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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 socio-economic 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 polices to enable resolution of
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
bankshaving 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.
An institution that receives and deals with disputes related to banking and financial
services. Examples of complaints an ombudsman might handle include non-payment of
a check and refusal to honor a duly issued letter of credit. Banking ombudsman services exist in
countries like the United Kingdom and India, though other nations have similar organizations.
The Reserve Bank may appoint one or more of its officers in therank of Chief General
Manager or General Manager to be known as Banking Ombudsmen to carry out the functions
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entrusted tothem by or under the Scheme. The appointment of Banking Ombudsman under the
above Clause may be made for a period not exceeding three years at a time.
The Securities Exchange Board of India (SEBI) under section 30 read with sub-
section (1) of section 11 of the SEBI Act, 1992, has framed the SEBI(Ombudsman)
Regulations, 2003, which were notified on 21
st
August 2003. The Regulations provided for
the establishment of the office of Ombudsman to redress the Grievance of investors in
securities and connected matters. The listed companies and registered stock intermediaries
have to disclose the name address and other particulars of ombudsman in their for the
benefit of the investors.
The government is considering creating an office of Income Tax Ombudsman
to protect individual taxpayers right. The Ombudsman will identify issues that increase the
compliance burden or create problems for taxpayers and bring those issues to the attention of
the ministry of Finance. The Ombudsman will make appropriate legislative proposal where
necessary and send periodical reports to the Department of Revenue, suggesting appropriate
action.
The Insurance Ombudsman has started functioning from 1999, to provide for
efficient, cost effective and impartial settlement of claims and grievance of any person
against a Life r General Insurance in Public and private sector. The meaning of expression
any other person is wider than consumer and therefore, even third party having grievance
with respect to an Insurance contract can approach the ombudsman.







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PURPOSE OF THE STUDY:-
The basic purpose behind the study was to get detailed knowledge about the
BANKING OMBUDSMAN. The study was basically aimed to know more about
the banking ombudsman scheme, services offered to the customer, how they deal
with the customer complaints. And also to know about the duties, functions and
powers of the ombudsman.

OBJECTIVES OF THE STUDY:-
To know about the Banking Ombudsman Scheme & how it does works.
To know about the services of the Banking Ombudsman offered to the
customer.
To know about the Banking Ombudsman deals with customer complaints.
To know about the duties, functions & powers of the Ombudsman.
To know about the CANARA BANK.



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RESEARCH METHODOLOGY:-


LIMITATIONS:-
Primary data is not collected.
Find very difficult to collect information on Canara Bank .












SECONDARY
DATA
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CHAPTER 1 : BANKING OMBUDSMAN
1.1. INTRODUCTION
An ombudsman is a person who has been appointed to look into complaints about an
organization. Using an ombudsman is a way of trying to resolve a complaint without going to
court. Banking Ombudsman is a quasi judicial authority functioning under Indias Banking
Ombudsman Scheme, 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. The Banking Ombudsman Scheme was first introduced in India
in 1995,and was revised in 2002 and 2006. In the wake of the failure in the efficient services of
the banks, the RBI brought a scheme for the prompt, efficient and courteous services and also to
protect the rights of the customers. The Banking Ombudsman is an official authority to
investigate the complaint from the customers and address the complaint and thereby bring the
solution among the aggrieved parties. So the Banking Ombudsman plays the role of a mediator
and serves the purpose of reconciliation. The Banking Ombudsman has been defined under
clause 4 of the Banking Ombudsman Scheme,2006.
Definition:-
An institution that receives and deals with disputes related to banking and financial
services. Examples of complaints an ombudsman might handle include non-payment of
a check and refusal to honor a duly issued letter of credit. Banking ombudsman services exist in
countries like the United Kingdom and India, though other nations have similar organizations.
Appointment & Tennure:-
The Reserve Bank may appoint one or more of its officers in the rank of Chief General
Manager or General Manager to be known as Banking Ombudsmen to carry out the functions
entrusted tothem by or under the Scheme. The appointment of Banking Ombudsman under the
above Clause may be made for a period not exceeding three years at a time.

