EXECUTIVE SUMMARY The aim of this project is to introduce the reader to the topic of “THE BANKING OMBUDSMAN”.

The project also deals with the policy adopted by the RBI and the some cases.The ability of the banking industry to achieve the socioeconomic objectives and in the process bringing more and more customers into its fold will ultimately depend on the satisfaction of the customers. Banks have a strong belief that a satisfied customer is the foremost factor in developing our business. This project is focused in understanding the essentiality of the Banking Ombudsman in regards to the public interest and the interest of the banking policies to enable resolution of complaints related to deficiency in banking services. Sensing the need for easy, expeditious and inexpensive mechanism for redressal of unresolved grievances of customers, the RBI initially formulated the Scheme of Ombudsman, 1995, which became operational in June 1995, providing an institutional and legal framework to bank customers to resolve all their complaint The scheme is applicable to all scheduled commercial banks having business in India and scheduled primary co-operative banks except Regional Rural Banks. Banking Ombudsman at important centres was set up to cover the entire country. The Banking Ombudsman offers customers the opportunity to resolve disputes with their banks without needing to resort to the Courts.

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PREFACE OBJECTIVES

 To present Banking Ombudsman Scheme & how it does works.  To present the services of the Banking Ombudsman offered to the customer.  To show how the Banking Ombudsman deals with customer complaints.  To explain the duties, functions & powers of the Ombudsman. METHODLOGY The methodology includes the information of the features of the Ombudsman in the form of primary data that had been received from the Branch Managers of the banks. It also includes the information’s from the related books & the related websites.

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CHAPTER- 01 INTRODUCTION TO BANKING

INTRODUCTION The basic services a bank provides are checking accounts, which can be used like money to make payments and purchase goods and services; savings accounts and time deposits that can be used to save money for future use; loans that consumers and businesses can use to purchase goods and services; and basic cash management services such as check cashing and foreign currency exchange. Four types of banks specialize in offering these basic banking services: commercial banks, savings and loan associations, savings banks, and credit unions. A broader definition of a bank is any financial institution that receives, collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers. This broader definition includes many other financial institutions that are not usually thought of as banks but which nevertheless provide one or more of these broadly defined banking services. These institutions include finance companies, investment companies, investment banks, insurance companies, pension funds, security brokers and dealers, mortgage companies, and real estate investment trusts. Banking services are extremely important in a free market economy such as that found in Canada and the United States. Banking services serve two primary purposes. First, by supplying customers with the basic mediums-ofexchange (cash, checking accounts, and credit cards), banks play a key role in the way goods and services are purchased. Without these familiar methods of payment, goods could only be exchanged by barter (trading one good for
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profession. and businesses would not be able to build the new factories the economy needs to produce more goods and grow. by accepting money deposits from savers and then lending the money to borrowers.another). Enabling the flow of money from savers to investors is called financial intermediation. This in turn allows the economy to grow. the banking institutions in India may be divided into the following types: 4 . savings and loan associations (SLAs). and can be withdrawn by. the depositors of the financial institution. On the basis of functions. TYPES OF BANKS There are various types of banks which operate in our country to meet the financial requirements of different categories of people engaged in agriculture. business. The major differences between these types of banks involve how they are owned and how they manage their assets and liabilities. and property in which the bank has invested. savings would sit idle in someone’s safe or pocket. Assets of banks are typically cash. Liabilities are primarily the deposits received from the bank’s customers. which is extremely time-consuming and inefficient. but not stocks). Banking institutions include commercial banks. etc. securities (bonds. and it is extremely important to a free market economy. people would not be able to purchase cars or houses. They are known as liabilities because they are still owned by. Second. Without this flow. and credit unions. banks encourage the flow of money to productive use and investments. savings banks. loans. money would not be available to borrow.

maintain deposit accounts of all other banks and advances money to other banks.TYPES OF BANK CENTRAL BANKS DEVELOPMENT BANKS SPECIALIZED BANKS COMMERCIAL BANK CO-OPERATIVE BANKS Primary Credit Societies Public Sector Bank Private sector bank Foreign bank Central Banks State Banks Co-operative Co-operative 1. Central Banks A bank which is entrusted with the functions of guiding and regulating the banking system of a country is known as its Central bank. 5 . Such a bank does not deal with the general public. when needed. It acts essentially as Government’s banker.

The Central Bank provides guidance to other banks whenever they face any problem.  Foreign Banks 6 . Development Credit Bank Ltd. It advises the Government on monetary and credit policies and decides on the interest rates for bank deposits and bank loans. It is therefore known as the banker’s bank. No other bank than the Central Bank can issue currency.. Commercial banks are of three types:  Public Sector Banks These are banks where majority stake is held by the Government of India or Reserve Bank of India. Bank of Rajasthan Ltd. Examples of public sector banks are: State Bank of India. etc. In addition to giving short-term loans. Corporation Bank.. Another important function of the Central Bank is the issuance of currency notes. These banks are registered as companies with limited liability. 2. Global Trust Bank. commercial banks also give medium-term and long-term loan to business enterprises. regulating their circulation in the country by different methods. Lord Krishna Bank Ltd.. etc  Private Sectors Banks In case of private sector banks majority of share capital of the bank is held by private individuals. Vysya Bank.. Bank of Baroda and Dena Bank. Commercial Banks Commercial Banks are banking institutions that accept deposits and grant shortterm loans and advances to their customers. For example: The Jammu and Kashmir Bank Ltd. Bharat Overseas Bank Ltd.

The society has to obtain a license from the Reserve Bank of India before starting banking business. the society must follow the guidelines set and issued by the Reserve Bank of India. American Express Bank. or for expansion and modernization. They also undertake other development measures like Public Sector Banks comprise 19 nationalized banks and State Bank of India and its 7 associate banks. Citibank. Some of the foreign banks operating in our country are Hong Kong and Shanghai Banking Corporation (HSBC). Standard & Chartered Bank. Co-operative Societies of the State. for using latest technology. Any co-operative bank as a society is to function under the overall supervision of the Registrar. When a co-operative society engages itself in banking business it is called a Co-operative Bank. Co-Operative Banks People who come together to jointly serve their common interest often form a cooperative society under the Co-operative Societies Act. The number of foreign banks operating in our country has increased since the financial sector reforms of 1991.These banks are registered and have their headquarters in a foreign country but operate their branches in our country. As regards banking business. Such financial assistance is provided by Development Banks. 3. 4. Grindlay’s Bank. etc. Industrial Finance Corporation of India (IFCI) and State Financial Corporation’s (SFCs) are examples of development banks in India. There are three types of co-operative banks operating in our country:  Primary Credit Societies 7 . Development Banks Business often requires medium and long-term capital for purchase of machinery and equipment.

primary credit societies) and function as a link between the primary credit societies and state co-operative banks. The operations of each society are restricted to a small area so that the members know each other and are able to watch over the activities of all members to prevent frauds. The money reaches the individual borrowers from the state co-operative banks through the central co-operative banks and the primary credit societies. These banks provide loans to their members (i. Specialized Banks There are some banks. They mobilize funds and help in its proper channelization among various sectors. 8 .. EXIM bank can provide you the required support and assistance. The bank grants loans to exporters and importers and also provides information about the international market.These are formed at the village or town level with borrower and non-borrower members residing in one locality. which cater to the requirements and provide overall support for setting up business in specific areas of activity. are called specialized banks. 5. They engage themselves in some specific area or activity and thus. SIDBI and NABARD are examples of such banks.  Central Co-operative Banks These banks operate at the district level having some of the primary credit societies belonging to the same district as their members.e.  Export Import Bank of India (EXIM Bank) If you want to set up a business for exporting products abroad or importing products from foreign countries for sale in our country.  State Co-operative Banks These are the apex (highest level) co-operative banks in all the states of the country. EXIM Bank.

use of new technology and market activities. etc. fishing. loan on easy terms can be available through SIDBI. through regional rural banks. It provides financial assistance. 9 . both short-term and long-term.  National Bank for Agricultural and Rural Development (NABARD) It is a central institution for financing agricultural and rural sectors. cottages and village industries in rural areas. NABARD can provide credit. The aim and focus of SIDBI is to promote. If a person is engaged in agriculture or other activities like handloom weaving. It also finances modernization of smallscale industrial units. Small Industries Development Bank of India (SIDBI) If you want to establish a small-scale business unit or industry. to co-operative credit. finance and develop small-scale industries. small scale industries. in the field of agriculture. especially.

