A STUDY ON BANKING OMBUDSMAN SCHEME WITH SPECIAL REFERENCE TO AXIS BANK

Submitted in partial fulfillment of the requirement of Auxilium college (Autonomous) for the award of the

MASTER DEGREE In COMMERCE

Submitted By B.SWAPNA (REG. NO. ECO10836)

Under the guidance of Dr. N. FATHIMA THABASSUM ASSISTANT PROFESSOR

DEPARTMENT OF COMMERCE AUXILIUM COLLEGE, (Autonomous) (Re-Accredited by NAAC with A Grade with a CGPAof3.41outof4) Vellore 632006 2011 2012

DEPARTMENT OF COMMERCE AUXILIUMCOLLEGE, (Autonomous) (Re- Accredited by NAAC with A Grade with a CGPA OF 3.41 out 4) Vellore-632006 (CERTIFICATE) This is to certify that this project report entitled A STUDY ON BANKING OMBUDSMAN SCHEME WITH SPECIAL REFERENCE TO AXIS BANK being submitted to AUXILIUM COLLEGE (Autonomous), Vellore by B. SWAPNA, Register No: ECO10836 For the award of the Masters Degree in Commerce is a bonafide record of work carried out by her, under our guidance and supervision.

Ms. AUXILIA ROZARIO Head of Assistant .professor Department of commerce (SHIFT II) Auxilium College, Gandhi nagar, Vellore - 632006.

Dr. N. Fathimathabasum Assistant. Professor Department of commerce (SHIFT II) Auxilium College, Gandhi nagar, Vellore - 632006.

Submitted for the Viva-voce Examination

Examiners: 1. 2.

DECLARATION
I hereby declare that the project work entitled A STUDY ON BANKING OMBUDSMAN SCHEME WITH SPECIAL REFERENCE TO AXIS BANK carried out in partial fulfillment of the master of commerce degree course of Auxilium College (Autonomous) in my original work.

Place: Vellore Date: March 2012 B.SWAPNA

ACKNOWLEDGEMENT
I thank God, the Almighty who is the author of all inspiration. I extend my sincere thanks to Auxilium College for giving me an opportunity to undertake this project for the Master Degree in Commerce. I would like to thank our respected principal Rev. Sr. Dr.

EUGINI FATHIMA MARY. L. M.A., Ph.D., L.S.G. for giving us the inspiration and moral support to complete our project work. I express my deep sense of gratitude to Mrs. Auxilia Rozario M.com. M.Phil, Ph.D., Head in charge, Department of Commerce (shift II), for motivating and inspiring me to complete this project work. I express my sincere gratitude to my respectable guide Dr. N.Fathima Thabassum M.Com., M.Phil, MBA., Ph.D., Assistant Professor, Auxilium College. I express my faithful gratitude to my loving Parents Mr. S. BOSE AND Mrs. B. VIJAYA and my beloved Sisters for their help and support with which I could purse my research without any difficulty. I would also like to thank my friends for their help, moral support and motivation. Finally, I wish to express my thanks to the entire end-users who extended their kind help and co-operation in completing my project work successfully. B. SWAPNA

CONTENTS CHAPTER NO I INTRODUTION 1.1. Introduction 1 2 3 4 4 5 6 7 18 PARTICULARS PAGE NO

1.2 Characteristics of Banking Ombudsman 1.3 Need for the study 1.4. Objectives of the study 1.5. Research Methodology 1.6. Limitations of the study 1.7. Chapterisation II III BANKING OMBUDSMAN SCHEME CASE STUDIES IN BANKING COMPLAINTS AND REDRESSAL IV PROFILE OF AXIS BANK

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DATA

ANALYSIS

AND 32

INTERPRETATION-I:

performance of

Banking Ombudsman in Indian banking Sector VI DATA ANALYSIS AND INTERPRETATION-II: performance of Banking Ombudsman in AXIS Bank VII FINDINGS AND CONCLUSIONS BIBLIOGRAPHY APPENDEX 60 54

LIST OF TABLE SI. NO 5.1 5.2 5.3 5.4 5.5 TITLE RECEIPTS OF COMPLAINTS BO OFFICE WISE RECEIPT OF COMPLAINTS REGION WISE RECEIPT OF COMPLAINTS MODE WISE RECEIPT OF COMPLAINTS BANK GROUP WISE RECEIPT OF
COMPLAINTS

PAGE NO. 32 34 36 38 40

5.6 5.7 5.8 5.9 5.10 5.11

CATEGORY WISE RECEIPT OF COMPLAINTS DISPOSAL OF COMPLAINTS BY BO OFFICE MODE OF DISPOSAL OF COMPLAINTS DISPOSAL OF MAINTAINABLE COMPLAINTS REJECTED COMPLAINS PENDING POSITION OF COMPLAINTS AT BO
OFFICES

42 44 46 48 49 51

5.12 5.13

COST RUNNING THE SCHEME DISPOSAL OF COMPLAINTS BANKING

OMBUDSMAN

52 53

6.1 6.2 6.3

CUSTOMER COMPLAINTS

OF AXIS BANK

55 57 59

DISPOSAL OF COMPLAINTS AXIS BANK DISPOSAL OF COMPLAINTS AXIS BANK

List of Charts

CHART NO 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 6.1 6.2 6.3

TITLE RECEIPTS OF COMPLAINTS REGION WISE RECEIPT OF COMPLAINTS MODE WISE RECEIPT OF COMPLAINTS BANK
GROUP COMPLAINTS WISE RECEIPT OF OF

PAGE NO. 33 36 38 41 43 44 46 48 50

CATEGORY

WISE

RECEIPT

COMPLAINTS DISPOSAL OF COMPLAINTS BY BO OFFICE

MODE OF DISPOSAL OF COMPLAINTS DISPOSAL

COMPLAINTS OF MAINTAINABLE

REJECTED COMPLAINS

PENDING POSITION OF COMPLAINTS AT 51 BO OFFICES DISPOSAL OF COMPLAINTS BANKING 53

OMBUDSMAN

CUSTOMERS

OF COMPLAINTS AXIS BANK

55 58 59

DISPOSAL OF COMPLAINTS AXIS BANK DISPOSAL OF COMPLAINTS AXIS BANK

CHAPTER I INTRODUCTION AND DESIGN OF THE STUDY

1.1.

Introduction

In the present banking system, excellence in customer service is the most important tool for sustained business growth. Customer complaints are part of the business life of any corporate entity. This is more so for banks because they are service organizations. Over a period of time, the number of complaints against banks with regard to deficiency of their services has been in spite of several efforts taken by the banks on the advice of the Reserve Bank of India. Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme has been introduced under Section 35A of the Banking Regulation Act, 1949 by the Reserve Bank of India with effect from 1995. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme and the Banking Ombudsman can receive and consider any complaint relating to deficiency in banking services. One can file a complaint before the Banking Ombudsman if a reply is not received from the bank within a period of one month after the bank concerned has received one's representation, or the bank rejects the complaint, or if the complainant is not satisfied with the reply given by the bank.

If one is not satisfied with the decision passed by the Banking Ombudsman, one can approach the appellate authority against the Banking Ombudsmen's decision. Appellate authority is vested with a Deputy Governor of the RBI.

1.2. CHARACTERISTICS OF BANKING OMBUDSMAN The Banking Ombudsman is a quasi judicial authority. It has power to summon both the parties -bank and its customer, to facilitate resolution of complaint through mediation. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme. The Banking Ombudsman has power to consider complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank-related matters. The Banking Ombudsman does not charge any fee for resolving customers complaints. Complaint can be made before a Banking Ombudsman on the same subject matter for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or award or a final order, has already been passed by any such competent court, tribunal, arbitrator or forum.

