The Banking Ombudsman is a quasijudicial

authority formed with the aim to address and

resolve complaints of the Bank's customers. The
Section 35A of the Banking Regulation Act of 1949
deals with the Banking Ombudsman Scheme.
Finance andbanking aspirants are required to have
an understanding of the Banking Ombudsman
scheme for the exam as well as practical purposes.

o The Banking Ombudsman Scheme was

announced by the Reserve Bank of India (RBI)
in 2006.
o The scheme not only covers the scheduled
commercial banks but also regional rural
banks and scheduled primary cooperative
banks.
o Recently, the RBI extended the Banking
Ombudsman concept tothe NBFC (Non
Banking Financial Institutions) as well.
Banking Ombudsman - Important
Facts

The Banking Ombudsmanconcept was

announced by the Reserve Bank of India in
2006. It was later revised and amended in
2007 and 2009 to provide this office a wider
role in the field of customer complaints and to
adjudicate disputes. It came into existence on
01st January 2006.
The Banking Ombudsman Scheme of 2006 is
applicable to all the commercial, regional rural,
and scheduled primary cooperative banks
across the country.
o Any executive of the rank of General Manager
or the Chief General Manager or other suitable
authority iseligible to be appointed as the
Banking Ombudsman.
o The period of office of an Ombudsman is 3
years.
oIt is aservice without any fees or charges.
Powers of Banking Ombudsman
The banking ombudsman is vested with the
following powers:

Callany additional information from the bank

against which any complaint has been filed or
any other bank concerned withthe complaint
oCall for certified copies of any document
relating to the complaint
Maintaining confidentiality of any information
or document that they may receive
Nature of the proceedings before Banking
Ombudsman is "summary in nature"
Appellate Authority in the Scheme of Banking
Ombudsman is Deputy Governor - in-charge of
the Department of the RBI which is
implementing the scheme.
What are the Grounds of Complaints?
Common grounds of inapt services in banking that
can be entertained under the banking Ombudsman
scheme include the following:

Non-payment or inordinate delay of payment

and collection of bills, cheques, etc.
oRefusal to open adeposit account or close the
account or delay in closing the accounts
without a valid reason for any such delay or
refusal.
Non-acceptance of small denominations of
notes and coins without a valid reason.
o Failure to follow the BCSBI (Banking Codes &
Standard Board of India) guidelines and
indulging in unfair practices.
oNon-adherence to follow the prescribed hours
of serviceability.
o Failure to issue or delay in issue of drafts, pay
orders,or banker's cheques, etc.
How to File a Complaint?
o Complaints should be filed in writing and
signed by the complainant or his/ her
authorized representative stating clearly their
name and address.
oIt should also have the complete name and
address of the bank's branch or office against
which the complaint is being filed.
oAlong with the complaint, the complainant
should also provide facts of the case,
documentary proof, if any, nature and extent of
loss, and the relief sought.
Which Complaints are Rejected?
The Banking Ombudsman can reject any complaint
in case of:

The complaint is frivolous with inappropriate

intentions
The complaint is without sufficient cause or
beyond the pecuniary jurisdiction as per Clause
12 (5)
oThe Complaint is not pursued by the
complainant with reasonable diligence
There is no loss, damage, or inconvenience
caused to the complainant in the opinion of the
banking ombudsman
 Asan Arbitrator
The banking ombudsman performs the following
roles as an arbitrator:

Any dispute between the bank and the

customer of the bank or maybe amongst the
banks is received by the Banking Ombudsman
for arbitration.
The ombudsman assumes the arbitrator role
once the dispute is referred to him by the
parties and gets the consent of the parties to
do sothrough a duly stamped and notarized
affidavit of understanding.
Atany stage after assuming the charge of
arbitrator, if the ombudsman feels he is not
able to perform his given role independently, he
can refuse to continue to be an arbitrator
o The banking ombudsman follows allthe rules
and guidelines as per the Arbitration &
Conciliation Act, 1996