10 .g. In the context of the new market economy and rapid technological advances affecting the market. the FPO and AGMARK symbolize standard quality of food products. which is a NB symbol of satisfactory quality of a product? Similarly. some Indian products carry the ISI mark. the right to safety has become a pre-requisite quality in all products and services. For e.RIGHTS OF CONSUMERS Right to Safety The right to be protected against the marketing of goods and services which are hazardous to life and property Consumer right to safety applies to all possible consumption patterns and to all goods and services.

consumers are still wary of getting involved in legal redress system. In India.Right to Information Right to information means the right to be given the facts needed to make an informed choice or decision about factors like quality. you should be informed about. quantity. purity standards and price of product or service. The right to information now goes beyond avoiding deception and protection against misleading advertising. Right to Redress The right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers. But it has not been made complete use of under due to lack of awareness of basic consumer rights among consumers themselves. b) The adverse health effects of its consumption. potency. It is to protect consumer interests that consumers have been given the right to obtain redress. a) How to consume a product. we have a redress machinery called Consumer Courts constituted under the Consumer Protection Act (1986). It means the right to acquire the knowledge and skill to be informed consumer 11 . For e. functioning at national state and district levels. right to redress is perhaps the most commonly exercised consumer right. While in the developed world. when you buy a product or utilize a service. improper labeling and other practices. c) Whether the ingredients used are environment. There are consumer courts in India where any consumer can lodge a case if s/he thinks he or she has been cheated. in developing countries. Right to Consumer Education Consumer education empowers consumers to exercise their consumer rights.g.friendly or not etc.

The right to basic needs means that availability of articles which are the basic need of every consumer must be ensured. POLICY FOR THE GRIEVANCES REDRESSAL OF THE CUSTOMER COMPLAINTS In the present scenario of competitive banking. life cannot exist. This right is being broadened to include the right to be heard and represented in the development of products and services before they are produced or set up. Right to Basic Needs This right is the right to basic goods and services which guarantee dignified living. it also implies a representation. Customer 12 . clothing. Consumer education is dynamic. Without these fundamental amenities. It is the single most powerful tool that can take consumers from their present disadvantageous position to one of strength in the marketplace. not only in government policies. shelter. drinking water and sanitation. excellence in customer service is the most important tool for sustained business growth. Access to food. but also in those of other economic powers. Right to be heard This means the right to be represented so that consumers’ interests receive full and sympathetic consideration in the formulation and execution of economic policy. The right to consumer education incorporates the right to the knowledge and skills needed for linking action and influences factors which affect consumer decisions. water and shelter are the basis of any consumer's life.throughout life. education. energy and transportation. It includes adequate food. health care. participatory and is mostly acquired by hands-on and practical experience.

if they are not fully satisfied with the response of the bank to their complaints Bank will treat all complaints efficiently and fairly as they can damage the bank’s reputation and business if handled otherwise The Bank employees must work in good faith and without prejudice to the interests of the customer. Customer dissatisfaction would spoil bank’s name and image. customer service and customer satisfaction should be the prime concern of any bank. The Bank’s policy on grievance redressal follows the under noted principles:  Customers be treated fairly at all times  Complaints raised by customers are dealt with courtesy and on time Customers are fully informed of avenues to escalate their  Complaints/grievances within the organization and their rights to alternative remedy. The policy document would be made available at all 13   . As a service organization. This policy document aims at minimizing instances of customer complaints and grievances through proper service delivery and review mechanism and to ensure prompt redressal of customer complaints and grievances.complaints are part of the business life of any corporate entity. The review mechanism should help in identifying shortcomings in product features and service delivery. This is more so for banks because banks are service organizations. Such system would ensure that the redressal sought is just and fair and is within the given framework of rules and regulation. In order to make bank’s redressal mechanism more meaningful and effective. The bank believes that providing prompt and efficient service is essential not only to attract new customers. but also to retain existing ones. a structured system needs to be built up towards such end.

branches. All employees of the Bank should be made aware about the Complaint handling process The customer complaint arises due to: The attitudinal aspects in dealing with customers. He can complaint in writing. orally or over telephone. It may be noted that the Ombudsman is the INTRODUCTIONS TO BANKING OMBUDSMAN APPELLATE Authority under the Electricity Act 2003. The DERC Regulations. vide its Notification dated DERC (Guidelines for he can approach Banking 11thMarch. 2003 and has to first approach the therefore an electricity consumer Consumer Grievance Redressal Forum established under the DERC Regulations.   Insurance Ombudsman Inadequacy of the functions/arrangements made available to the customers or gaps in standards of services expected and actual services rendered. The Delhi is not resolved within given time or if he is not satisfied (DERC) Regulatory Commission with the solution provided by the bank. 2003. and the authority was created pursuant to the a decision by the Government of India to enable resolution of complaints of customers of banks relating to certain services rendered by the banks. 2006 has issued establishment of Forum of redressal of grievance of the consumer and Ombudsman) CHAPTER – 2 Regulations. and the Banking Ombudsman is a quasi judicial authority functioning under India’s Banking Ombudsman Scheme 2006. If customer’s complaint Electricity consumers. 14 . the Electricity Act. issues guidelines for establishment of  forum and Ombudsman he The customer is having full right to register his complaint iffor is not satisfied with the services provided by the of grievances of give his redressal bank. Ombudsman with his complaint or other legal avenues available for grievance redressal. 2003. 2003.

Banking Ombudsman is a quasi services to be provided by the judicial authority functioning under India’s Banking Ombudsmanand conductand services providers Scheme. . 20062. and was revised in 2002 and 20061. the deadline for payment is missed by a day or there is Clause 4 lays down that:: miscalculation of the tiniest amount. empowers the Telecom Banking Ombudsman Scheme was first introduced in India in 1995. Using an ombudsman isof quality oftrying to resolve a complaint without going to court. In the wake of the failure in the efficient services of the banks. neither empowered to look into APPOINTMENT & TENURE the grievances of individual customers nor take action against (1) The Reserve Bank may appoint one or more of its officers in the rank of Chief the operators who do not meet General Manager or General Manager to be known as Banking Ombudsmen to quality of standards carry out the functions entrusted to them by or under the Scheme.The Telecom Regulatory Authority of India Act. 1986. As there is no specialized body to redress the (2) The appointment of Banking Ombudsman under the above Clause may be made for a period not exceeding three years at a time grievance of telecom customers. surveys of Telecom services so as to protect the interest of the consumers. The investigate the The Banking Ombudsman is an official authority totelecom operators complaint from the customers and address the frequently threaten to disconnects complaint and thereby bring the solution among the aggrieved parties. the authority was created pursuant to the a decision by theof the periodical India the interest Government of to enable resolution of complaints of customers of banks relating to certain services rendered by the banks. The Banking Ombudsman numbers given t o subscribers if has been defined under clause 4 of the Banking Ombudsman Scheme. they have to approach consumer forum setup under THE Consumer Protection Act. 1997. empowers the Telecom (TRAI) to make the Regulatory Authority of India recommendations on to look into An ombudsman is a person who has been appointed laying down the standards a way of complaints about an organization.15 or civil courts for Resolutions adjudication of disputes. So the Banking Ombudsman plays the role the phones and with draw the of a mediator and serves the purpose of reconciliation. Regulatory Authority of India Act 1997. however. the RBI brought a scheme for the prompt. efficient and courteous services and also to protect the rights of the customers. The TRAI is.

Kolkata and Chennai. The Government of India. which comes into force with effect from 11thNovember 1998. The Ombudsman taxpayer’s 1. to provide . It has power to summon both the parties . Insurance TYPES OF OMBUDSMAN Division under section 114 (1) of Insurance Act.bank and its customer. arbitrator or forum. It is proposed to initially setup offices of Ombudsman at Delhi. Minister of Finance. for appointment of Insurance Ombudsman. has framed the “Redressal of Public Grievance Rules. Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme. The 16 Insurance Ombudsman has started functioning from 1999. Income Tax Ombudsman The government is considering creating an office of Income Tax Ombudsman to protect individual CHARACTERISTICS OF THE BANKING OMBUDSMAN. The Banking Ombudsman does not charge any fee for resolving customers’ complaints. 3. Department of Revenue. 5. has already been passed by any such competent court. tribunal or arbitrator or any  Insurance Ombudsman other forum is pending or a decree or award or a final order. 1938. deposits and other bank-related matters. will identify issues that increase problems for taxpayers and bring those issues to the attention of the ministry of Finance.The Banking Ombudsman has power to consider complaintssend Nonwhere necessary and from Resident Indians having accounts in India in relation to reports to the periodical their remittances from abroad. No complaint can be made before a Banking Ombudsman on the same subject Mumbai. tribunal. suggesting appropriate action. The Ombudsman will make appropriate legislative proposal 2. The Banking Ombudsman is a quasi judicial authority. to the compliance burden or create facilitate resolution of complaint through mediation. All Scheduled Commercial Banks. matter for which any proceedings before any court. 1998”. Department of Economics Affairs. right. 4.

