Banking Ombudsman Scheme

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The Banking Ombudsman is a quasi-judicial authority established in 2006 by the Government of India to resolve complaints from bank customers regarding certain services provided by banks. The Banking Ombudsman Scheme was initially introduced in 1995, revised in 2002, and the current scheme has been operative since January 1, 2006. This replaced the Banking Ombudsman Scheme of 2002. The most recent amendment to the scheme was made up to July 1, 2017.

Offices and Complaints

  • Number of Offices: There are 22 regional offices of Banking Ombudsmen in India, with the latest offices opened in Jammu, Raipur, Mumbai-II, and New Delhi-III.
  • Complaints Handled: From 2002 to 2006, approximately 36,000 complaints were dealt with by the Banking Ombudsman.

Scope of Complaints

The Banking Ombudsman is empowered to handle a comprehensive range of complaints, including but not limited to:

Payment Issues:

    • Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills, etc.
    • Non-payment or delay in payment of inward remittances.

    Denomination and Coin Issues:

      • Non-acceptance of small denomination notes or coins without sufficient cause.
      • Charging a commission for accepting small denomination notes or coins.

      Issuance Issues:

        • Failure or delay in issuing drafts, pay orders, or bankers’ cheques.
        • Failure to issue or delay in issuing, or failure to service or delay in servicing or redeeming government securities.

        Operational Issues:

          • Non-adherence to prescribed working hours.
          • Failure to honour guarantees or letter of credit commitments.
          • Delays in providing banking facilities (excluding loans and advances) promised in writing.
          • Delays or non-credit of proceeds to accounts, non-payment of deposits, or non-observance of RBI directives on deposit interest rates.
          • Delays in receipt of export proceeds and handling of export bills for exporters.

          Account Management:

            • Refusal to open deposit accounts without valid reason.
            • Forced closure of deposit accounts without due notice or sufficient reason.
            • Closure of accounts without customer consent.
            • Refusal to close or delay in closing accounts.
            • Levying charges without adequate prior notice.

            Service Issues:

              • Non-adherence to the fair practices code adopted by the bank.
              • Non-adherence to RBI instructions on ATM/debit card or credit card operations.
              • Non-disbursement or delay in disbursement of pension due to the bank’s actions.
              • Refusal to accept or delay in accepting payments towards taxes as required by RBI/Government.
              • Financial loss incurred by the customer due to wrong information given by bank officials.
              • Any other matter related to the violation of RBI directives concerning banking or other services.

              Non-Resident Indians (NRIs):

                • Complaints from NRIs regarding their accounts in India, including remittances from abroad, deposits, and other bank-related matters.

                The Banking Ombudsman Scheme ensures that customers have a dedicated avenue to address their grievances and ensures accountability and transparency within the banking sector.