A Study On Banking Ombudsman Scheme Commerce Essay

A Study On deposeing Ombudsman object Commerce EssayThe confideing Ombudsman system, 1995 was nonified by rbi on June 14, 1995 in equipment casualty of the powers conferred on the Bank by Section 35A of the Banking Regulation ferment, 1949 to forget for a arranging of chastenal of deformitys against swans. The plan sought to establish a agreement of expeditious and inexpensive small town of guest bearings. The Scheme is in doing since 1995 and was revised during the family 2002. The Scheme is being executed by Banking Ombudsmen prescribed by RBI at 15 centres covering the entire country.The banter Ombudsman in general means a grievance man, a frequent official who is appointed to investigate ailments against the administration. He is to intervene for theordinarycitizen in his traffic with the complex machinery of the establishment.ObjectiveThe objective behind this scheme is to make functional an expeditious and cost effective grievance redressal appliance to imprecate customers. imagination and Goals of the Banking Ombudsman OfficesVision StatementTo be a visible and credible system of dispute resolution mechanism for common somebodys utilizing the banking services.Goals To ensure redressal of grievances of applyrs of banking services in an inexpensive, expeditious, fair and sightly manner that will provide impetus to better customer services in the banking sector on a incessant basis. To provide valuable feedback suggestions to retain Bank of India towards framing appropriate and apropos guidelines to banks to improve the level of customer service and to strengthen their internal grievance redressal systems. To enhance the aw beness of the Banking Ombudsman Scheme. To facilitate quick and fair (non-discriminatory) redressal of grievances through use of IT systems, comprehensive and easily accessible database and enhanced capabilities of staff through training. background knowledge OF THE SCHEMEThe Banking Ombudsman Scheme, 20 02 covers every(prenominal) the Regional Rural Banks in addition to all Commercial Banks and Scheduled Primary Co-operative Banks, which were already covered by anterior Banking Ombudsman Scheme, 1995. The grounds of missions that contribute be constitute downtained by the Banking Ombudsmen have been enumerated in Clause 12 of the Banking Ombudsman Scheme 2002.What are directions Ombudsman may develop?The Banking Ombudsman can receive and suppose whatsoever complaint relating to the following deficiency in banking services (including internet banking)* non- retribution or inordinate sustain in the payment or collection of suss outs, drafts or bills* non- credence of small denomination n iodins* non-acceptance of coins tendered* non-payment or keep in payment of inward remittances* failure to issue or delay in issue of drafts* non-adherence to prescribed works hours* failure to provide or delay in providing a banking facility* complaints from Non-Resident Indians ha ving computes in India* refusal to open get accounts without both valid reason for refusal* levying of charges without adequate prior nonice to the customer* non-disbursement or delay in disbursement of tribute* refusal to accept or delay in accepting payment towards taxes* forced closure of define accounts without due nonice* refusal to close or delay in climax the accounts* non-adherence to the fair practices code as adopted by the bank* either other social occasion relating to the violation of the directivesWhen a person may commit the complaint? mavin can file a complaint out front the Banking Ombudsman if the reply is not received from the bank in spite of appearance a accomplishment of virtuoso month after the bank concerned has received unmatched s representation, or the bank rejects the complaint, or if the plaintiff is not agreeable with the reply given by the bank.Rules for filing complaintAny person may himself or through his authorized representative make a complaint to the bank. If the bank rejects the complaint or the plaintiff does not receive every reply indoors a month or the plaintiff is not satisfied with the reply even by the bank, the complainant may betterment the Banking Ombudsman for redress of the grievance subject to the following The complaint should be made within one year after the cause of execution has arisen. The complaint is not in respect of the akin subject publication that was settled through the Office of the Banking Ombudsman in any previous proceeding. The complaint does not pertain to the same subject matter for which any proceedings onwards any court, tribunal or arbitrator or any other assemblage is pending or a decree or award or a final order has already been passed. The complaint is not frivolous or vexatious in naturWhen will one s complaint not be considered by the Ombudsman ?a. One has not approached his bank for redressal of his grievance first.b. One has not made the complaint within on e 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.c. 