The meaning is wider than ‘consumer’ and TYPES OF of expression ‘any other person’ OMBUDSMAN therefore./Local%20Settings/Tem INCLUDEPICTURE the name 17 INCLUDEPICTURE ".. respect to an Insurance contract can approach the Ombudsman. which has been revised in 2002 and 2005. which were notified on 21stAugust 2003. listed companies and registered stock intermediaries have to disclose ".I. Ombudsman (more tags) The Securities Exchange Board of India (SEBI) frediz79 under section 30 read with subsection (1) of section 11 of the SEBI Act.Share & Embed the SEBI 1992. Electricity Ombudsman The Banking Ombudsman Download this Document for FreePrintMobileCollectionsRe port Document Telecom Ombudsman Income Tax Ombudsman Info and Rating public authorities banks  Banking Ombudsman example ombudsman ombudsman banking The Reserve Bank of India (RBI) first introduced the Banking Ombudsman essay Scheme In1995.E.B. 2003. even third party having Banking Ombudsman grievance withOmbudsman S.. The Regulations provided for the establishment of the office of Ombudsman to Related Documents PreviousNext redress the Grievance of investors in securities and connected matters. has framed (Ombudsman) Regulations. redressal rates introduction  S.impartial settlement of claims and grievance of any person against a Life r General Insurance in Public and private sector./Local%20Setting . The p p.B. The latest revised states Scheme has come into force from 1stJan 2006.E.I.

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or that any practice is so followed./Local%20Settings/Tem 3 p. or received or held by or on behalf of the State or body or institution being or have been dealt with an irregular manner  20 ./Local%20Settings/Tem 1 101 p./Local%20Setting 4 41 p./Local%20Setting 1 10 p. in a manner which is not in the public interest • That the powers. may include any instance or matter in respect of which the Ombudsman has reason to suspect• That the provisions of any law or under the authority of the State or by any person in its employment.. and take action or steps as may be prescribed Act Practices and actions by persons.. enterprises and other private rights and freedoms have taken place. Top of Form Bottom of Form  Without derogating from the provisions.INCLUDEPICTURE ". any request or complaint in respect of instances or matters referred to in that provisions. duties or functions which vest in the State or. body or institution. • INCLUDEPICTURE ". DUTIES & FUNCTIONS OF OMBUDSMAN INCLUDEPICTURE ". Institutions where complaints allege that violations of fundamental INCLUDEPICTURE ". or any person in its employment are exercised or perform in irregular manner That moneys forming part of the funds of the State or body or institution.  The Ombudsman shall enquire into and investigate in accordance with the and concerning• provisions of the Act.. All instance or matters of alleges or suspected corruption and the Add a Comment misappropriation of public moneys or other public property by Officials..

 Any person wishing to lay any instance or matter referred to in provisions before the Ombudsman shall do so in such manner as the Ombudsman may determine or allow The Ombudsman shall not be required to investigate any instance or matter referred to in the provisions which has been laid before him or her is under the provisions when the grounds on account of which the inquiry is desired in the opinion  The provisions shall not apply in respect of any decision taken in or in connect with any civil or criminal case by a court of law. of coins tendered and for charging of commission in respect there of. non-acceptance. of small denomination notes tendered for any purpose. without sufficient cause. non-acceptance. without sufficient cause. and for charging of commission in respect there of. non-payment or delay payment of inward remittances failure to issue or delay in issue of drafts. pay orders or bankers’ cheques 21      . GROUNDS OF CUSTOMERS COMPLAINTS CONSIDERED BY BANKING OMBUDSMAN 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.

levying of charges without adequate prior notice to the customer. complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad. 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. and          22 . deposits and other bank-related matters. refusal to close or delay in closing the accounts. or failure to service or delay in servicing or redemption of Government securities. refusal to issue or delay in issuing. refusal to accept or delay in accepting payment towards taxes. non-observance of Reserve Bank guidelines on engagement of recovery agents by banks. forced closure of deposit accounts without due notice or without sufficient reason. non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on ATM/Debit card operations or credit card operations. as required by Reserve Bank/Government.

consumer court etc. PROCEDURE FOR FILING COMPLAINT Any person who has a grievance against a bank on any one or more of the 23  . The institution complained against is not covered under the scheme. non-acceptance of application for loans without furnishing valid reasons to the applicant. 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  subject matter of the complaint is pending for disposal / has already been dealt with at any other forum like court of law. non-observance of Reserve Bank Directives on interest rates.   GROUNDS OF CUSTOMERS COMPLAINTS NOT CONSIDERED BY BANKING OMBUDSMAN    Ones complaint will not be considered if One has not approached his bank for redressal of his grievance first.   The Frivolous or vexation. disbursement or non-observance of prescribed time schedule for disposal of loan applications. The subject matter of the complaint is not within the ambit of the Banking Ombudsman  If the complaint is for the same subject matter that was settled through the Office of the Banking Ombudsman in any previous proceedings. delays in sanction.

make a written representation to the bank The complaint can be filed if the bank has rejected the complaint or the complainant had not received any reply within a period of one month after the bank received his representation or if the complainant is not satisfied with the reply given to him by the bank  The complaint to the Banking Ombudsman is to be made not later than one year after the complainant has received the reply of the bank to his     24 . may.grounds mentioned above.  The complainant shall before making a complaint to the Banking Ombudsman. make a complaint to the Banking Ombudsman within whose jurisdiction the branch or an advocate Office of the bank complained against is located. copies of the documents. shall be filed before the Banking Ombudsman within whose territorial jurisdiction the billing address of the card holder is located and not the place where the bank concerned or the credit card processing unit is located. himself or through his authorized representative (other than). The complaint shall be made in writing duly signed by the complainant or his authorized representative and shall as far as possible be in the form and shall contain such particulars as specified in the Scheme The complainant shall file along with the complaint. if any. Complaints arising out of the operations of credit cards. which he proposes to rely upon and also a declaration that the complaint is maintainable as per clause 9(3) of the Scheme  A complaint can also be made through electronic means.

Nagar Road. tribunal or arbitrator or any other forum is pending or a decree or award or order has been passed by any such court. tribunal. Chandrachoodan Gujarat. not later than one year and one month after the date  of the representation to the bank. and Diu 009 25 Centre Contact details of the Office of Area of Operation Union Haveli. 1. . The complaint should not be frivolous or vexatious in nature.  The complaint should not pertain to the same subject matter. The complaint should not be in respect of the same subject matter which was settled or dealt with on merits by the Banking Ombudsman in any previous proceedings whether or not received from the same complainant or along with one or more complainants or one or more of the parties concerned with the subject matter. The complaint should be made before the expiry of the period of limitation prescribed under the Indian Limitation Act. arbitrator or forum. Ahmedabad Banking Ombudsman Shri. K . for which any proceedings before any court. No. Daman India Territories of Dadra and .representation or. 1963 for such claims   A dd re s s a nd Ar e a of Ope r a ti on of Ba nki ng Om b ud s ma n Sl. where no reply is received. C/o La Ashram Ahmedabad-380 Reserve Gajjar Bank of Chambers.

Tel.No.079-

26582357, 5807

079-26586718/2657 Fax No.079-26583325

2.

Bangalore

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Bhopal

Click here to send email Shri T. Karunakaran Madhya C/o Post Bhopal-462 Tel.No.0755-2573772, 2573776 Fax No.0755-2573779 Click here to send email Shri K C Mahapatra Orissa C/o Pt. Reserve Jawaharlal Bank of India Marg 001 0674Nehru Reserve Bank of Hoshangabad Box Road, No.32, 011 0755-

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Bhubaneswar

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Chandigarh

Click here to send email Shri Lalit Srivastava C/o Reserve Bank of India Vista Chandigarh Fax – 160 Tel.No.0172-2721011/2721109 No.0172-2721880

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6.

Chennai

Click here to send email Shri S. Ganesh Tamil Fort Chennai 25395963 / 2539 9159 Fax No.044-25395488 Click here to send email Shri B.B.Sangma Assam, C/o Pan Guwahati-781 Tel.No.0361-2542556, 2540445 Fax No.0361-2540445 Click here to send email Shri M. Sebastian C/o Reserve Bank of India Reserve Bank of India Pradesh, Station 600

Nadu,

Union of (except and

C/o Reserve Bank of India, Territories Glacis, Pudducherry 001 Mahe Islands Region)

Tel No. (044) 2539 9170 / Andaman and Nicobar

7.

Guwahati

Arunachal Manipur, Mizoram,

Road, Meghalaya, 001 0361-

Bazar Nagaland and Tripura

8.

Hyderabad

Andhra Pradesh

27

6-1-56, Saifabad,

Secretariat

Road 004 040-

Hyderabad-500 Tel.No.040-23210013, 23243970 Fax No.040-23210014

9.

Jaipur

Click here to send email Shri N.P.Topno Rajasthan C/o Reserve Bank of India, 4th floor Rambagh Circle, Tonk Road Jaipur-302 052 Tel.No.(0141) 2570357/2570392 Fax No.0141-2562220 Click here to send email Smt. Madhavi Sharma Uttar Pradesh (excluding C/o Reserve Bank of India District of Ghaziabad Budh M.G. Road, Post Box No.82 and Kanpur-208 Fax No.0512-2305938 Click here to send email Shri M S C/o 15, Reserve Nethaji Bank of Subhas Tel.No.0512-2306278/2303004 Gautam

10.

