Banking Ombudsman Scheme and Features

Banking Ombudsman Scheme: The Banking Ombudsman was first introduced in 1949 under section 35A of the Banking Act. Candidates who want to work in the financial and banking sector must thoroughly know the bank's authorization system.

Banking Ombudsman Scheme

• Insurance Ombudsman
• Income Tax Ombudsman
• Banking Ombudsman

RBI Integrated Ombudsman Scheme (RB-IOS)

• RB-IOS combines three ombudsman systems: RBI Banking Ombudsman System since 2006, Ombudsman System for NBFCs 2018 and Ombudsman System of Digital Transmissions 2019.
• The purpose of the combined ombudsman system is to provide remedial services related to customer complaints. RBI regulated units viz. Banks, NBFCs (Non-Banking Financial Companies) and prepaid instrument players if the complaint is not resolved to the satisfaction of the customers or if the regulated entity does not respond within 30 days.
• This includes non-regular primary co-operative banks with deposits of Rs 50 crore or more. The integrated system makes the "One Nation, One Ombudsman" approach and jurisdiction neutral.

Features of Banking Ombudsman Scheme

• The system defines "no service" as the basis of the complaint with a list of defined exclusions. Therefore, complaints would no longer be rejected simply because they "do not belong to the reasons listed in the system".
• The system is jurisdiction neutral and a centralized reception and processing center is set up at Chandigarh for initial handling of complaints in any language.
• The RBI has made a provision to use artificial intelligence tools so that banks and research institutions can coordinate better and as quickly as possible.
• Bank customers can file complaints, send documents, track their status and give feedback through a single email address. There is also a multilingual toll-free number that provides all the necessary information to resolve complaints.
• A regulated entity has no right of appeal in cases where the Ombudsman has made a decision against it for failure to provide satisfactory and timely information.
• Under the integrated system, the appellate authority would be the Director, Consumer Education and Consumer Protection Department, RBI.
• This will help improve the grievance mechanism for redressal of customer grievances against RBI regulated entities. It is expected to deliver uniformity and smoother usability mechanisms that will add value to the system and bring joy and financial inclusion to customers.

Grounds on which a Complaint can be filed

• The Reserve Bank of India imposes rules and regulations on the business and banking sector and RBI has also filed several complaints.
• Forcible or illegal closing of the customer's deposit accounts without notice or reasonable special reason.
• Banks reject any loan application without a valid or justified reason.
• Refusal to open new deposit accounts for the consumer without a specific reason.
• The consumer pays any fee or charge that the bank is not allowed to charge.
• Non-compliance with Reserve Bank of India guidelines regarding services like credit cards, debit cards and other ATM related matters.

How to Register Complaint?

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