1.3. Need for the study

In the present scenario of competitive banking, excellence in customer service is the most important tool for sustained business growth. Customer service has been the challenging job in the banking industry, specifically, after the financial sector reforms and implementation of new age technology. Providing prompt and efficient service is on the top agenda of commercial banks to attract and retain the new customers. Making banks more customer-friendly has also been high on the agenda of the Reserve Bank of India. It is the result of RBIs initiatives that today all commercial banks have their own grievance redressal cells to handle the grievances of their customers. However, sometimes, customers complaints are not handled properly by banks, which may result in dissatisfaction to the customers. At this point of time customer is in a dilemma about where to file a complaint against the deficiency in services rendered by the banks. Courts may not be the right choice because of long time involved in settling of cases and heavy costs. Here, Reserve Bank of India has provided an alternative mechanism to handle the customers grievances by setting up of Bank Ombudsman in India. Keeping in mind these two important aspects of Bank Ombudsman the present study has been designed i) to study the mechanism and operations of Bank Ombudsman in India and ii) to evaluate the performance of bank ombudsman

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1.4. Objectives of the study: To trace the historical perspective of Banking Ombudsman Scheme. To highlight the functional aspect of Banking Ombudsman Scheme and To bring forth the performance of Banking Ombudsman Scheme in terms of quantum of complaints handled and time taken for redressal in all scheduled commercial banks To study the performance of Banking Ombudsman in terms of quantum of complaints handled and time taken for redressal in AXIS Bank.

1.5. Research Methodology:

The present study is based on secondary data. The secondary data were collected from articles, previous studies, committee reports, Indian Banks Association Bulletin (IBI) bulletins, RBI India website and from data relating to the banks. The present study is confined to three years i.e., from 2007-2008, 2008-2009 and 2009-2010.

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Tools applied for Data Analysis:

Trend Analysis is used to find out the increase/decrease from the previous year Karl Pearsons co-efficient of Correlation is used to find out the relationship between the number of complaints handled and number of cases disposed in scheduled commercial banks on the whole and particularly at AXIS Bank.

1.6. Limitations and scope of the study:

1. The study is confined to the period of three years. 2. Only complaints arrived and redressed in the overall commercial banking sector and one New Private Sector bank namely, AXIS bank is taken for the study. 3. The trend percentage and correlation alone is found out to know the performance of Ombudsman

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1.7. Chapter Scheme CHAPTER 1 deals with the Introduction, characteristics of Banking Ombudsman, Objectives, methodology, scope and limitations of the study.

CHAPTER 2 explores on the basic concepts of banking Ombudsman Scheme.

CHAPTER 3 discusses about the Case studies of banking Ombudsman Scheme

CHAPTER 4 studies about the Profile of AXIS Bank.

CHAPTER 5 analyses the performance of Banking Ombudsman in Indian banking Sector

CHAPTER 6 analyses the performance of Banking Ombudsman Axis bank

in

CHAPTER 7 offers a summary of findings and suggestions.

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CHAPTER II BANKING OMBUDSMAN SCHEME

The institution of banking offers opportunity for investors and channelizes the resources available for the growth and sustenance of trade, commerce and industry, and, hence, an efficient banking system is necessary for the growth of the national economy. It is necessary that in such a system checks and balances be introduced to reduce inefficiency and maladministration. Moreover, the quality of the service of the banks depends upon the service provided to the customers and same determines the reputation and growth of the bank. Banking being public utility services and in view of the deteriorating services rendered to the public and also having regard to the fact that services so rendered by banks in irresponsible manner, which are not only inefficient but deficient in character and in the said stress and strain, the public/customer is put pillar to post without having any remedy, it felt necessary to have a separate for a to receive and resolve such grievances. Of course, the Consumer Protection Act, 1986 or courts, has taken care of it but as of now consumer forum is hard pressed with the alarming rise in number of cases. In the banking sector, so far consumer or customer are concerned, their grievances are many and varied. Reserve Bank of India (RBI) is flooded with complaints. They received complaint and forward the complaint to concerned bank and banks are required to submit comment and confirm that grievance of the customers stand redressed. Whether it is redressed or not, paper transactions take place. Banking sector is constantly under
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criticism by press, public and estimate committees. Various committees, commissions and working group were formed to go into the issue since 1972. Banking Commission was headed by Sri R. G. Saraiya followed by Sri. R. K. Talwar which made as much as 172 recommendations and lastly report of the Goiporia Committee is a step further as to the sustained anxiety of RBI towards improvement of customer services in banks. Banks have implemented the recommendations to greater extent still there is no perceptible change in the quality of customer services and still the deficient areas are palpably visible and the customer remain dissatisfied. The NarasimhanCommittee on Banking and Financial Sector Reforms examined these critical areas and recommended introduction of the Banking Ombudsman Scheme 1995 as a part of Financial Sector Policy and Systems Reforms 1991-92 to 1995-96. Recommendations are very much significant and certainly, it was a needed requirement. This is timely in the changing needs of the customers, in the context of growing liberalization in the banking and financial sectors along with the growing awareness amongst customers, of their rights. On this background RBI has accepted the recommendation and as a part of banking policy, Dr. C. Rangarajan; Governor, announced the The Banking Ombudsman Scheme on June 14, 1995. The scheme was issued under the provision of Banking Regulation Act, 1949, covers all Scheduled Commercial Banks and the Scheduled Primary Cooperative Banks having business in India. The Scheme has become operative from June 1995. Initially Ombudsman was appointed on full time basis in three centers i.e. Mumbai, New Delhi, and Bhopal but subsequently its base for operation has been expanded. The aim and objective mechanism of ombudsman is to deliver quick and inexpensive facility to resolve grievances of customers arising out of deficient services rendered by the banks. Hence, banking ombudsman is in place to
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cater to public complaints against deficiency in banking services concerning operation of deposit accounts and loans and advances. Paradigm Shift of Banking Ombudsman Scheme 1995 to Banking Ombudsman Scheme of 2006; the attempt over years has been to extend the scope and jurisdiction of the Banking ombudsman to hitherto uncovered areas.

This has been done in two ways:

1. Coverage of banks: under the 1995 Scheme, only commercial banks and Scheduled Primary Co-operative Banks, having a place of business in India, were covered. Then 2002 Scheme broadened the operation of the ombudsman by including within the definition of bank such entities as Regional Rural Banks, State Bank of India, and subsidiary bank as defined in Part I of the Banking Regulation Act, 1949. Even the Scheduled Commercial banks are covered under the latest scheme of 2006.

2. Entertainment of Complaints: the Ombudsman Scheme lays down the grounds on which complaints can be entertained by the Ombudsman. The trend over the year has been to extend the jurisdiction of ombudsman. The RBI has expanded the scope of the banking ombudsman to include customer complaints relating to credit cards, deficiencies on the part of sales agents of banks to provide promised services, levying service charges without prior notice to the customer and non-adherence to the fair practices code as adopted by individual banks.

In order to make the scheme more effective, the RBI has decided to take the onus of recruitment and funding of the scheme. It has also allowed
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complainants to file their complaints online and appeal to it against the judgments given by the banking ombudsman. The Banking Ombudsman Scheme, 1995 was notified by RBI on June 14, 1995 in terms of the powers conferred on the Bank by Section 35A of the Banking Regulation Act, 1949 (10 of 1949) to provide for a system of redressal of grievances against banks. The Scheme sought to establish a system of expeditious and in expensive resolution of customer complaints. The Scheme which is in operation since 1995 has been revised during the year 2002 and 2006. The Scheme is being execute and administered by Banking Ombudsmen appointed by RBI at 15 centers covering the entire country. Banking Ombudsman Scheme, 2006

Scope of the Scheme. In 2006, the Reserve Bank of India announced the revised Banking Ombudsman Scheme with enlarged scope that included customer complaints on certain new areas, such as, credit card complaints, deficiencies in providing the promised services even by banks' sales agents, levying service charges without prior notice to the customer and non adherence to the fair practices code as adopted by individual banks. Vision of banking Ombudsman Scheme

To be a visible and credible system of dispute resolution mechanism for common persons utilizing banking services.

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Goals of banking Ombudsman Scheme

To ensure redressal of grievances of users of banking services in an inexpensive, expeditious and fair manner that will provide impetus to improved customer services in the banking sector on a continuous basis.