Kanpur

001 Nagar) and Uttaranchal

11.

Kolkata

Soy West Bengal and Sikkim India Road 001

Kolkata-700 Tel.No.(O)033-2230-4982 Fax No.033-22305899

28

Aggarwal Maharashtra and Goa C/o Reserve Bank of India Garment 3rd Dr. 001 C/o Reserve Bank of India. Thiruvananthapur and Union 29 .(011) 23710882 Fax No. Road. Gandhi 23730633/ Panchkula).12. Mumbai Click here to send email Shri O. Annie Besant Mumbai-400 House. 011-23725218 Click here to send email Shri A F South Patna-800 Fax No. Floor.022-24960912 Click here to send email Shri M Rajeshwara Banking 13.02224924607/24960893/2493 3358 Fax No. Jammu (except of Nagar and of & the and the Ombudsman Kashmir. Worli.P. 23736270/23736271/23725445/ Ghaziabad and Gautam Budh Nagar of Uttar Pradesh 14. Tel.0612-2320407 Click here to send email Shri F R Joseph Kerala.0612-2322569/2323734 15. Ambala. 018 Tel. Reserve Bank of India Building Haryana 2nd Floor.No. Patna Naqvi Bihar and Jharkhand Maidan.No. 6. New Delhi Rao Delhi. Sansad marg districts New Delhi 110001 Yamuna districts TelNo.

No.0471-2321625 Click here to send email CHAPTER – 03 BANKING OMBUDSMAN SCHEME INTRODUCTION The Banking Ombudsman Scheme. the Annual Report covers the last five-year period with focus on the current year. 1995 in terms of the powers conferred on the Bank by Section 35A of the Banking Regulation Act. as a result of computerization of 30 . The Scheme is being executed by Banking Ombudsmen appointed by Reserve Bank at 15 centers covering the entire country. 1949 to provide for a system of redressal of grievances against banks. As mandated by the Banking Ombudsman Scheme. an Annual Report for the Banking Ombudsman Scheme in a whole is prepared at Reserve Bank of India. the Banking Ombudsmen submit an Annual Report on the functioning of their offices every year. The Scheme sought to establish a system of expeditious and inexpensive resolution of customer complaints. As is being the practice. 1995 was notified by RBI on June 14. Further. The Scheme is in operation since 1995 and has been revised during the years 2002 and 2006. Based on such reports.0471-2326852 2332723/2323959 Fax Junction Lakshadweep and Union 033 Territory of Puducherry / ( only Mahe Region) Thiruvananthapuram-695 No.am C/o Reserve Bank of India Territory of Bakery Tel. Central Office.

Provisions of the Scheme.the functioning of Banking Ombudsman Offices through the Complaint Tracking Software. Generally. Location of the office. Their tenure would be not more than a period of five years. the information analyses for the year 2006-07 pertains to the period July 1. Many new changes have been made in the old scheme. The Section 4 of the scheme provides for the appointment of one or more of the officers of the Reserve Bank of India in the rank of Chief General Manager or General Manager to be known as Banking Ombudsmen to carry out the functions entrusted to them by or under the Scheme. Accordingly. the office of the banking ombudsman is located at the place specified by the Reserve Bank of India. With the decision to merge the Banking Ombudsman Offices with that of RBI offices. as also non-acceptance of small denomination notes and coins or charging of commission for acceptance of small denomination notes and coins by banks. detailed analysis was possible on the information pertaining to year 2006-07. The Banking Ombudsman Scheme 2006 provides a wide scope and extent to the schemes of 1995 and 2002. Appointment and tenure. 2006 to June 30. the accounting period for the Banking Ombudsman Offices was changed from April 1-March 31 to July 1-June 30 to be in congruent with that of RBI offices. The bank customers can complain about non-payment or any inordinate delay in payments or collection of cheques towards bills or remittances by banks. New areas of Complaint. 2007. For the expedite disposal of the complaints. a banking ombudsman may hold office at such places. 2. 31 . The most essential provisions of the scheme are as follows: 1. under his jurisdiction which he deems fit for the disposal of the complaints3.

sanction of loans and advances in so far as they relate to non-observance of the Reserve Bank directives on interest rates. He is to intervene for the ordinary citizen in his dealings with the complex machinery of the establishment. GENERAL PARTICULARS ON THE SCHEME The word ‘Ombudsman’ in general means a ‘grievance man’. Powers and Jurisdictions. the Banking Ombudsman 32 . a public official who is appointed to investigate complaints against the administration. delay in sanction or non-observance of prescribed time schedule for disposal of loan applications or nonobservance of any other directions or instructions of the Reserve Bank as may be specified for this purpose. Authority of each Banking Ombudsman extends to the territorial limits entailed by the Reserve Bank of India. The Scheme envisages expeditious and satisfactory disposal of customer complaints in a time bound manner. Banking Ombudsmen have been authorized to look into complaints concerning deficiency in banking service . from time to time. The scheme lays down the following provisions dealing with powers and functions of the Banking Ombudsman: 4. The Banking Ombudsman on receipt of any complaint endeavors to promote a settlement of the complaint by agreement between the complainant and the bank named in the complaint through conciliation or mediation. For the purpose of promoting a settlement of the complaint.3. any person whose grievance against a bank is not resolved to his satisfaction by that bank within a period of one month can approach the Banking Ombudsman if his complaint pertains to any of the matters specified in the Scheme. and such other matters as may be specified by the Reserve Bank. In India.

instructions and guidelines issued by the Reserve Bank from time to time and such other factors. In 2006. failure in providing the promised facilities. The important new grounds of complaints added include credit card issues. the Reserve Bank of India announced the revised Banking Ombudsman Scheme with enlarged scope that included customer complaints on certain new areas. There is no change in this regard in the Banking Ombudsman Scheme. He shall be guided by the evidence placed before him by the parties. levying of excessive charges without prior notice and issues pertaining to accepting payment towards taxes and issuing/servicing of Government 33 . the principles of banking law and practice. 2002 covered all the Regional Rural Banks in addition to all Commercial Banks and Scheduled Primary Co-operative Banks. levying service charges without prior notice to the customer and non adherence to the fair practices code as adopted by individual banks. deficiencies in providing the promised services even by banks' sales agents. credit card complaints. 1995. 2006. directions.has been allowed to follow such procedures as he may consider appropriate and he is not bound by any legal rule of evidence. If 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 the Banking Ombudsman may consider necessary. non-adherence to fair practices code. he may pass an Award after affording the parties reasonable opportunity to present their case. which were already covered by earlier Banking Ombudsman Scheme. SCOPE OF THE SCHEME The Banking Ombudsman Scheme. such as. which in his opinion are necessary in the interest of justice.

the timeliness in handling the issues. The names. PERFORMANCE OF THE OFFICES OF BANKING OMBUDSMAN The performance of the Offices of the Banking Ombudsman was analyzed on the aspects such as the quantum of complaints handled by them. budget and expenditure of the Banking Ombudsman Offices. There was more than threefold increase in the number of complaints received in the year 2006-07 from the previous year after the Banking Ombudsman Scheme. 2006. 2006 was notified. and appropriateness of the decisions given against the complaints. The grounds of complaints have been enumerated in Clause 8 of the Banking Ombudsman Scheme. Reserve Bank frames the guidelines for operationalizing the Scheme and supervises the running of the Scheme. OPERATIONALISATION Reserve Bank of India operationalised the Banking Ombudsman Scheme by establishing Banking Ombudsman Offices at 15 centers all over the country. The 34 . addresses and area of operation of the Banking Ombudsmen have been given in to Annexure ‘A’. It also supervises the running of the Scheme and administrative arrangements.  Number of Complaints Received The number of complaints received by the Banking Ombudsman Offices had constantly increased in the last five years.securities.

increasing receipt was also observed in the year 2007-08 with a 24% increase from the year 2006-07. 35 . The average number of complaints received per Banking Ombudsman Office has also increased from 550 in 2003-04 to 3192 in 2007-08.

Disposal of complaints by Banking ombudsman offices Period No of Offices of Banking Ombudsman Complaints received during the year Average of complaints per office No. Change from Previous year 2003-04 15 8246 +53 550 2004-05 15 10560 +28 704 2005-06 15 31732 +200 2115 2006-07 15 38638 +22 2576 2007-08 15 47887 +24 3192 36 .

