank within a
    period of one month
    , after the bank concerned has received his
    representation, or the bank rejects the complaint, or the complainant is not
    satisfied with the reply given to him by the bank.
  6. The limit of compensation is Rs 10 lakh.
  7. The Banking Ombudsman may award compensation not
    exceeding Rs 1 lakh to the complainant only in the case of complaints
    relating to credit card operations for mental agony
    and harassment
    .
  8. If a complaint is not settled by an agreement within a period of one month, the Banking Ombudsman proceeds
    further to pass an award.
  9. If one is not satisfied with the decision passed by the Banking
    Ombudsman
    , one can approach the appellate authority against the Banking
    Ombudsmen’s decision. Appellate Authority is vested with a Deputy Governor of
    the RBI
    .
  10. If one is aggrieved by the
    decision, one may, within 30 days of the
    date of receipt of the award, appeal against the award before the appellate
    authority
    .

The Banking
Ombudsman can receive and consider any complaint relating to the following
deficiency in banking services (including internet banking):
  • 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 ;
  • failure to provide or delay in providing a banking facility
    (other than loans and advances) promised in writing by a bank or its direct
    selling agents;
  • delays, non-credit of proceeds to parties accounts,
    non-payment of deposit or non-observance of the Reserve Bank directives, if
    any, applicable to rate of interest on deposits in any savings,current or other
    account maintained with a bank ;
  • complaints from Non-Resident Indians having accounts in
    India in relation to their remittances from abroad, deposits and other
    bank-related matters;
  • refusal to open deposit accounts without any valid reason
    for refusal;
  • levying of charges without adequate prior notice to the
    customer;
  • non-adherence by the bank or its subsidiaries to the
    instructions of Reserve Bank on ATM/Debit card operations or credit card
    operations;
  • non-disbursement or delay in disbursement of pension (to the
    extent the grievance can be attributed to the action on the part of the bank
    concerned, but not with regard to its employees);
  • refusal to accept or delay in accepting payment towards
    taxes, as required by Reserve Bank/Government;
  • refusal to issue or delay in issuing, or failure to service
    or delay in servicing or redemption of Government securities;
  • forced closure of deposit accounts without due notice or
    without sufficient reason
    ;
  • refusal to close or delay in closing the accounts;

A customer can
also lodge a complaint on the following grounds of deficiency in service with
respect to loans and advances
  • non-observance of Reserve Bank Directives on interest rates;
  • delays in sanction, disbursement or non-observance of
    prescribed time schedule for disposal of loan applications;
  • non-acceptance of application for loans without furnishing
    valid reasons to the applicant;

The Banking
Ombudsman may reject a complaint at any stage if it appears to him that a
complaint made to him is:
  • compensation sought from the Banking Ombudsman is
    beyond  Rs 10 lakh .
  • requires consideration of elaborate documentary and oral
    evidence and the proceedings before the Banking Ombudsman are not appropriate
    for adjudication of such complaint
  • without any sufficient cause
  • that it is not pursued by the complainant with reasonable
    diligence
  • in the opinion of the Banking Ombudsman there is no loss or
    damage or inconvenience caused to the complainant.

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Team ExamPundit