To provide feedback/suggestions to Reserve Bank of India towards framing appropriate and timely guidelines to banks to improve the level of customer service and to strengthen their internal grievance redressal systems

To enhance the awareness of the Banking Ombudsman Scheme. To facilitate quick and fair (non-discriminatory) redressal of grievances through use of IT systems, comprehensive and easily accessible database and enhanced capabilities of staff through training.

APPOINTMENT AND TENURE OF BANK OMBUDSMAN Under the 2006 Scheme, it is stipulated that the RBI may appoint one or more officers in the rank of Chief General Manager or Manager to be known as Banking Ombudsman to carry out the functions entrusted to them by or under the scheme. This appointment is made for the period not exceeding three years. For effective implementation of this scheme Reserve Bank of India has set up fifteen Bank ombudsman offices across the country. Application of the Scheme. The scheme is applicable to all commercial banks, regional rural banks and scheduled primary cooperative banks having business in India.

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Funding Unlike the old scheme, the revised Banking Ombudsman Scheme is fully staffed and funded by the Reserve Bank instead of the banks. Filing complaints. Under the revised Banking Ombudsman Scheme, the complainants can file their complaints in any form, including online.

GROUNDS OF COMPLAINT 1. A complaint on any one of the following grounds alleging deficiency in banking service may be filed with the Banking Ombudsman having the jurisdiction: 1. non-payment/inordinate delay in the payment or collection of cheques, drafts, bills etc.; 2. non-acceptance, without sufficient cause, of small

denomination notes tendered for any purpose, and for charging of commission in respect thereof; 3. non-issue of drafts to customers and others; 4. non-adherence to prescribed working hours by branches; 5. failure to honor guarantee/letter of credit commitments by banks; 6. claims in respect of unauthorised or fraudulent withdrawals from deposit accounts, or fraudulent encashment of a cheques or a bank draft etc., 7. complaints pertaining to the operations in any savings, current or any other account maintained with a bank, such as
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delays, non-credit of proceeds to parties' accounts, nonpayment of deposit or non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits. 8. complaints from exporters in India such as delays in receipt of export proceeds, handling of export bills, collection of bills etc., provided the said complaints pertain to the bank's operations in India; 9. Complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank-related matters. 10.Complaints pertaining to refusal to open deposit accounts without any valid reason for refusal and 11.Any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking service.

PROCEDURE OF FILING COMPLAINT 1. Any person who has a grievance against a bank relating to the banking services as enumerated under Clause 12 of the Scheme, may himself or through his authorized representative make a complaint to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located. 2. The complaint shall be in writing duly signed by the complainant or his authorised representative (other than an advocate) in a form specified in Annexure-A of the Scheme and shall state clearly the name and address of the complainant, the name and address of the branch or office of the bank against which the complaint is made, the facts giving rise to the complaint supported by documents, if any, that are desired to be
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relied upon by the complainant, the nature and extent of the loss caused to the complainant, the relief sought from the Banking Ombudsman and a declaration about the compliance of the conditions referred to in sub-clause (3) of this clause. 3. No complaint to the Banking Ombudsman shall lie unless:(a) the complainant had before making a complaint to the Banking Ombudsman made a written representation to the bank named in the complaint and either the bank had rejected the complaint or the complainant had not received any reply within a period of one month after the bank concerned received his representation or the complainant is not satisfied with the reply given to him by the bank. (b) the complaint is made not later than one year after the cause of action has arisen as per clause (a) above; (c) the complaint is not in respect of the same subject matter which was settled through the Office of the Banking Ombudsman in any previous proceedings whether or not received from the same complainant or along with any one or more complainants or any one or more of the parties concerned with the subject matter; (d) the complaint does not pertain to the same subject matter, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or a final order has already been passed by any such competent court, tribunal, arbitrator or forum; and (e) the complaint is not frivolous or vexatious in nature.
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REJECTION OF COMPLAINT

The Banking Ombudsman may reject a complaint at any stage if it appears to him that a complaint made to him is: i) frivolous, vexatious, mala fide or without any sufficient cause or ii) that it is not pursued by the complainant with reasonable diligence or iii) in the opinion of Banking Ombudsman there is no loss or damage or inconvenience caused to the complainant or iv) beyond the pecuniary jurisdiction of Banking Ombudsman or v) in the opinion of the Banking Ombudsman the complicated nature of the complaint requires consideration of elaborate documentary and oral evidence and the proceedings before him are not appropriate for adjudication of such complaint.

SETTLEMENT OF DISPUTES

On the receipt of a complaint, the first objective of the ombudsman is to promote a settlement of the complaint by agreement between the complainant and the bank through conciliation or mediation. If the complaint is not settled by agreement within a period of one month from the date of the receipt of the complaint, the Ombudsman shall pass an award after giving the reasonable opportunity to the parties for presenting their case. In passing the award, the ombudsman shall be guided by the documentary evidence placed before him by the parties, the principle of banking law and practice, directions issued by the RBI etc.

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The award passed shall contain the direction/s, if any, to the bank for specific performance of its obligations and in addition to or otherwise, the amount, if any, to be paid by the bank to the complainant by way of compensation for any loss suffered by the complainant, arising directly out of the act or omission of the bank. After an award is passed, its copy is sent to the complainant and the bank named in the complaint. It is open to the complainant to accept the award in full and final settlement of his complaint or to reject it. If the award is acceptable to the complainant, he is required to send to the bank concerned, a letter of acceptance of the award in full and final settlement of his complaint, within a period of 15 days from the date of receipt of the copy of the award by him.

The Banking Ombudsman shall not have the power to pass an award directing payment of an amount which is more than the actual loss suffered by the complainant as a direct consequence of the act of omission or commission of the bank, or ten lakh rupees whichever is lower. However, in the case of complaints, arising out of credit card operations, the Banking Ombudsman may also award compensation not exceeding Rs. 1 lakh to the complainant, taking into account the loss of the complainant's time, expenses incurred by the complainant, harassment and mental anguish suffered by the complainant.

APPEAL

BEFORE

THE

APPELLATE

AUTHORITY

AND

REVIEW OF THE AWARD The 1995 scheme had no provision for the review of the ombudsmans award. However, under the 2002 scheme, a Review Authority was established. The appellate authority is the Deputy Governor in the Reserve Bank of India. Either party aggrieved by the award may, within
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45 days of the date of receipt of the award, appeal against the award before the appellate authority. The appellate authority may, if he is satisfied that the applicant had sufficient cause for notmaking an application for appeal within time, also allow a further period not exceeding 30 days. The Appellate Authority , after giving the parties a reasonable opportunity of being heard may i) dismiss the appeal; or ii) allow the appeal and set aside the award; or iii) send the matter to the Banking Ombudsman for fresh disposal in accordance with such directions as the appellate authority may consider necessary or proper; or iv) modify the award and pass such directions as maybe necessary to give effect to the modified award; or v) pass any other order as it may deem fit.

AWARENESS OF THE SCHEME For greater awareness of the scheme it is now mandatory for the banks to ensure that the purpose of the scheme and the contact details of the Banking Ombudsman to whom the complaints are to be made by the aggrieved party should be displayed prominently in all the offices and branches of the bank in such a manner that a person visiting the office or branch has adequate information of the

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CHAPTER III CASE STUDIES IN BANKING COMPLAINTS AND REDRESSAL

The AGM, State Bank of India, Pondicherry & Ors V/s N.Ganesan The complainants son remitted an amount on 5.04.1997 from abroad to be credited to his NRI account with appellant bank. The remittance was not confirmed till 22.04. 1997. Appellant bank pleaded that nonconfirmation was due to failure of computers. The issue is whether this belay on the part of the bank amounted to deficiency in service. The Commission in appeal observed that bank officials could have verified vouchers and cheques received by post or confirmation and could have given correct reply within a reasonable time. It was held that failure of the bank to confirm remittance received from outside country within a reasonable period amounts to deficiency in service.