12.The increase in the number of complaints received during the years 2005-06 and2006-07 can be attributed to new areas such as credit card complaints included and to facilitation of complaint submission by allowing complaint submission in any form including by online and by email allowed in the Banking Ombudsman Scheme. complaints of From To Total From 01.01. The increase in the number of complaints received under the Banking Ombudsman Scheme 2006 as compared to the previous scheme clearly indicates the extent to which the scheme has benefited larger sections of the banking customers.06.04. Of these.2006 To Total BO received Total Per Scheme 9723 60647 month 1080 3370 31. The comparative effects of the Banking Ombudsman Schemes 2002 and 2006 in complaint receipt are given as below: period Scheme running No.2007 18 month 2002 BO Scheme  Disposal of Complaints During the year 2007-08. the Banking Ombudsman Offices disposed of 49100 complaints (including from the complaints pending at the beginning of the year and those received during the year). 2006.2005 01. 21747 complaints (49%) were 37 . Per month receipt in the number of complaints received under the BO Scheme 2006 was more than thrice the number of complaints received under the Banking Ombudsman Scheme.2005 9 month 31. 2002.

without sufficient cause. frivolous. etc. pending in other for.settled to the satisfaction of the complainants. In 11% of the complaints. 15914 complaints (36%) could no be considered under the scheme owing to several reasons like being outside the purview of the scheme time-barred. deficiency be considered for reasons like they were pending in other for or the complaints required of complaints over the last five years are furnished in the following table: Disposal of Complaints by banking ombudsman Officer service could not be established and the remaining 24% complaints could not Particulars dealt With during the year Complaints setteles satisfaction of 2003-04 2004-05 12034 2005-06 33363 2006-07 44766 2007-08 54992 Total complaints 9483 3998 to (42%) 5440 (45%) 14931 (45%) 21747 (49%) 39365 (53%) complainants(a) Complaites could 4011 not be (42%) considered under the scheme(b) The number of 8009 complaints disposed of(a+b) Complaints under process (84%) 1474 (16%) 4963 (41%) 12304 (37%) 15914 (36%) 19735 (36%) 10403 (86%) 1631 (14%) 27235 (82%) 6128 (18%) 37661 (84%) 7105 (16%) 49100 (89%) 5892 (11%) 38 . A such sample analysis of 756 complaints that could not be considered under the Scheme disclosed that 42% of complaints fell outside the purview of the scheme and 23% were first resort complaints and could not be taken of up by the Banking Ombudsman.

either by mutual settlement or by issuing an Award. only 563 awards were issued which formed less than 2% of the total 49. Mode of disposal of complaints (Other than complaints that could not be considered) 39 . During the period reviewed.253 complaints disposed of. Details are as given table below. Mode of Disposal of Complaints The Banking Ombudsman disposed of complaints. the number of awards issued and the percentage of disposal through award issuance have come down despite huge increase in the complaints received. During the period above. other than the complaints that could not be considered. the ratio of complaints disposed by settlement to the complaints disposed by award was around 99:1 clearly indicating the effectiveness of the Banking Ombudsmen in arriving at mutually agreed consensus between bankers and complainants. The fact that the Banking Ombudsmen could dispose of more than 98% of the complaints by mutual settlement between the complainant and the concerned banks to their satisfaction indicates that they took appropriate decisions taking into consideration all the relevant and extant legal and banking instructions and practice. From the year 2006-07.

No Year No.24 3877 5275 14785 21662 29295 97.98 0.Sr.03 0.78 96.61 99. complaints disposed of of Disposal award by Disposal by settlement NO.76 40 . % No. % 1 2 3 4 5 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 3998 5440 14931 21747 29365 121 165 146 84 70 2.97 99.39 0.02 99.21 3.

The details are given in the following table: 41 .Category-Wise The analysis of complaints received at the Banking Ombudsman offices includes analysis of subject category of complaints and the bank-groups against which the complaints were made. besides the miscellaneous complaints. etc. • Analysis of Complaints: Analysis of Complaints dealt with . Computerization of the functioning of Banking Ombudsman Offices through the Complaint Tracking Software has enabled detailed analysis in this regard. deficiency in servicing of loans and advances and delay in collection of cheques/bills. The maximum number of complaints dealt with during the last five-year period pertained to complaints regarding deposit accounts.

Complaints pertaining to deposit accounts.category-wise Category Deposit Accounts Loans and Advances Collection of 2002-03 2500 (27%) 1651 2003-04 250(27%) (26%) 1226 2004-05 3239 (27%) 2291 2005-06 6733 (20%) 5251 2006-07 5803 (15%) 5151 908 1226 (13%) 4756 (50%) 9483 1245 (19%) 5259 (44%) 12034 3058 (16%) 18357 (55%) 33363 4058 (11%) 23626 (61%) 38638 cheques/bills (14%) Others Total 2158 (38%) 6506 However. the maximum number of complaints received pertained to credit cards at 20%.Analysis of complaints dealt with . loans and advances and remittances occupied the next three places in the number of complaints received. The details are shown below. during the year 2006-07. Complaint received in 2006-07 & 2007-08 category wise 42 .

5.No. 9. 10. 6.General Loans and advances-Housing Charges without notice Pension Failure on commitments made DSAs and recovery agents Notes and coins Others Total 5803 4058 7688 4442 709 2594 1070 1469 1039 130 9636 38638 43 . 2.Sr. 11. 3. Nature of complaint Received during 2006-07 2007-08 5612 5213 10129 5297 757 3740 1582 6388 3128 141 5900 47887 1. 8. 4. 7. Deposit accounts Remittances Credit cards Loans and advances .

printing and stationery expenses. law charges. The capital expenditure items include the furniture. publicity expenses. 44 . taxes.COST DETAILS OF RUNNING THE SCHEME The costs of the Scheme include the revenue expenditure and capital expenditure incurred in running the Banking Ombudsman offices. The revenue expenditure includes the establishment items like salary and allowances of the staff attached to Banking Ombudsman offices and non-establishment items such as rent. depreciation and other miscellaneous items. insurance. postage and telegram charges.

81 12. to 45 . By performing this role.50 9.483 12. and second.611 CHAPTER-4 DIFFERENCE BETWEEN BANKING OMBUDSMAN SCHEME 1995. computers/related equipments.363 38.045 2.887 7. first. telecommunication equipments and motor vehicle. 2002 & 2006 The Ombudsman’s task is to provide citizens with a means of redress for maladministration. period Total cost (Rs.638 47. to relieve the burdens of litigation by promoting friendly settlement and making recommendations to avoid the need for proceedings in courts.electrical installations.538 2.Cr) No.315 3.60 10.034 33.of complaints dealt Cost complaint (Rs) per 2003-04 2004-05 2005-06 2006-07 2007-08 7.413 6.03 7.16 9. the Ombudsman helps.

expeditious and inexpensive redressal of customer grievances. In India. The new scheme widens its scope thereby to include customer complaints on certain areas like credit card complaints. It is made applicable to all commercial banks. On the basis of the new Banking Ombudsman Scheme. The Reserve Bank of India notified the revised Banking Ombudsman Scheme. including online and the bank customers are entitled to file an appeal with the Reserve Bank of India. regional rural banks and scheduled primary cooperative banks whose principal place of business is in India. 2006 which came into effect from January 1. This is however subject to the complaint pertaining to any of the matters specified in the Banking Ombudsman Scheme. any person whose grievances against a bank are not resolved to his satisfaction by that bank within a period of two months then he can approach the Banking Ombudsman for redressal. The Revised Scheme with well-equipped staff is wholly funded by the Reserve Bank of India. Reserve Bank of India (RBI) which assumes the role similar to that of quasi-legal machinery as it is established by a competent authority to provide for an additional but optional legal remedy for effective. It provides a forum for bank customers for redressal of their common complaints against banks. The Ombudsman is impartial and has a conciliatory approach. deficiencies in providing the promised services even by banks’ sales agents. levying service charges without prior notice to the customer and non.promote the effective implementation of citizen's rights. 2006 the customers are also privileged to complain about non-payment or any inordinate delay in payments or collection of 46 . Towards effective compliance of this optional legal remedy it introduced the Banking Ombudsmen Scheme in 1995 and got it further amended in 2002 and in 2006.adherence to the fair practices code as adopted by the individual banks. This new scheme allows the complainants to file a complaint in any form. 2006.