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.d. Frivolous or vexatious.e. The psychiatric hospital complained against is not covered at a lower place the scheme.f. The subject matter of the complaint is not within the ambit of the Banking Ombudsman.g. If the complaint is for the same subject matter that was settled through the mail service of the Banking Ombudsman in any previous proceedings.How Where can one lodge his/her complaint?One can file a complaint with the Banking Ombudsman simply by writing on a plain makeup. One can also file it online or by sending an email to the Banking Ombudsman. One may lodge his/ her complaint at the office of the Banking Ombudsman under whose jurisdiction, the bank bra nch complained against is situated. For complaints relating to realization cards and other types of services with centralise operations, complaints may be filed before the Banking Ombudsman within whose territorial jurisdiction the explosive charge address of the customer is located.PERFORMANCE OF THE BANKING OMBUDSMENThe performance of the Banking Ombudsmen has been analysed on the aspects much(prenominal)(prenominal) as the quantum of complaints handled by them, the timeliness in handling the issues, and appropriateness of the decisions of the Banking Ombudsmen. More than 5000 complaints are received by the Banking Ombudsmen every year. The number of complaints received by the BO offices has been steady increasing since 1999-2000. The number of complaints received during 2000-01, 2001-02 and 2002-03 stood at 5803, 5907 and 5399 respectively while on that point was a sharp rise during the year 2003-04 at 8246. Details are as given belowNumber of complaints received by the Bank ing Ombudsmen conclusionNo. of Offices of Banking OmbudsmanNo. of complaints received during the yearAverage No. of complaints per office99-0015499433300-0115580338701-0215590739402-0315539936003-04158246550Role of arbiterAny dispute amongst a bank and its constituents or amid a bank and another bank may be referred to a Banking Ombudsman for arbitration, if both the parties agree for such a reference provided that the value of the conduct in such dispute does not exceed Rs.10 lacs.ReportingThe Banking Ombudsman shall account to the Reserve Bank, the non-compliance by any bank of an award and the Review situation shall pass the necessary order. If a bank fails to implement the award within the prescribed time limit, the complainant may approach the Review leave with a prayer to pass an appropriate direction to the bank for present(prenominal) compliance of the award. The Review Authority shall not receive any such additional or new material from any party which was not prod uced before the Banking Ombudsman. The Review Authority may call for the comments of the Banking Ombudsman in a review application filed before him, provided he is satisfied that such comments of the Banking Ombudsman are necessary in the exigencies of the issue.The object behind the Banking Ombudsman Scheme is to make operable an expeditious and cost effective grievance redressal mechanism to bank customers. whence Banking ombudsman will endeavor to promote a solving through conciliation or mediation and he will not be give by any legal rule of evidence.With effect from January 1, 2006, RBI has however modified the scheme. Now complaints relating to credit cards can also be preferred by aggrieved customers. Earlier, retired bank officers or retired bureaucrats were being appointed as ombudsmen. With effect from Jan.2006, RBI officers are appointed as ombudsmen.Centres And Their Operational Areas AhmedabadGujarat, articulation Territories of Dadra and Nagar Haveli, Daman and DiuBangaloreKarnatakaBhopalMadhya Pradesh and ChattisgarhBhubanes-warOrissaChandigarhHimachal Pradesh, Punjab and Union Territory of ChandigarhChennaiTamil Nadu, Union Territories of Pondicherry and Andaman and Nicobar IslandsGuwahatiAssam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and TripuraHyderabadAndhra PradeshJaipurRajasthanKanpurUttar Pradesh (excluding District of Ghaziabad) and UttaranchalKolkataWest Bengal and SikkimMumbaiMaharashtra and Goa stark naked DelhiDelhi, Haryana, Jammu and Kashmir and Ghaziabad district of Uttar PradeshPatnaBihar and JharkhandThiruvanan-thapuramKerala and Union Territory of LakshadweepSome Important Developments during the year 2008-09 impact of the Committee on Subordinate Legislation, Rajya Sabha on functioning of the Banking Ombudsman Scheme in the private sector banks and foreign banksDeputy Governor represented the Bank during the deliberations of the Committee on Subordinate Legislation on functioning of the Banking Ombudsm an Scheme in the private sector banks and foreign banks. The Committee was headed by Dr Najma Heptulla, MP and the banks called for discussion were HDFC, Citibank, Standard Chartered Bank, Deutsche Bank and HSBC Ltd.Advertisement under serial Jago Grahak JagoAn advertisement campaign on the Banking Ombudsman Scheme has been released by the Bank in collaboration with Ministry of Consumer Affairs, Food Public Distribution, Government of India as a knock campaign under the Jago Grahak Jago series. A massive advertising visual promotional material campaign on the Banking Ombudsman scheme had been carried out in both bell ringer and electronic media. This worldly concernity will help in elevating awareness to the highest degree the BO Scheme among the common people. In addition, banks were instructed to display details of the BO Scheme in all bank branches for the benefit of their customers.Up gradation of Complain trailing Software (CTS)The upgraded version of CTS package went l ive from July 1, 2009. The upgraded CTS package has provision to enter the complaints, acknowledge the complaints, edit the complaints to update it, upload/ down load musical accompaniment of citizens. The System is to record and receive the grievances online and redress them indicating action at distinct levels. The Government of India is