Banking Ombudsman Scheme 2006 – Amendment 2017

Hello and welcome to exampundit. On June 23, 2017, the Reserve Bank of India informed the amendments in the Banking Ombudsman Scheme 2006.

So, we decided to update the who Banking Ombudsman Scheme for you guys as this will be an important topic in the upcoming IBPS & SBI Exams.

Banking Ombudsman is a quasi-judicial authority functioning under the Banking Ombudsman Scheme, 2006.

The authority was created to enable resolution of complaints of customers of banks relating to services rendered by the lenders.

The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

Amendments as on 1 July, 2017

Reserve Bank of India has widened the scope of its banking ombudsman platform for addressing mis-sell of third party products, and customer grievances on and mobile banking and electronic banking issues, recognising customers’ plight in dealing with such troubles.

Under the amended scheme, a customer would also be able to lodge a complaint against the bank for its non-adherence to RBI instructions with regard to mobile banking/ electronic banking services in India.

The RBI had widened the scope of its Banking Ombudsman Scheme, 2006, to include, inter alia, deficiencies arising out of sale of insurance, mutual fund, and other third-party investment products by banks.

The new rule will be effective from July 1, and the banking ombudsmen will enjoy more power in their pecuniary jurisdiction.

The pecuniary jurisdiction of the banking ombudsman to pass an award has been increased from existing Rs 10 lakh to Rs 20 lakh. Ombudsman can direct banks to pay compensation up to Rs 1 lakh to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered.

Key Features of Banking Ombudsman Scheme

1. The complainant can be filed by one’s authorized representative (other than an advocate).
2. The Banking Ombudsman does not charge any fee for filing and resolving customers’ complaints.
3. The pecuniary jurisdiction of the banking ombudsman to pass an award has been increased from existing Rs 10 lakh to Rs 20 lakhs.
4. Ombudsman can direct banks to pay compensation up to Rs 1 lakh to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered.
5. The Banking Ombudsman may reject a complaint at any stage if icompensation sought from the Banking Ombudsman is beyond  Rs 20 lakh .
6. 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.
7. 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.

Ones complaint will not be considered if:

• One has not approached his bank for redressal of his grievance first.
• One has not made the complaint within one year from the date one has received the reply of the bank or if no reply is received if it is more than one year and one month from the date of representation to the bank.
• The subject matter of the complaint is pending for disposal / has already been dealt with at any other forum like court of law, consumer court etc.
• The institution complained against is not covered under the scheme.
• The subject matter of the complaint is not within the ambit of the Banking Ombudsman.

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Regards

Team EP