Yes. leveraging on technology and human resources. The 47 . The extent and scope of the scheme. the RBI lodged various Ombudsman schemes till today which forms a part of our discussion. The new Scheme also provides for online submission of complaints. Establishes an appellate authority to facilitate appeals against the awards rendered by the Banking Ombudsmen instead of filing with the Review Authority for review of such awards. sound and globally competitive financial system. adopting the best accounting and ethical practices and fulfilling corporate and social responsibilities towards all stakeholders. as also non acceptance of small denomination notes and coins or charging of commission for acceptance of small denomination notes and coins by banks. As a part of this vision. The Banking Ombudsmen currently have their offices in 15 centers covering the entire country. providing integrated services to customers from all segments. deficiencies in providing the without prior notice to the customers and non-compliance of promised services by • • banks and its marketing agents. 2006 is much wider than its earlier schemes of 1995 and 2002. levying of service charges fair practice codes by the banks. • Includes complaints relating to credit cards. Because the new scheme introduces for the first time. Is the New Banking Ombudsman Scheme 2006 differs from its previous schemes? The vision behind the emergence of Banking Institution is to evolve into a strong.cheques towards bills or remittances by banks. the new scheme 2006 differs from its previous schemes. Facilitates the submission of complaints through online. The extent and scope of the new Scheme is wider than the earlier Scheme of 2002.

the revised scheme will come into effect from January 1. AMENDMENT PASSED BY RBI FOR THE CHANGES IN BANKING OMBUDSMAN SCHEME. Date: 26 Dec 2005 The Reserve Bank of India today announced the revised Banking Ombudsman Scheme with enlarged scope to include customer complaints on certain new areas. 1949 and in partial modification of its Notification dated December 26. such as. 2006. regional rural banks and scheduled primary co-operative banks shall comply with the Banking Ombudsman Scheme. 2006: Amendment 1: RBI expands Scope of Banking Ombudsman Scheme. Reserve Bank of India hereby amends the Banking Ombudsman Scheme 2006 to the extent specified in the Annex hereto. The amendments in the Scheme shall come into force from January 1. In order to increase its effectiveness. Applicable to all commercial banks. 2006 as amended hereby. credit card complaints. Includes Fair Banking Practices. levying service charges without prior notice to the customer and non adherence to the fair practices code as adopted by individual banks. deficiencies in providing the promised services even by banks' sales agents. 2005. The Reserve Bank hereby directs that all commercial banks. the revised Banking Ombudsman Scheme will be fully staffed and funded by the Reserve Bank instead of the 48 . In exercise of the powers conferred by Section 35A of the Banking Regulation Act. regional rural banks and scheduled primary cooperative banks having business in India.new Scheme additionally provides for the institution of an 'appellate authority' for providing scope for appeal against an award passed by the Ombudsman both by the bank as well as the complainant. 2006.

including those relating to credit cards. The Banking Ombudsmen currently have their offices in 15 centers. The new scheme provides a forum to bank customers to seek redressal of their most common complaints against banks. The Reserve Bank is also in an advanced stage of setting up an independent Banking Codes and Standards Board of India to ensure that comprehensive code of conduct for fair treatment to customers are formulated by banks and adhered to. but not kept by banks. The bank customers would now be able to complain about non-payment or any inordinate delay in payments or collection of cheques towards bills or remittances by banks.banks. The Scheme was revised in 2002 mainly to cover Regional Rural Banks and to permit review of the Banking Ombudsmen’s awards against banks by the Reserve Bank. The Reserve Bank had first introduced the Banking Ombudsman Scheme in 1995 to provide expeditious and inexpensive forum to bank customers for resolution of their complaints relating to deficiency in banking services. Amendment 2: Customers can now appeal against the Banking Ombudsman's Decision. as also non. Under the revised Banking Ombudsman Scheme. the complainants will be able to file their complaints in any form. service charges. The bank customers would also be able to appeal to the Reserve Bank against the awards given by the Banking Ombudsman.acceptance of small denomination notes and coins or charging of commission for acceptance of small denomination notes and coins by banks. promises given by the sales agents of banks. including online. as also. The Reserve Bank of India had announced setting up of the Board in its Annual Policy for 2005-2006 announced by the Governor. Dr Y V Reddy in April 2005. delays in delivery of bank services. Date: 24 May 2007 49 .

Regional Rural Banks and Scheduled Primary Co-operative Banks. The Scheme now covers all Scheduled Commercial Banks. 2006 to enable the customers to appeal against the Banking Ombudsman's decision. Before the scheme was amended. including credit cards. the Reserve Bank had announced that based on customer feedback. The Reserve Bank of India has amended the Banking Ombudsman Scheme. It may be recalled that in the Annual Policy for 2007-2008. The appellate authority for the Banking Ombudsman Scheme is the Deputy Governor of Reserve Bank of India. the bank customers could appeal only against the awards given by the Banking Ombudsman. after exhausting the channel available with the bank concerned for resolving their complaints. the Banking Ombudsman Scheme enables speedy and cost effective resolution of complaints of bank customers relating to deficiency in bank services.Bank customers can now appeal against the decision of the Banking Ombudsman where he has rejected the customer's complaint relating to matters falling within the grounds of complaints specified under the scheme. 50 . Originally introduced in 1995. it would amend the Banking Ombudsman Scheme. The customers can also now complain to the Banking Ombudsman against deficiency in almost any banking services. The Banking Ombudsman tries to resolve the complaint through conciliation or mediation and even passes an award if it is not resolved through such settlement. The Reserve Bank has appointed 15 Banking Ombudsmen who are located mostly in State Capitals under the Scheme. 2006 to extend the appeal option also to the decisions of the Banking Ombudsman. The amendments are available on the RBI website.

in July 1906. The Bank has gone through the 51 . then a small port in Karnataka.5 A Brief Profile of the Canara Bank Widely known for customer centricity. Canara Bank was founded by Shri Ammembal Subba Rao Pai. a great visionary and philanthropist. at Mangalore.CHAPTER .

2681 branches providing Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking' services. Canara Bank occupies a premier position in the comity of Indian banks. Eighties was characterized by business diversification for the Bank. the Bank has further expanded its domestic presence.various phases of its growth trajectory over hundred years of its existence. the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs. The eventful journey of the Bank has been characterized by several memorable milestones. These include: • • • • • • • Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of ‘Good Banking’ – Bank’s Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit card for farmers Providing Agricultural Consultancy Services Over the years. As at June 2010. especially after nationalization in the year 1969. with 3057 branches spread across all geographical segments. the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. With an unbroken record of profits since its inception. Canara Bank has several firsts to its credit. attaining the status of a national level player in terms of geographical reach and clientele segments. 52 .one of the highest among nationalized banks. the Bank completed a century of operation in the Indian banking industry.covering 732 centres. Growth of Canara Bank was phenomenal. all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities. Keeping customer convenience at the forefront. Under advanced payment and settlement system. In June 2006. Today.

is in fact deeply rooted in the Bank's founding principles. delay in transfer of accounts and pension-related issues. Promoting an inclusive growth strategy. We strongly believe that the next century is going to be equally rewarding and eventful not only in service of the nation but also in helping the Bank emerge as a "Global Bank with Best Practices". in various corporate social responsibilities. "A good bank is not only the financial heart of the community. namely. serving national priorities. promoting rural development. enlightened leadership and a family like work culture. These insightful words of our founder continue to resonate even today in serving the society with a purpose. adding that the bank will try to solve issues with a 72-hour turnaround time. most complaints are regarding ATM cards. the Bank has also carved a distinctive mark. committed staff and uncanny leadership ability demonstrated by its leaders at the helm of affairs. There are about three complaints a day now. delay in sanctioning housing loans. According to him. to the continued patronage of its valued customers. customer centricity.” he said. The centralised 53 .Not just in commercial banking. The growth story of Canara Bank in its first century was due. but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people". Canara Bank customers can now post complaints on consumer Web sites: Addressing complaints “Our customer service cell will be the monitoring wing of the bank. stakeholders. among others. which has been formed as the basic plank of national policy agenda today. enhancing rural self-employment through several training institutes and spearheading financial inclusion objective. This justifiable belief is founded on strong fundamentals. he pointed out.

” Interaction with customer Customer's expectation/requirement/grievances can be better understood through personal interaction with customers by Bank's staff. and the attempt is to convince the customer that we are sensitive to their requirements.” said Mr Pai. Structured customer meets will give a message to the customers that the bank cares for them and values their feedback/suggestions for improvement in customer service. Sensitizing the operating staff on handling complaints Our staff will be properly trained for handling complaints. The feedback from customers would be a valuable input for revising our product and services to meet customer requirements. adding.customer service cell currently has three members. During all the Training Sessions at our Apex Staff Training College and Regional Staff Training Colleges the importance of handling complaints is explained to all the participants and they are trained to deal with customer complaints. “We are in a services industry. 54 . “The six sites that we have identified are not exhaustive. Many of the complaints arise on account of lack of awareness among customers about bank services and such interactions will help the customers appreciate the banking services better. Nodal Officer for the Bank will ensure that internal machinery for handling complaints/grievances operates smoothly and efficiently at all levels and he will be giving feed back on training needs of staff at various levels to the Human Resources Department. in addition to separate cells in each circle office of the bank. and the circle should monitor such other sites for taking further action on matters regarding our bank.

customer may approach Banking Ombudsman appointed by Reserve Bank of India under Banking Ombudsman Scheme. If the customer wants to make a complaint. we will inform : • • • • • Where to make complaint How a complaint should be made When to expect a reply Whom to approach for redressal What to do if customers are not happy about the outcome 55 . 2006. Internal Machinery to handle customer complaints/grievances a. 2006 are displayed in the branch notice boards and the scheme itself is displayed on our Website www. if customer does not get a satisfactory response from us and if customer wishes to pursue other avenues for redressal of grievances. Within 30 days of lodging a complaint with us. Salient features of the Banking Ombudsman Scheme. b.canarabank. 2006 of the Reserve Bank of India .Canara Banking scheme : a. We have displayed on our website and in all our Branches a notice explaining that we are covered by the Banking Ombudsman Scheme. The copy of the scheme is made available at all the branches and will be issued to customers at a nominal charge. If customers face any difficulty our Staff will explain the procedure in this regard.com.