J. Shah Corporation Bank & Anr V/s Navin Respondent, who is an exporter under discounting agreement entrusted documents relating to export and bills of exchange with appellant bank to negotiate the same through a foreign bank. Respondents allegation is that the bank had failed to collect money in foreign currency indicated in documents but instead collected in local currency, hence there was deficiency in service on the part of the appellant bank and hence a claim for damages was made. In appeal, the Commission held that there was no deficiency of service on the part of the bank as the appellant bank, acting for an on behalf of the respondent, had negotiated the documents as provided under agreement. However the
25

conversion of local currency in U.S. $ became difficult on account of policy of Sudan Government. It was observed that all that was required to be done under terms of the agreement and under contract had been done by the two banks.

Anthony C. Vaz V/s M/s Himachal Futuristic Communication Ltd & Anr Dividend warrants were issued by respondent No.1 and were sought to be encased by respondent No.2, Banker at Panaji. The appellant filed a complaint before the District Forum as the warrants were returned unpaid with the remarks No advice despite a letter dispatched to them by Industrial Financial Branch of SBI, Chandigarh. Respondent No.2 took the defense that they cannot honor dividend warrants unless they received intimation from local Head Office at Mumbai. The State Commission however held that refusal to clear the dividend warrant was deficiency in service as question of respondent No.2 having no authority to honor the warrants could not arise in view of the letter from Industrial Financial Branch of SBI, Chandigarh. Respondent No. 2 and Respondent No. 1 were held to be jointly liable

Brijesh Kumar & A.R.Lakshmanan Vs. Canara Bank & anr The Bank charging, unilaterally without prior information or consent of the Bank Customer, for providing their services by supply of MICR Cheque. Consumer Forum and State Commission held it as deficiency of service but National Commission held that it was related to pricing and not in jurisdiction of the Consumer Fora to decide. The Supreme Court held that the charge by bank for issuance of MICR cheques is not against the directives of the Reserve Bank of India. The questions of it being unilateral or with the consent of each customer do not arise.

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India Export Corporation & ors Vs. Chairman-cum-MD, Syndicate Bank&Bors The complainant withdrew overdraft facility sanctioned to him by the bank only after availing facility to the extent of Rs.1,20,000/-. The facility was availed by the complainant for business purpose. It was held that where complaint alleging banking service deficiency was found connected with commercial purpose, the consumer complaint would not be maintainable.

Col. D.S.Sachar Vs. Zonal Manager, Punjab & Sind Bank, Cahndigarh & anr Cashwas snatched from the hands of the

complainant/appellant at the gate of the respondent bank. The appellant alleges that the absence of security on the gate and the non-provision of steps like siren/alarm system etc. amounts to deficiency in service on the part of the respondent bank. The State Commission held that the nonprovision of security on the gate of the bank on the date of occurrence viz. snatching of cash in bank premises cannot be held to be amounting to deficiency in service hired by compel

Ratanchand Morarkar Vs. Bank of Maharashtra The complainant had deposited amount for issue of pay order in favor of a particular firm. However, the said pay order was cancelled by the bank and was issued in favor of another party. It was held that when the bank has acted in good faith in cancellation of bank pay order and issuance of fresh pay order in favour of another party on the request made by Manager of the complainant firm, there would be no deficiency in service.

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Manohar Singh Chouhan & Ors Vs. Central Bank of India The complainants have purchased a tractor after taking loan from the respondent bank. The respondent bank did not remit the premium amount to the insurance company with which the complainants have insured their tractor as a result of which the suffered when the tractor met within accident could not be recovered from the Insurance Company.

The issue for consideration is whether non-payment of premium amount by the bank amounted to deficiency in service. It was held that when hire purchase agreement between the bank and buyer of vehicle with the help of bank loan did not contain a condition creating obligation on the part of the bank to remit premium for insurance policy, complainant buyer of vehicle could not hold bank guilty of deficiency in service.

Balla Rama Rao v. Banking Ombudsman, 2003. A house in the name of B. Narayanama was given on lease to the bank in 1982.Subsequently, the lady died. The Bank did not pay rent from June 1992 to Feb. 1997.Balla Ramarao, the appellant approached the bank. Bank immediately paid the amounts. 3, 09,562. Balla contended that the interest should also be paid for the period of 1992to 1997. The bank refused to pay interest. The appellant approached to the banking ombudsman. But he rejected the complaint, holding no merit in the case as it was outside the jurisdiction of the banking ombudsman. Balla approached to the Andhra Pradesh high court. The high court rejected the appeal, finding that it was outside the jurisdiction of the banking ombudsman.

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M/s.Anand Lubricating & Pneumatic Systems Ltd. Vs. State Bank of India The bank was alleged to have failed to issue bank guarantee despite sufficient security and the complainant suffered financial loss. It was held that the non-issuance of bank guarantee despite security deposit with the bank would amount to deficiency in service and the complainant would be entitled to interest on that security amount.

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CHAPTER IV PROFILE OF AXIS BANK

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporate, SME, Agriculture and Retail Businesses.

With its 1446 branches (including extension counters) and 7,594 ATMs across the country, as on 30th September 2011, the network of Axis Bank spreads across 953 cities and towns, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Bank also has overseas offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai and Abu Dhabi. The Bank's website www.axisbank.com offers comprehensive details about its products and services. For further information please contact Mr. V Srinivasan, Executive Director (Corporate Banking) Axis Bank said at the Awards ceremony, Despite a difficult economic landscape, India is amongst the fastest growing economies of the world. Infrastructure sector has remained one of the key drivers of economic growth. The D&B Axis Bank Infra Awards 2011 is our attempt to recognize the illustrious projects and honor corporate who have been leading infrastructure development in the country. He went on to add, The XIth five year plan estimates 43% of total debt requirement (Rs. 4.20 lakh cores) in infrastructure financing to be raised from banks. We see huge growth potential in the sector. Axis Bank has been one of the leading arrangers of the infrastructure finance and we would continue to partner in the sectors growth.
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History of axis bank

Axis Bank was formed as UTI when it was incorporated in 1994 when Government of India allowed private players in the banking sector. The bank was sponsored together by the administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation of India (LIC) and General Insurance Corporation ltd. and its subsidiaries namely National insurance company ltd., the New India Assurance Company, the Oriental Insurance Corporation and United Insurance Company Ltd. However, the name of UTI was changed because of the disagreement on terms and conditions of the bank authority over certain stipulations including royalty charged over the name from UTI AMC. The bank also wanted to have a new name from its pan-Indian as well as international business perspective. So from July 30, 2007 onwards the UTI bank was named as Axis Bank. AXIS Bank is one of the fastest growing banks in private sector. The Bank operates in four segments, namely treasury, retail banking, corporate/ wholesale banking and other banking business. The treasury operations include investments in sovereign and corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange operations on the account, and for customers and central funding. Retail banking includes lending to individuals/ small businesses subject to the orientation, product and granularity criterion. It also includes liability products, card services, Internet banking, automated teller machines (ATM) services, depository, financial advisory services, and nonresident Indian (NRI) services. The corporate/ wholesale banking segment includes corporate relationships not included under retail
31

banking, corporate advisory services, placements and syndication, management of publics issue, project appraisals, capital market related services, and cash management services. The Bank's registered office is located at Ahmedabed and their Central Office is located at Mumbai. The Bank has a very wide network of more than 1042 branches (including 56 Service Branches/ CPCs as on June 30, 2010). The Bank has a network of over 4,474 ATMs providing 24 hrs a day banking convenience to their customers. This is one of the largest ATM networks in the country. The Bank has five wholly-owned subsidiaries namely Axis Securities and Sales Ltd, Axis Private Equity Ltd, Axis Trustee Services Ltd, Axis Asset Management Company Ltd and Axis Mutual Fund Trustee Ltd. Axis Bank was incorporated in the year 1993 with the name UTI Bank Ltd. The Bank was the first private banks to have begun operations after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd, The New India Assurance Company Ltd, The Oriental Insurance Company Ltd and United India Insurance Company Ltd. In the year 2001, the bank along with Global Trust Bank (GTB) had a merger proposal to create the largest private sector bank, but due to media's issues both the banks withdraw the merger proposal. In the year 2003, the Bank was given the authorized to handle Government transactions such as collection of Government taxes, to handle the expenditure related payments of Central Government Ministries and Departments and pension payments on behalf of Civil and Non-civil Ministries such as defense, posts, telecom and railways. In December 20003, the Bank launched their merchant acquiring business. In the year 2005, the Bank
32