monitoring the System. All the Public Sector banks, Offices of the Banking Ombudsman, RBI, SIDBI, IDBI Bank, NABARD etc., have been tilted by Government of India as subordinate offices and given username and password to access the DARPG gate to enable them to dispose of the grievances against banks online. The Government of India intends to discontinue with the disposal of grievances in paper form in a phased manner.Reform Banking OmbudsmanLatest Law citizens committee onCheque BounceJ. Venkatesan reports that the Law Commission of India has recommended setting up of fast subdue courts to dispose over 3.8 million eccentric persons pending c heque bounds cases and has suggested that an amendment to the Instruments Act to compel the drawer of a cheque to pay 50 per cent of the join of the receipt of summons. The head of Commission, Justice A. R. Lakshmanan has noted that because of the huge pendency of the cases the credibleness of the business within and outside the country suffered a serious setback. dishonour of a cheque by a bank causes incalculable liberation, injury and inconvenience to the payee, and the credibility of issuance of cheque is also being scoured to a large extentBanking Ombudsmanon cheque BounceThe practical beat at Banking Ombudsman reveal that officials of Banking Ombudsman of RBI have soft corner for the largest prevalent sector bank of India- State Bank of India. Despite the fact that they find the bank had erroneously feeded the cheque Banking Ombudsman noted that by refund of veridical expenses in pursing complaint (Rs. 2000) and apology, complaint has been reasonably addressed and no only compensation for any button or damage on account of the deficiency in Banks service could be allowed. This is in contrast to its decision, a year ago, against Corporation Bank which too had wrongly bounced cheque of the same senior(a) citizen ..It is therefore advised that the complainant may be remunerative with Rs, 1500/- towards harassment caused. Why so soft on SBI? Further Banking Ombudsman did not issue any directions to SBI nor to Corporation Bank, on account of serious deficiency of service. Coming back, SBI did not render any sincere apology to the senior citizen. What to talk of promising efficient customer service or responding to interrogation under RTI, sent through post office.More on the working of Banking Ombudsman. The Banking Ombudsman passed an Award against the erring SBI, the passbook of complaint also mentioned-As per orders passes by banking Ombudsman... However, the official letter from Banking Ombudsman maintained that that complaint was resolv ed amicably between the bank and the complainant. No award was passed, how to contest? When it was asked under RTI Act that- were terms of settlement gestural by both complainant and the bank before the Banking Ombudsman as a mark of settlement/agreement? Please list the number of complainants disposed by settlement where terms of settlement was signed by the bank and complainant in 2007-08? The response of RBI-No such practice is envisaged under the provisions of the Banking Ombudsman Scheme, 2006. Not surprising, on record, ,majority of complainants Banking Ombudsman are amicably resolved. What option does the common man have when the normal grievance redressal mechanism fails? To sit at home and accept the helplessness or to approach the Courts, aleady overflowing with cheque bounce cases?In the light of public hobby Justice A. R. Lakshmanans observation, SARCAJC draws to Reserve Bank of India to Amend the present Banking Ombudsman Scheme so that compensation can be awarded to common man (taking account the loss of the complainants time and harassment and mental anguish), whose cheque is wrongly bounced by any Bank. Further, apart from officials of Reserve Bank of India, two active representatives of general public should be included in Banking Ombudsman structure so that Banking Ombudsman Scheme effectively works in the public interest and eases the pressure of cheque bounce cases in the Indian courts.Review Of LiteratureAwareness Fridays A snuff it to the Indian Banking Ombudsman Scheme Vinaya HS on January 2, 2009The Reserve Bank of India also governs the Banking Ombudsman Scheme which provides an expeditious and inexpensive forum to bank customers for resolution of their complaints relating to banking services. The objective of the Banking Ombudsman Scheme is to be a visible and reliable system of dispute resolution mechanism for bank customers. Though the Ombudsman was launched way back in 1995, how galore(postnominal) among us are really aware of when and how to approach the Banking Ombudsman? Thankfully, as always, the Reserve Bank of India has recently released a guide on this very topic. RBI amends Banking Ombudsman SchemeMumbai, May 24 The Reserve Bank of India (RBI) brought some crucial amendments to the Banking Ombudsman Scheme, 2006 which will now enable aggrieved customers to not only appeal against any Ombudsmans decision but also to appeal in case of complaints being rejected. The appeal could be made to the deputy governors office of the RBI. The Ombudsman, however, has the compensate to reject complaints if they are not on the grounds of complaint referred to in clause 8 beyond the pecuniary jurisdiction of Banking Ombudsman prescribed frivolous, vexatious, malafide 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 or requiring consideration of lucubrat e documentary and oral evidence and the proceedings before the Banking