After examining the matter. we will send our final response or explain why we need more time to respond and shall endeavour to do so within 30 days of receipt of complaint and will tell customers to take their complaint further if they are still not satisfied. we will endeavour to send an acknowledgement/a response within a week. 56 . If the Branch Manager feels that is not possible at his/her level to solve the problem he/she may refer the case to Regional or Circle Office or Head Office for guidance. then he shall be provided with alternate avenues to escalate * the issue if the same is not resolved within the stipulated period.b. It is his/her foremost duty to see that the complaint should be resolved completely to the customer's satisfaction and if the customer is not satisfied. If customer complaint in relayed over phone at our designated telephone helpdesk or customer service number we shall provide a complaint reference number and keep customers informed of the progress within a reasonable period of time. The Bank will inform customers where to find details of procedures for handling complaints fairly and quickly. He/she would be responsible for ensuring closure of all complaints received at Branches. If the customer complaint is received in writing. COMPLAINT REDRESSAL MECHANISM IN CANARA BANK AT BRACH Resolution of graveness Branch Manager will be responsible for the resolution of the complaints/grievances in respect of customer's service by the Branch. c. d.

m. • • Special Customers' Meet is conducted on special occasions. to meet customers without any prior appointment.m. Counter staff are provided with training and additional inputs. Suggestion Box and complaint Book are provided in all the branches. AT REGIONAL OFFICE/CIRCLE OFFICE 57 . if Regional Office/Circle Office finds that they are not able to solve the problem such cases may be referred to the Nodal Officer of the Bank. Circle Offices.Similarly. • Customers' Day is observed on 15 th of every month. Customer Fortnight is observed to create awareness among Public as well as staff for achieving the objective of Complaint free branch network and also highlight our products and services. the branch incharge intervenes and tries to resolve the issue. and 5 p. Every year. The sole task of the • Committee is to find out ways and means to render service to the satisfaction of the Customers. • Customer Service Committee meetings is held every month at all Branches. On this day branch in-charge will make himself available at the branch between 3 p. If counter staff/Supervisor is unable to resolve a grievance. • • • All branches other than small branches have " May I help you counters ". Any written complaint is instantly and promptly acknowledged. For this purpose • Committee will meet regularly at stipulated intervals to discuss in detail the strengths and deficiencies of the services presently rendered and take steps to improve it.

for • • ensuring timely redressal of the complaint. as per the detailed checklist • Divisional Manager / Assistant General Manager in-charge of Customer Service Section. accountability is fixed and erring employees punished. • An acknowledgement is sent to the customer immediately on receipt of the complaint. Head Office. • Divisional Managers(O) / Assistant General Manager(O) visit branches periodically and submit a report on Customer Service. • Thorough analysis of the complaints is done and necessary instructions are given to CO/RO/ Branches for speedy redressal and followed up till 58 . AT HEAD OFFICE • A full-fledged Customer Service Section is functioning at M&CRM Wing. meet him personally with the Branch Manager. steps are taken to settle the matter within a reasonable time.• Divisional Manager / Assistant General Manager hold exclusive charge of Customer Service Section at Regional Office/Circle office. • • By and large. complaints are redressed within shortest possible time. Regional office / Circle Office contact the aggrieved customers as and when necessary. overseen by General Manager. Wherever deficiencies are noticed. Still there may be some aggrieved customers who write to Head office. Whenever it is not possible and more cross checking is required.

m. • Special Customers' Meets are organised for different segments of the market. • Grievance Escalation System • Customers can lodge their complaints directly to Branch-in-charge and it will be the responsibility of the Branch-in-charge to resolve the complaint within 7 days from the date of receipt. • The complaints referred to Regional Office/Circle Office will be analysed by Customer Service Section and based on the explanation received from the Branch. viz. etc. NRI. Agriculturists. 59 . • On 15 th of every month. the complaint will be referred by the Branches to the concerned Regional Office/Circle along with their comments / replies for further action. Exporters. • If the Branch-in-charge is not able to resolve the complaint within 7 days.m. SSI. • The Branch-in-charge will analyse the complaint and if need be he/she will contact the complainant personally and resolve the complaint.final redressal letter is sent to the complainant duly explaining the decision taken on the complaint. Customers' Day is observed between 3 p.. and 5 p. if the complaint is resolved at Branch level. • A complaint redressal letter will be sent to complainant. RO/CO will send a suitable reply to complainant. Customer Satisfaction Surveys through In-house as well as by External agencies are conducted to assess the level of customer satisfaction. The Branch will also send the details of the grievance received by the at periodical intervals to Regional Office/Circle Office.. during which our overseeing • Executives are available for meeting the public / Customers without prior appointment.

COMPLAINTS/ GRIEVANCES  Customer Service Committee of the Board This sub-committee of the Board would be responsible for formulation of a Comprehensive Deposit Policy incorporating the issues such as the treatment of death of a depositor for operations of his account. A complaint redressal letter is sent to the complainant from Head Office and suitable instruction are passed on to Branch. Head Office along with their comments/replies. the same will be referred to Customer Service Section.• If the reply received from the Branch is not satisfactory and if Regional Office/Circle Office cannot resolve the complaint within 7 days from the date of receipt of complaints. Head Office will analyse the complaint and the replies received from Branch and Regional Office/Circle Office. Circle Office for taking action in the deficient areas. the product approval process and the annual survey of depositor satisfaction and the tri-enniel audit of such services. This Committee would also review the functioning of Standing Committee on Customer Service. On placing the matter before appropriate authorities a decision is taken on the complaint. responsible for examining loan policies and service issues for the individual as a borrower also. • Customer Service Section. therefore. The Committee would also examine any other issues having a bearing on the quality of customer service rendered. both as a depositor and also as a borrower. Regional Office. The Customer Service Committee of the Board is responsible for the rendering of customer service to the individual. Head Office along with their comments/explanations. The Regional Office/Circle Office will also send the details of the complaints received directly by them and not settled within seven days to Customer Service Section. The Committee is. 60 .

• Evaluate feed-back on quality of customer service received from various quarters. Besides two to three senior executives of the bank. the committee would also have two to three eminent non-executives drawn from the public as members. The committee would have the following functions. Specific time schedule is set up for handling complaints and disposing them at all levels including branches/Regional Offices/Circle Offices 61 . • The committee also would consider unresolved complaints/grievances referred to it by functional heads responsible for redressal and offer their advice. Towards this. • The Committee would be responsible to ensure that all regulatory instructions regarding customer service are followed by the bank. the committee would obtain necessary feed-back from zonal/regional managers/ functional heads. Standing Committee on Customer Service The Standing Committee on Customer Service will be chaired by the Managing Director/ Executive Director of the Bank. • The committee would submit report on its performance to the customer service committee of the board at quarterly intervals. The committee would also review comments/feed-back on customer service and implementation of commitments in the Code of Bank’s Commitments to Customers received from BCSBI. TIME FRAME Complaints received will be seen in right perspective and will be analyzed from all possible angles.

The Branch Manager will try to resolve the complaint within specified time frames decided by the Bank.and Head Office. TIME SCHEDULE FOR REDRESSAL OF COMPLAINTS Adopted by bank 21 days 15 days Stipulated by MOF General Complaints Complaints by 30 days forwarded 21 days RBI/MOF MPs/VVIPs Complaints from PMs 15 days office 7 days 62 .

Z.(Rupees Five lakhs only) to their supplier and mentioned the supplier’s account No.30 a. 1 Complaint in brief: ‘X’ the complainant.04 (Sunday). There is no record to show that efforts were made to verify the authenticity of the existence of account opened firm.00. had issued cheque dated 20. on the reverse side of the Cheque. Thus the account was duly introduced with sufficient proof of address.CHPTER – 6 CASE STUDY COMPENDIUM OF CASE HANDLED BY THE BANKING OMBUDSMAN OFFICE SUBJECT: Refusal to Close the Account Complaint No. The bank contended that the opening of account was supported by proof of addresses submitted by the customer. The cheque was deposited in the drop box of ABC Bank. The cheque was taken out of the drop box by a miscreant who opened current account in the name of the supplier with Y Bank on 24. the introducer’s account was less than 6 monthsold. As per the records of Y Bank.m. In the case of Kerala State Co-operative Marketing Federation vs State Bank of India and others.10.000/.10. on 22. In the instant case.5. Y Bank confirmed having observed the KYC norms.04 at about 10. the supplier was a proprietary concern owned by one Mr. Decision by ombudsman The person giving introduction should be of some standing and have an accountwith the bank for at least six months to ensure that the accounts are not opened on the introduction of new account holders or persons having small and marginal balances.10.2004 for Rs. the Supreme Court of India has spelt out the principles 63 .