raised $239.3 million through Global Depositary Receipts. They won the award 'Outstanding Achievement Award' for the year 2005 from Indian Banks Association for IT Infrastructure, delivery capabilities and innovative solutions. In December 2005, the Bank set up Axis Securities and Sales Ltd (originally incorporated as UBL Sales Ltd) to market credit cards and retail asset products. In October 2006, they set up Axis Private Equity Ltd, primarily to carry on the activities of managing equity investments and provide venture capital support to businesses. In the year of 2007, the bank again raised $218.67 million through Global Depository Receipts. They opened 153 new branches during the year, which includes 43 extension counters that have been upgraded to branches and 8 Service branches/ CPCs. They also opened new overseas offices at Singapore, Dubai and Hong Kong and a representative office in Shanghai. During the year 2007-08, the Bank opened 143 new branches, taking the number of branches to 651 which included 33 extensions Counters that have been upgraded to branches. Also, they expanded overseas with the opening of a branch at the Dubai International Finance Centre. The Bank changed their name from UTI Bank Ltd to Axis Bank Ltd with effect from July 30, 2007 to avoid confusion with other unrelated entities with similar name. During the year 2008-09, the Bank opened 176 new branches that include 12 extension counters that have been upgraded to branches taking the total number of branches and ECs to 835. During the year, they opened 831 ATMs, thereby taking the ATM network of the Bank from 2,764 to 3,595. Also, they opened a Representative Office in Dubai. In May 2008, the Bank established Axis Trustee Services Company Ltd as a wholly owned subsidiary company, which is engaged in trusteeship activities. In December 2008, they launched their new investment advisory service exclusively for High Net Worth clients. In January 2009, the Bank set up Axis Asset Management
33

Company Ltd to carry on the activities of managing a mutual fund business. Also, they incorporated Axis Mutual Fund Trustee Ltd to act as the trustee for the mutual fund business. During the year 2009-10, the Bank opened 200 branches taking the total number of branches Extension Counters (ECs) to 1,035. In March 2 09, 2010, they opened their 1000 branch at Bandar West, Mumbai. In September 2009, Axis Bank launched the private banking business in the domestic market, christened 'Privee' to cater to highly affluent individuals and families offering them unique investment opportunities During the year, the Capital Markets SBU was restructured with the debt capital market business (hitherto a part of the capital markets) carved into a separate vertical. As a result, the Bank's Capital Markets SBU comprises equity capital markets (ECM) business, mergers and acquisitions and private equity syndication. In February 24, 2010, the Bank launched the 'AXIS CALL & PAY on atom', a unique mobile payments solution using Axis Bank debit cards. Axis Bank is the first bank in the country to provide a secure debit card-based payment service over IVR.

Services

Accounts Easy Access Savings Account Prime Savings account Salary Savings Account Power salute: A salute to the defence forces Azaadi Senior Privilege Savings Account
34

 For the woman of today Smart Privilege Savings Account A complete banking solution for Trusts, Associations, Societies, Government Bodies, Section 25 companies and NGOs Pension Savings Bank Account,

Deposits Fixed Deposits Recurring Deposits Encash 24 Tax Saver Fixed Deposit

Loans Welcome to the wide range of Axis Bank's Loan products. Put an end to your financial troubles. Power Homes Power Drive Personal Power Study Power Asset Power Two Wheeler Loan Loan against Security Consumer Power

35

Cards Apart from Gold & Silver credit cards, Axis Bank provides Axis Bank Meal Card Axis Bank Gift Card LIC co-branded Annuity Card

Capital Markets Debt Solutions Equity Solutions Private Equity, Mergers & Acquisitions Advisory Services Trusteeship Services Depository Services Capital Market Funding e-Broking

Credit
Working Capital Finance Term Loans Trade Services and Trade Finance Structured Finance Supply Chain Management Overseas Financing and Transactions SME Standard Products Power Trace

36

Axis bank performance As on the year ended March 31, 2010 the Bank had a net profit of Rs 2514.53crores The bank now has 1035 branches including extension networks across 30 States and 4Union Territories. The bank also has overseas offices in Singapore, China, Hong Kong and Dubai. Crosses the 4,293 ATM mark in Mar 2010 Launches Platinum Credit Card, India's first EMV chip based card Axis Bank share is now trading at Rs 1359.00 (18thAug2010).

AXIS Bank Customer Care Grievance Redressal Complaint Management Team:

Generally, most of the requests, queries, information, complaints (If, any) are sorted out by Axis Banks multi-layered customer care system. But there are times when High Networth Clients (HNIs as they are called), Large Corporate Clients who conduct many thousand transactions of various nature within a span of single day, have unresolved issues of Complex Nature. In order to provide a forum that can effectively address such issues, Axis Bank has a dedicated team called complaints Management Team. Under such situations, you can escalate your complaint to the Complaints Management Team, at Central Office by mailing to

cmt.co@axisbank.com.

37

After examining the matter, the complaints management team will send you its final response within a period of 8 working days from the date of receipt of your complaint by them. In case the resolution is likely to take longer time, the Axis Bank Customer Cares Complaints Management Team will inform you of the same through an interim reply. If the resolution still does not meet your expectations, you can get in touch with the Nodal Officer Grievance Redressal at the below provided address. AVP (RBO) and Nodal Officer Grievance Redressal, Axis Bank Ltd Central Office, RBO Department, 3rd Floor, RNA Corporate Park Kalanagar, Bandra (East), Mumbai 400051. E Mail ID nodal.officer@axisbank.com After thoroughly studying the matter, the designated Nodal Officer will send you the final response within a period of 8 working days from the date of receipt of your complaint at his end. In case the resolution is likely to take longer time, the Nodal Officer will inform you of the same through an interim reply. Within 30 days of lodging a complaint with the Nodal Officer, if you still do not get a satisfactory response from him, and you wish to pursue other avenues for redressal of grievances, you may approach Banking Ombudsman appointed by Reserve Bank of India under Banking Ombudsman Scheme.

38

CHAPTER V DATA AND INTERPRETATION- PERFORMANCE OF BANKING OMBUDSMAN IN INDIAN BANKING SECTOR

Table 5.1. Received complaints

Period No. of BO offices No. of complaints received during the year 47887 69117 79266 Rate of increase(% over previous year) 24 44 15 Average no. Rate of of complaints interest received per BO offices 3192 4608 5284 23.9 14.67 44.36

2007-2008 15 2008-2009 15 2009-2010 15

EXHIBIT 5.1

100000 80000 60000 40000 20000 0

Recived complaints

69117 47887

79266

2007-2008

2008-2009

2009-2010

The numbers of complaints received in 2009-2010 were 79266 as compared to the year of 2009-2009 with 69117 complaints and 47887 complaints in 2007-2008 respectly. The average number complaints received per BO offices increase simultaneously with number of complaints received.
39

Table 5.2 BO office wise receipt of complaints

BO office % incre ase in 20082007- 2008- 2009- 2009 2008 2009 2010 Ahmedabed 2855 3732 4149 31 Bangalore 2975 3255 3854 9 Bhopal 3402 3375 3873 Bhubaneswar 998 1159 1219 16 Chandigarh 2331 2634 3234 13 Chennai 4545 1038 1272 128 1 7 Guwahati 282 455 528 61 Hyderabad 2843 3961 5622 39 Jaipur 3369 3688 4560 9 Kanpur 5340 7776 7832 46 Kolkata 2815 3671 5326 30 Mumbai 6070 9631 1005 59 8 New Delhi 6742 1047 1204 55 3 5 Patna 1480 2110 1707 30 Thiruvanan 1840 2816 2532 53 thapuram Total 4788 6911 7926 7 7 6 No of complaints received during % increa se in 20092010 11 18 15 5 23 23 16 42 24 1 45 5 15 % to total complain ts 20072008 5.9 6.2 7.1 2.1 4.9 9.5 5.9 5.9 7.1 11.2 5.8 12.7 14.1 3.1 3.8 % to total compla ints 20082009 5.4 4.7 4.9 1.7 3.8 6.5 0.7 5.7 5.3 11.3 5.3 13.9 15.2 3.1 4.1 % to total compla ints 20092010 5.2 4.9 4.9 1.5 4.1 16.1 0.7 7.1 5.8 9.9 6.7 12.7 15.2 2.2 3.2

From the above table, it can be inferred that in the year 2007-2008, New Delhi BO offices has the highest complaints received of 6742, followed by Mumbai with 6070 complaints and Kanpur with 5340 complaints. In the year, 2008-2009, New Delhi with 10473, followed by Chennai with 10381and Mumbai with 9631 and Kanpur with 7776 complaints. In the year 2009-2010, Chennai had highest complaints of 12727 followed by New Delhi with 12045 and Mumbai with 10058. Throughout the 3 years period of the study, Bhubaneswar BO offices had received least amount of complaints.