Ombudsman. In case of a complainant being aggrieved by the award under clause 12 or by rejection of a complaint, he may purpose the option of an appeal within 30 days, the RBI said in its notification.TitleTHE BANKING OMBUDSMAN SCHEMEJournal of Financial Regulation and Compliance category1994AbstractThis paper examines the role of the Banking Ombudsman in dealing with complaints about banking services. It describes the procedures for study eligible complaints and considers the overlap with other Ombudsman schemes, in particular those of the Building Societies and damages Ombudsmen.Exemplary Cases dealt with by BO offices where customers were rightCase 1 The complainant was maintaining a current account and approached the bank to convert his current account to silver credit account. For the said purpose he had pledged NSC amounting to Rs.1,20,000/-. Subsequently the bank neither sanctioned him a cash credit l imitnor returned the certificates. In the meantime the certificates were matured for payment and he requested the bank to return the certificates. The bank failed to return the certificates stating that the certificates had been misplaced. The complainant approached us with a request to redress his grievances. On taking up the matter with the bank, the bank assured to take up the matter withthe post office for issue of duplicate NSCs. On receipt of the duplicate NSCs from the concerned post office, the complainant was compensated for the loss of the original certificates. The complainant submitted a letter of satisfaction to the BO.Case 2 A complaint relating to non-credit of cheque amount into the account of the complainant was received. The complainant had describely taken up the matter with the bank several clock but there was no response by the bank towards credit of the cheque amount.The complainant approached the BO for resolution of his grievances. On receipt of the compla int, BO questioned the bank as to what action had been taken on the complaint bythem. The bank reported that the cheque in question was lost in transit resulting in non-credit of the cheque amount to the complainants account. At the instance of BO, the bank took up the matter with UTI Mutual origin, Patna by submitting letter of undertaking and death certificate.The Mutual Fund issued a duplicate cheque and the amount was credited to the complainants account. The complainant submitted a letter of satisfaction.Case 3 BO received a complaint where the complainant alleged that on her husbands death, she approached the concerned bank on November 27, 2008 for payment of family pension and all the formalities were completed as required by the bank. The treasury Officer had converted the pension into family pension and advised the bank on October 18, 2008 to make payment to the widow. Though she had been approaching the bank there was no response from the bank. BO questioned the bank as to what action had been taken by them on the complaint. On persuasion, the bank redressed the grievances and paid the family pension to the complainant .Case 4 A cheque drawn by the EPF Department on the first principle Banks Nasik branch for Rs.21.36 lakh was sent to XYZ Bank, New Delhi for credit to the account of the complainant.The amount was not credited to the complainants account advising that it had not received the cheque. The complainant, however, obtained the Proof of delivery from Post Office in support of the claim that it was delivered to the XYZ bank.. It transpired that the XYZ bank had genuinely misplaced the cheque before sending it for collection to ABC Bank and it had already furnished an affidavit to the EPF Department reporting the misplacement of the cheque and requesting for a duplicate cheque. With the intervention of BO, the bank credited an amount of Rs.18,894/- as interest on the delayed payment since date of deposit of the cheque.RECOMMENDATIONS 1. I f a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as he may consider necessary, the Banking Ombudsman may make a recommendation by reference to what is, in his opinion, fair in all the circumstances. Copies of the recommendation shall be sent to the complainant and the bank concerned.2. The recommendation by the Banking Ombudsman shall be open to acceptance by the complainant only if he accepts all terms of the recommendation in full and final settlement of his claim against the bank and he shall, if he accepts the recommendation, within two weeks from the date of receipt of the recommendation send his acceptance in writing stating clearly that he is prepared to accept a settlement in terms of the recommendation is full and final settlement of his complaint.3. The Banking Ombudsman shall cause a copy of the letter of acceptance, received from the complainant to be forwarded to the bank. The bank sh all, if the recommendation is acceptable to it, comply with the terms of the recommendation at once on receipt of acceptance of the terms by the complainant and tell the Banking Ombudsman of the settlement in terms of his recommendation. If the recommendation is not acceptable to the bank, it shall assert the Banking Ombudsman within a period of two weeks.sReferences http//en.wikipedia.org/wiki/Ombudsmanhttp//www.rbi.org.in/SCRIPTs/bs_viewcontent.aspx?Id=164http//www.rbi.org.in/scripts/FAQView.aspx?Id=24http//www.consumercourt.netfirms.com/consumercourtbankingombudsman.htmhttp//www.apnaloan.com/credit-card-india/Banking-ombudsman-area.htmlhttp//www.icrpc.org/icrpc.org.bankingombudsman.htm