governing the liability of a collecting banker are: As a general rule the collecting banker shall be exposed to his usual liability under common law for conversion or for money had and received.5.2004. 1881. The cheque for Rs. Rs. proof of negligence particularly if the cheque in question has been deposited in the account soon after the opening thereof.10.2004 64 . of course.000 issued by the complainant was deposited in the account on 25.000 was drawn in the morning of 29. may claim protection from such normal liability provided he fulfils strictly the conditions laid down in Section 131 or Section 131A of the Negotiable Instruments Act. in the event the customer from whom he collects the cheque or draft has no title or a defective title. the opening of the account and depositing of the cheque in question therein form part and parcel of one scheme as where the account is opened with the cheque in question or deposited therein so soon after the opening of the account as to lead to an inference that depositing the cheque and opening the account were interconnected moves in an integrated plan.10.2004. It is the banker seeking protection who has on his shoulders the onus of proving that he acted in good faith and without negligence.3. The banker. and one of those conditions is that he must have received the payment in good faith and without negligence. as against the “true owner” of a cheque/draft. though not conclusive. Negligence in opening the account such as failure to fulfil the procedure for opening an account which is prescribed by the bank itself or opening an account of an unknown person or non existing persons or with dubious introduction may lead to a cogent.00. however. The value of the cheque was credited on 27. Negligence is a question of fact and what is relevant in determining the liability ofa collecting banker is not his negligence in opening the account of the customer but negligence in the collection of the relevant cheque unless. It may be noted that Y Bank opened the account in the name of the supplier on 24th October 2004.10.00.

which contained the ATM card number and his account number. the card holder has undoubtedly made the three ATM cash withdrawals of 65 . Y Bank was found to be deficient in opening the current account without proper introduction and verification. The complainant requested to restore the unauthorized debit made by the bank.80. The Banking Ombudsman advised the bank to explain the position to the complainant to his satisfaction along with the documentary evidence and the complainant was advised that on the basis of the documentary evidence for ATM transactions provided by the bank.00.and Rs. they informed that it purported to the ATM transactions made by him. 2 Complaint in brief: The complainant having a savings bank account with the subject bank found thatthere was an unauthorized debit of Rs. his argument that he was not aware of the ATM transactions made by him cannot be accepted. thereby enabling the account holder to open the account. The account was introduced by a person who did not have account with the branch for a minimum period of six months as per guidelines of RBI. The address of the account holder in the driving license was left blank.80.5.000/. The debits were made by the bank after six months without intimation to the complainant.out of Rs.4.000 drawn in the afternoon. On enquiry with thebank. The complainant claimed that he had not withdrawn any amount on that day.000/-. Complaint No. Decision by ombudsman The Banking Ombudsman perused the documentary evidence for ATM transactions produced by the bank.1. The Y Bank was negligent in opening the account in the name of the complainant allowing the depositor to immediately draw Rs. deposit the cheque and draw major portion of the cheque proceeds in quick succession. As nobody other than the card holder can operate the ATM and withdraw money. 15000 in his account.

In the circumstances. his salary and other allowances were being directly credited to his account with the bank. The complainant was out of India during the material time. Complaint No. The bank could not bring out any evidence/proof that the complainant was in any way connected with the fraud or his involvement in the forgery. with the opposite party bank. A police complaint was also filed. 66 . Decision by ombudsman The subsequent developments after filing of the police complaint and the opiniongiven by the GEQD.5000/. The total amount so fraudulently withdrawn from his account amounted to Rs. prima facie forgery had been established. the banker cannot debit his customer’s account in case he pays the sum unless he establishes adoption or estoppel.each. leads to an irrefutable conclusion that the culprits had made fraudulent withdrawals by forging the signature of the complainant.000/-. He alleged that the bank had issued a cheque-book without his knowledge to someone else and had passed cheques which were not drawn by him.977. however clever the forgery is. Legally if the drawer’s cheque is forged or unauthorised. Being an employee of TCS..Rs. 3 Complaint in brief: The complainant was having a Saving Bank Account.

of Name the of complaint the are as under: Complainant …………………. Dear Sir. Sub: Complaint against …………………….FORM OF COMPLAINT (TO BE LODGED) WITH THE BANKING OMBUDSMAN (TO BE FILLED UP BY THE COMPLAINANT) To: The Place of Banking BO’s Ombudsman office…………………………..(Name of the bank’s branch) of …………………………………………………………………………………(Name the of Bank) Details 1. . ………………. 2.…………………… ……………………. Full Address of the Complainant …………………… …………………… …………………… Pin Phone Email No/ Code Fax No... 67 .

3. 4. (a) Date of representation already made by the complainant to the bank (Please enclose a copy of the representation) ………………………. Subject matter of the complaint (Please refer to Clause 8 of the Scheme) ………………………………………………………………………………………… 7. of please the enclose complaint: separate sheet) ……………………………………………………………………………………………… 68 . ……………………. Complaint against (Name and full address of the branch/bank) …………………………. Particulars of Bank or Credit card Account (If any) ………………………………………………………………………… 5. (b) ( Whether Please any reminder was a sent copy by the of complainant? the YES/NO ) enclose reminder ………………………. (If space Details is not sufficient. Pin Phone No. / Code Fax No. ……………………. 6.

Nature of Relief sought from the Banking Ombudsman ……………………………………………………………………………… ( Please enclose a copy of documentary proof.8. furnished b) I/We have not concealed or misrepresented any fact stated in the above columns and in the documents submitted herewith. (Please 12. claimed by the complainant by way of compensation (please refer to clauses 12 (5) & 12 (6) of the Scheme) Rs. 11. in support of your claim ) 10. information the complainant/s herein herein above is declare true and that: correct. Whether any reply (Within a period of one month after the bank concerned received the representation) has been received from the bank? Yes/ No ( if yes. if any. (i) a) and I/ the List enclose a of copy of documents all the enclosed: documents ) Declaration: We. (ii) The complaint is filed before expiry of period of one year reckoned in accordance with the provisions of Clause 9(3)(a) and (b) of the Scheme. please enclose a copy of the reply ) 9. (iii) The subject matter of the present complaint has never been brought before 69 . Nature and extent of monetary loss. ………………. if any.

. Yours (Signature of faithfully. (v) I/We authorise the bank to disclose any such information/ documents furnished by us to the Banking Ombudsman and disclosure whereof in the opinion of the Banking Ombudsman is necessary and is required for redressal of our complaint.the Office of the Banking Ombudsman by me/ us or by any of the parties concerned with the subject matter to the best of my/ our knowledge. (vi) I/We have noted the contents of the Banking Ombudsman Scheme.) I/We the above named complainant/s hereby nominate Shri/Smt…………………………………………. the following declaration should be submitted. who is not an Advocate and whose address is …………………………………………………………………………………………… ………………………… ……… as my/our REPRESENTATIVE in all proceedings of this complaint and confirm 70 . Complainant) NOMINATION – (If the complainant wants to nominate his representative to appear and make submissions on his behalf before the Banking Ombudsman or to the Office of the Banking Ombudsman. (iv) The subject matter of the present complaint has not been decided by/pending with any forum/court/arbitrator. 2006.

the complaint need not be signed of Representative) 71 .that any statement. ACCEPTED (Signature (Signature of Complainant) Note: If submitted online. He/She has signed below in my presence. acceptance or rejection made by him/her shall be binding on me/us.

is responsive to the needs of those who use it. Definitely the Scheme needs popularity in the society for its more appropriateness and effectiveness so that the aggrieved bank customer with the services of the bank prefers to knock the door of the banking ombudsman for redressal. the procedures are fair together with cost. 72 . with a view to do away with the banking customer complaints. The reason is they are well popular among the common public which is lacking with the banking ombudsman and its working. and provides as much certainty as the nature of particular cases allows. the results are delivered very soon. the scheme was amended in subsequent years of 2002 and 2006. Though the Banking Ombudsman is eligible enough to deliver the bank customer complaints at the earliest yet the Consumer Redressal Forum/Commission is being taken resort of by most of the bank customers for their redressal of grievances with the bank.CONCLUSION Though the Banking Ombudsman Scheme was introduced in the year 1995. The system deals with cases at reasonable speed. In the system of Banking Ombudsman. and proportionate to the nature of the issues involved. which are governed under the scheme. that is the reason behind the increasing consumer cases against the banks. This is true because over the past five years nearly 36000 complaints are being resolved by the Banking Ombudsman under this Banking Ombudsman Scheme. But the banks do not seem to have adopted the norms for their efficient functioning. is understandable to those who use it. The scheme should provide more powers and levy more duties on the banking ombudsman so that they can easily be approachable by the aggrieved bank customer.

in/Scripts/PublicationsView.rbi.aspx?id=11113#2 http://www.htm http://www.org.htm 73 .com/ombudsman.pdf http://www.indbank.in/Scripts/bs_viewcontent.BIBLOGRAPHY http://www.org.rbi.org/Secbuscour/25.ucobank.nos.aspx?Id=159 http://www.com/ombudsman.

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