40

Table 5.3

Region - wise receipt of complaints at the BO offices

Region

Rural Semi urban Urban Metropolitan Total

No of complaints received during 20072008 8418 6641 10978 21855 47887

No of complaints received during 20082009 13915 9817 15723 29662 69117

No of % increase in complaints 2008-2009 received during 20092010 25055 65 10741 48 16423 43 27047 36

% increase in 20092010 80 9 5 -9

EXHIBT 5.3
Region - wise receipt of complaints at the BO offices

34%

32%

rural semi urban urban metroplitan

14% 20%

From the above table it can be inferred that there was an increase complaints received year to year from 2007-2008 to 2009-10. The highest number of complaints received in 2009-10 was from metropolitan cities followed by Rural areas, Urban and Semi- Urban areas. As far as percentage of increase in the complaints with respect to the previous years concerned, rural had the highest percentage of complaints.

41

Table 5.4 Category- wise receipt of complaints at the BO offices

Mode NO. of complaints received during 2007-2008 No. % 7183 15% 7662 16% 33042 69% 47887 100 No. of complaints received during 2008-2009 No. % 15927 23% 9352 14% 43838 63% 69117 100 No. of complaints received during 2009-2010 No. % 9221 12% 11400 14% 58645 74% 79266 100

Email Online Letter, postcard, fax, etc. Total

EXHIBIT 5.4

Category- wise receipt of complaints at the BO officescomplaints

80% 70% 60% 50% 40% 30% 20% 10% 0% Eamil on line letter, post-card, fax, 12% 14% 74%

Since 46% of the complaints are received from the rural (32%) and semi urban (14%) areas, the receipt of complaints through the postal mode has increased from 63%to 74% during the current year, indicating that the less access to internet facilities in the rural/semi urban areas as compared to the urban and metro. Email complaints have decreased from 23% to12% of the total complaints during the year 2009-2010.

42

Table 5.5 Bank group wise receipt of complaints

Bank group

2007-2008

2008-2009

2009-2010

Nationalized bank

12033

14974 (22%) 18167 (27%) 21982 (32%) 11700 (17%) 302

19092 (25%) 22832 (30%) 22553 (29%) 11450 (15%) 183

Cumulative total of last five years 46099 (24%) 54531 (29%) 58612 (31%) 29276 (15%) 780

(26%) SBI group 13532 (29%) Private sector 14077 bank (29%) Foreign 6126 bank (13%) Scheduled 295 primary coop. bank (1%) RRBs 826 (2%) Subtotal 46889 (100%) others 998 Total 47887

(1%) 846 (1%) 67971 (100%) 1146 69117

(-) 785 (1%) 76895 (100%) 2371 79266

(-) 2457 (1%) 191755 (100%) 4515 196270

43

EXHIBIT5.5

Bank-group wise receipt of complaints for the cumulative last 3 years

0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 nationalised bank sbi group private sector bank foreign bank

It is evident from the cumulative total of last five years of bank groupwise complaints, the highest number of complaints are from Private sector banks (31%) followed by SBI group( 29%), Nationalised Banks (24%) and Foreign banks(15%).

44

Table 5.6 Category wise receipt of complaints

Nature of complaints

Complaints received during 20072008 5612 5213 10129 6054 3740 1582 6388 3128 141 5900 47887

% to aggregate complaints 20082009 9.7 7.7 25.5 11.8 6.9 4.2 17.2 4.4 .2 12.4 100 20092010 4.7 7.2 23.7 8.3 6 6.1 14.6 2 0.2 23.8 3.4 100

Deposit accounts Remittances Credit cards Loans and advances Charges without notice Pension Failure to meet commitments DSAs and recovery agents Notes and coins Others Out of subject Total

2008- 2009- 20072009 2010 2008 6706 3681 11.7 5335 5708 10.9 17648 18810 21.2 8174 6612 12.7 4794 4764 7.8 2916 4831 11824 11569 3018 1609 3.3 13.3 6.5 .3 12.3 100

113 158 8589 18840 - 2684 69117 79266

45

EXHIBIT 5.6

50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Deposit accounts

category wise receipt of complaints

1. In the category wise receive of complaints, Credit card service received more complaints during the year 2009-2010 with 18810 complaints as compared to the year of 2008-2009 with 17648 complaints and 10129 complaints in 2009-2010. The low number of complaints receives in notes and coins in during the year.

Charges without notice

46

Notes and coins

Failure to meet commitments

Credit cards

Table5.7 Disposal of complaints of BO offices

Particulars Complaints received during the including complaints brought forward previous year Complaints disposed of during the year 2007-2008 2008-2009 2009-2010 year 54992 from No. % 49100 89 5892 11 75009 88699

65576 87 9433 13

83336 94 5363 6

Complaints carried forward to next No. year %

EXHIBIT 5.7

Disposal of complaints of BO offices

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007-2008 2008-2009 2009-2010

Complaints disposed of during the year Complaints carried forward to next year

Banking ombudsman offices disposed of 94% (83336) of the 88699 complaints received during the year 2009-2010, as against disposal of 87% of the complaints received during previous year2008-2009, indicating the promptness in disposal of cases at all the BO offices.
47

Table 5.8

Mode of disposal of complaints

Particulars Complaints disposed during the year No. of complaints disposed by mutual settlement or by issue of awards No. of complaints not admitted/rejected due to various reasons 2007-2008 49100 2008-2009 65576 2009-2010 83336

29295 (60%) 19735 (40%)

22388 (34%) 43115 (66%)

31489 (38%) 51847 (62%)

EXHIBIT 5.8
Mode of disposal of complaints
70% 60% 50% 40% 30% 20% 10% 0% 2007-2008 2008-2009 2009-2010 mutual settlement complaints not admitted

The above table shows Mode of disposal of complaints. Around 38% (31489) of the complaints dealt with have been settled by way of mutual settlement or by issue of awards while 62% (51847) of the complaints have been disposed off (rejected) during 2009-2010.

48

Table 5.9.

Disposal of maintainable complaint

Sr. no year No. of Disposal by complaints award disposed of No % 29365 70 0.24 22461 73 0.34 31489 211 0.67 EXHIBIT5.9
250

Disposal by settlement

1 2 3

2007-2008 2008-2009 2009-2010

No 29295 22388 31278

% 99.76 99.68 99.33

complaints of disposal of awards

200 150 100 50 70 0 2007-2008 2008-2009 2009-2010 211

73

As many as 31489 complaints were settled by mutual agreement during the year 2009-2010 as compared to mutual settlement of 22388 complaints during the previous year. BO offices issued 211 awards during the year 2009-2010 as compared to 73 awards issued during the previous year of 2008-2009. Lesser number of awards issued by the BOs may be attributed to the banks attempt to resolve the complaints before issue of awards, since receipt of awards is considered as un-desirable.

49

Table 5.10

Rejected complaints
Reason 2007-2008 First resort complaints Time brand complaints Complaints pending in other forum Complaints dealt earlier Frivolous complaints Incomplete address etc Complaints without sufficient cause Not pursued by the complaints Complicated , requiring elaborate evidence No loss to the complaints Complaints outside the scheme Bank branches outside BO jurisdiction Tot al 7950 260 476 Complaints rejected during % 2008% 2009-2010 % 2009 40 18187 42 16163 31 1 510 1 642 1 2 707 2 948 2 804 2 194 1 3019 7 4764 11 806 512 2 1 1357 3 132 6337 12 6301 12 626 2514 1 5

333 2 137 1 434 2 3249 16 703 478 4 2

547 3 3673 19 1492 8

143 0 10771 25 2698 6

511 1 12006 23 4310 9

19735 10 0

43115 10 0

51847 10 0

50

EXHIBIT 5.10

Rejection of Complaints
Complaints outside the scheme Complicated , requiring Complaints without sufficient Frivolous complaints Complaints pending in other First resort complaints 0 5000 10000 15000 20000 2009-2010 2008-2009 2007-2008

Although as much as 51847 complaints were shown as rejected during the year. The scheme could provide relief to the complaints to a large extent by way of reversal of bank charges, overdue of bank charge overdue interest, over limit charge, partial settlement/writ off of overdue, etc

51

Table 5.11

Pending position of complaints at BO offices

Period of pending 20072008 Up to 1 month 1-2 months 2-3 months More than 3 months Total 2712 1394 861 925 5892 No. of cases pending % to 2008% to 2009total 2009 total 2010 pending pending 46 5041 54 2787 24 2751 29 1526 15 956 10 808 15 685 7 242 100 9433 100 5363 % to total pending 52 28 15 5 100

EXHIBIT 5.11

Pennding position of complaints

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 2007-2008 2008-2009 2009-2010 5892 9433 5363

The pending cases were highest in the year 2008-2009.But, the cases were reduced in the subsequent year 2009-2010.

52

Table 5.12

Cost running the scheme

Period Total cost (in core) 12.50 15.29 19.74 No of complaints disposed of 49100 65576 83336 Cost per complaints 2546 2331 2368

2007-2008 2008-2009 2009-2010

While the aggregate cost of running the 15 banking ombudsman offices has increased by 29% in absolute terms during the year under review, the cost per complaint disposed of has maintained at the same level due to the increase in the number of complaints received/disposed of.

53

Table No.5.13. Disposal of complaints banking ombudsman

year Complain ts received 44766 Complain ts redressed 37661 x5499 2 1022 6 y4910 0 1143 9 X X XY

2006 2007 2007 2008 2002009 2009 2010

10457107 6 -

13085072 1 -

11697521 4 -

54992

49100

75009 88699

65576 83336

2001 7 3370 7 4349 8

1647 6 3423 6 3927 3

40068028 9 11361618 49 16414132 14

27145857 6 11721036 96 15744129 93

32980009 2 11539928 52 16007681 58

EXHIBIT 5.13

complaints received&redressed

200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2006-2007 2007-2008 2008-2009 year 2009-2010
Series2 Series1

54

Karl Pearsons correlation co-efficient: XY (X)(Y) /N r= X (X) Y (Y) N N

1600768158-(43498) (39273) 1641413214-(43498) 1574412993- (39273) 1259108767 1262998013 1265939587 1259108767 1264466234

= 0.996

Inference There is a significant relationship between the complaint received and complaint redressed by banking Ombudsman during the four years 2006-2007,2007-2008,2008-2009 and 2009-2010.

55

CHAPTER VI DATA AND INTERPRETATION- PERFORMANCE OF BANKING OMBUDSMAN IN AXIS BANK

Table 6.1 Statement of Customer Complaints received by bank March 31, 2010 Branches falling under Complaints North Zone East Zone West Zone South Zone Complaints pertaining to Retail Assets, Credit Cards and other services Total No of complaints 1129 600 1054 585 1213

4581

EXHIBIT 6.1 customer complaints in AXIS Bank

1200 1000 800 600 400 200 0 North Zone East Zone West Zone South Zone

Form the above table, it can be inferred that the large number of complaints were received pertaining to Retail Assets, Credit Cards and other services and most of the complaints received were from North Zone followed by west zone in the year 2009-2010.
56

Table No.6.2.

Disposal of complaints in Axis bank

year Complain Complain xts ts 1720 received redressed 2006 12766 12830 1104 6 2007 2007 4581 4571 2861 2008 2008 1720 3254 2009 2009 3272 1681 1552 2010 2010 881 931 -839 2011 total 1462 0

y3254 9576

XY

122014 91699776 116 818532 1 1734489

105776496

1317

3767937

-1573

240870 4 703921

2474329

-2441296

-2323

5396329

1948997

6997

133312 10130492 062 3

109052134

57

EXHIBIT 6.2
30000

complaints received&redressed

25000 20000 15000 10000 5000 0 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 year
Series2 Series1

XY (X)(Y) / N =

X (X)
N

Y (Y) N

109052134-(14620) (6997) /5 = 133312062-(4620) 101304923-(6997) 5 5 88592906 = 90563182 91513321 88592906 = 91037007 = 0.973 Inference There is a relationship between the complaints received and complaints redressed in Axis bank during the period of 5 years.
58

Table No.6.3 Disposal of complaints in axis bank

year

20062007 20072008 20082009 20092010 20102011

Complaints Complaints x-52 pending in pending in beginning ending 80 16 28 70 52 13 63 80 70 52 13 18 -39 11 18

y-70

XY

-54 10 -18 -57 -119

784 324 1521 121 2750

2916 100 324 3249 6589

-1512 180 702 -627 -1257

59

EXHIBIT 6.3
160 140 120 100 80 60 40 20 0 2006-2007 2007-2008 2008-2009 year 2009-2010 2010-2011

complaints pending peginning&ending

Series2 Series1

XY (X) (Y) /N = X (X) Y (Y) N N (-1257) (18) (-119) 2750-(18) 6589- (-119) 5 5 -828.6 2685.2 3756.8 -828.6 3176.129 = -0.261 Inference There is a negative correlation between the complaints at the beginning and the complaints pending at the end of the period in AXIS Bank during the five years period of the study.

60

CHAPTER VII FINDINGS AND CONCLUSIONS Findings 79266 of the complaints were received during the year2009-2010. 12721 of the complaints were received during the year 2009-2010. The highest number i.e 58645 complaints were received through Letter, post-card, fax, etc 2704 of region-wise receive complaints during the year 2009-2010 from metropolitan cities. The cumulative total of last five years reveal that Private sector banks had received highest number of complaints of 31% in comparison to all the other banks. Complaints relating to credit card were the highest with 18810(23.7%) of during the year 2009-2010. 83336 (94%) of complaints were received during the year 2009-2010. And 9433(13%) of complaints carried forward to next year in 20092010. 3148 (38%) of the complaints were disposed by in mutual settlement in the year 2009-2010.

61

 43115(66%) of the complaints received during the year 2008-2009 were rejected. The pending cases were highest in the year 2008-2009. Cost per complaints was highest with 2546 during the year 2007-2008. 88699 of the complaints were received by banking ombudsman during the year 2009-2010. 8336 of the complaints redressed by banking ombudsman during the year 2009-201 There is a significant relationship between the complaint received and complaint redressed by banking Ombudsman during the four years 2006-2007, 2007-2008, 2008-2009 and 2009-2010. 12766 of the complaints receive in Axis bank during the year 20102011. 80 complaints were pending at the beginning in the year 2010-2011 in Axis bank. There is a negative correlation between the complaints at the beginning and the complaints pending at the end of the period in AXIS Bank during the five years period of the study. There is a relationship between the complaints received and complaints redressed in Axis bank during the period of 5 years
62

Suggestions
1. The main focus of Ombudsman scheme should be on the complaints against credit card companies may well constitute a large number of complaints pertained to loans and advances. Complaints against deposit accounts formed the next highest category.

2. Many customers from rural areas were not familiar with the term ombudsman. Hence, RBI has to take essential steps to create awareness in rural areas.

3. It is imperative that attempts should be made to increase the instances of disputes being resolved by mediation/conciliation rather than by awards. In the event, that ombudsman has to give award; it must be made final and binding on the parties with only single appeal allowed to a higher court of law. 4. Independence of the ombudsman is another issue of great significance. An independent Counsel consisting of representative of banks and customers should appoint the ombudsman. The ombudsman must be a person who has had practical experience in handling customer complaints and in banking laws and regulations. Further, the ombudsman should have a fixed tenure and should not be removed from office except in cases of gross misconduct or dereliction of duty. Only when these steps are taken will office of the ombudsman gain the confidence and trust of the customers.

63

5. To ensure that this happens, all banks must not only display the scheme prominently in all their branches, they must also (on being approached) explain clearly the obvious advantages of this system over litigating in court of law. To improve efficiency, the possibility of performance based remuneration for the ombudsman can also be considered, i.e., depending upon the proportion of complaints that are resolved by conciliation or mutual consent. Improving accessibility of the scheme to the rural poor by having more offices in rural areas is also crucial.

64

Conclusion: Though the Banking Ombudsman Scheme was introduced in the year 1995,witha viewto do away with the banking customer complaints, the sc heme was amended in subsequent years of 2002 and 2006. But the banks do not seem to have adopted the norm s for their efficient functioning that is the reason behind the increasing consumer cases against the banks, which are governed under the scheme. Thus, it can be seen that the Ombudsman scheme is a boon and a very important channel for redressal of grievances by the general public against banks and banking services. It is framed in such a manner that it does not oust the jurisdiction of other courts, and hence, aggrieved people do not hesitate in using the banking ombudsman as a primary forum for resolution of disputes regarding banks. To instill consumer confidence in the scheme, the RBI has to ensure that the awards of the ombudsman are implemented by the banks. Decline in duration of pending complaints also narrates the efficiency of ombudsman in disposal of complaints. Another step taken by RBI to allow the complainant to file the complaint through online mode seems to be successful as more than one-fourth of total complaints are filed through this mode. Though there is an increase in number of complaints from the rural areas but it does not seem to be up to the mark. Improving accessibility of the scheme to the rural poor by having more offices in rural areas is need of the day. Further the scope of Bank Ombudsman is limited to twenty seven grounds on which a customer can file a complaint against bank. Apart from above BOs offices and Reserve Bank of India also have also started outreach activities for creating awareness among customers like interface with banks, organizing awareness camps, personal/ village visits, participation in exhibitions, responding to readers queries in newspapers, broadcasting advertisement.
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JOURNALS
Barbour, B, The Ombudsman and the Rule of Law (2005) 44 AIAL Forum, 17 Barbour B, What are the Essential Features of an Ombudsman? in Creyke R & McMillan J (eds) Administrative Law: the Essentails (AIAL 2002) Del Villar, K, Who guards the guardians? Recent developments concerning the jurisdiction and accountability of ombudsman, (2003) AIAL Forum 25 Groves, M, Ombudsmens Jurisdiction in Prisons (2002) 28 Monash University Law Review 181 Petre, C, The Future of the Relationship Between Parliamentary Ombudsman and Industry Ombudsman (2003) AIAL Forum 63 Reif, LC, Building Democratic Institutions: The Role of National Human Rights Institutions in Good Governance and Human Rights Protection (2000) 13 Harvard Human Rights Journal 8 Stuhmcke A, The Commonwealth Ombudsman: Twenty Five Years on and No Longer Alone (2003) AIAL Forum 54 Stuhmcke, A, The rise of the Australian Telecommunications Industry Ombudsman (2002) 26Telecommunications Policy 69 1. The Banking Ombudsman Scheme, 2006 2. Banking Ombudsman Scheme Annual Report 2004

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WEBISTES http://www.rbi.org.in/Scripts/PublicationsView.aspx?id=14014 http://www.lawadmissions.info/index.php?option=com_content&view=ar ticle&id=298:banking-ombudsman-scheme&catid=61:courts-andtribunals&Itemid=37 http://www.mightylaws.in/409/banking-ombudsman-scheme http://www.axisbank.com/shareholderscorner/financials/annualreports.as p http://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asp

http://www.moneycontrol.com/company-facts/axisbank/history/AB16

www.rbi.org.

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AXIS BANK BO LOCATION

BO location Kolkata Bhubaneswar States under jurisdiction West Bengal and Sikkim Orissa Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura Bihar and Jharkhand Delhi, Haryana, Jammu and Kashmir and Ghaziabad district of Uttar Pradesh Rajasthan Himachal Pradesh, Punjab and Union Territory of Chandigarh Dedicated Email id boaxiskol@axisbank.com boaxisbnr@axisbank.com

Guwahati

boaxisgwh@axisbank.com

Patna New Delhi Jaipur Chandigarh

boaxisptn@axisbank.com boaxisdel@axisbank.com boaxisjpr@axisbank.com boaxiscgh@axisbank.com

Kanpur

Uttarakhand and Uttar Pradesh (excluding District of boaxiskpr@axisbank.com Ghaziabad) Tamil Nadu, Union Territories of Pondicherry and boaxischn@axisbank.com Andaman and Nicobar Islands Karnataka Andhra Pradesh boaxisblr@axisbank.com boaxishyd@axisbank.com

Chennai Bangalore Hyderabad Thiruvananthpuram Mumbai Ahmadabad

Kerala and Union Territory of boaxistrv@axisbank.com Lakshadweep Maharashtra and Goa Gujarat, Union Territories of Dadra and Nagar Haveli, Daman and Diu Madhya Pradesh and Chhattisgarh
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boaxismum@axisbank.com boaxisahm@axisbank.com

Bhopal

boaxisbpl@axisbank.com

Annexure A 15FORM OF COMPLAINT (TO BE LODGED) WITH THE BANKING OMBUDSMAN (TO BE FILLED UP BY THE COMPLAINANT) To: The Banking Ombudsman Place of BOs office.. Dear Sir, Sub: Complaint against .(Name of the banks branch) of (Name of the Bank) Details of the complaint are as under: 1. Name of the Complainant .. 2. Full Address of the Complainant Pin Code .. Phone No/ Fax No. . Email . 3. Complaint against (Name and full address of the branch/bank) . . 15 Substituted by Notification Ref CSD.BOS.No. 4736/13.01.01/2008-09 dated February 3, 2009 Pin Code . Phone No. / Fax No. . 4. Particulars of Bank or Credit card Account (If any) 5. (a) Date of representation already made by the complainant to the bank (Please enclose a copy of the representation) . (b) Whether any reminder was sent by the complainant? YES/NO ( Please enclose a copy of the reminder ) . 6. Subject matter of the complaint (Please refer to Clause 8 of the Scheme)
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 7. Details of the complaint: (If space is not sufficient, please enclose separate sheet) 8. 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, please enclose a copy of the reply ) 9. Nature of Relief sought from the Banking Ombudsman ( Please enclose a copy of documentary proof, if any, in support of your claim ) 10. Nature and extent of monetary loss, if any, claimed by the complainant by way of compensation (please refer to clauses 12 (5) & 12 (6) of the Scheme) Rs.. 11. List of documents enclosed: (Please enclose a copy of all the documents ) 12. Declaration: (i) I/ We, the complainant/s herein declare that: a) the information furnished herein above is true and correct; and b) I/We have not concealed or misrepresented any fact stated in the above columns and in the documents submitted herewith. (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. (iii) The subject matter of the present complaint has never been brought before 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. (iv) The subject matter of the present complaint has not been decided by/pending with any forum/court/arbitrator. (v) I/We authorise the bank to disclose any such information/ documents
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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. (vi) I/We have noted the contents of the Banking Ombudsman Scheme, 2006. Yours faithfully, (Signature of 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, the following declaration should be submitted.) I/We the above named complainant/s hereby nominate Shri/Smt.. who is not an Advocate and whose address is as my/our REPRESENTATIVE in all proceedings of this complaint and confirm that any statement, acceptance or rejection made by him/her shall be binding on me/us. He/She has signed below in my presence. ACCEPTED (Signature of Representative) (Signature of Complainant) Note: If submitted online, the complaint need not be signed.

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