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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 forresolving customers complaints. Com
plaint can be madebefore 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 awardor a final order, has already been passed by any suchcompetent court, tribunal,
arbitrator or forum.

1.3. DUTIES & FUNCTIONS OF BANKING OMBUDSMAN
The Ombudsman shall enquire into and investigate in accordance with the provisions of the
Act, and take action or steps as may be prescribed by the Act and concerning.
Practices and actions by persons, enterprises and other private institutions where
complaints allege that violations of fundamental rights and freedoms have taken place.
All instances or matters of alleged or suspected corruption and them is appropriation of
public moneys or other public property by officials.
Without derogating from the provisions, any request or complaint in respect of instances or
matters referred to in that provisions, 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, or that any practice is so followed, in a manner which is not in the public
interest.
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That the powers, duties or functions which vest in the State or, body or institution, or any
person in its employment are exercised or performed in an irregular manner.
That moneys forming part of the funds of the State or body or institution, or received or held
by or on behalf of the State or body or institution are being or have been dealt with an
irregular manner.
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 under the provisions when the grounds on
account of which the inquiry is desired is in the opinion of the Ombudsman. The provisions
shall not apply in respect of any decision taken in or in connection with any civil or criminal
case by a court of law.

1.4. TYPES OF OMBUDSMAN
1. Banking Ombudsman:-
The Reserve Bank of India (RBI) first introduced the Banking Ombudsman Scheme
In1995, which has been revised in 2002 and 2005. The latest revised Scheme has come
into force from 1stJan 2006.

2. SEBI Ombudsman:-
The Securities Exchange Board of India (SEBI) under section 30 read with sub-
section (1) of section 11 of the SEBI Act, 1992, has framed the SEBI(Ombudsman)
Regulations, 2003, which were notified on 21
st
August 2003. The Regulations provided for
the establishment of the office of Ombudsman to redress the Grievance of investors in
securities and connected matters. The listed companies and registered stock intermediaries
have to disclose the name address and other particulars of ombudsman in their for the
benefit of the investors.


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3. Electricity Ombudsman:-
The Electricity Regulatory Commission, under section 181 read with sub-section(5)
of section 42 of the Electricity Act, 2003, issues guidelines for establishment of forum and
Ombudsman for redressal of grievances of Electricity consumers. The Delhi Regulatory
Commission (DERC) vide its Notification dated 11thMarch,2006 has issued DERC
(Guidelines for establishment of Forum of redressal of grievance of the consumer and
Ombudsman) Regulations, 2003. It may be noted that the Ombudsman is the APPELLATE
Authority under the Electricity Act2003,and the DERC Regulations, 2003 and therefore an
electricity consumer has to first approach the Consumer Grievance Redressal Forum
established under the DERC Regulations, 2003.

4. Telecom Ombudsman:-
The Telecom Regulatory Authority of India Act, 1997, empowers the Telecom
Regulatory Authority of India Act 1997, empowers the Telecom Regulatory Authority of
India (TRAI) to make the recommendations on laying down the standards of quality of
services to be provided by the services providers and conduct the interest of the periodical
surveys of Telecom services so as to protect the interest of the consumers. The telecoms
operators frequently threaten to disconnects the phones and with draw the numbers given t o
subscribers if the deadline for payment is missed by a day or there is miscalculation of the
tiniest amount. The TRAI is, however, neither empowered to look into the grievances of
individual customers nor take action against the operators who do not meet quality of
standards As there is no specialized body to redress the grievance of telecom customers, they
have to approach consumer forum setup under THE Consumer Protection Act, 1986, or civil
courts for Resolutions adjudication of disputes.

5. I ncome Tax Ombudsman:-
The government is considering creating an office of Income Tax Ombudsman
to protect individual taxpayers right. The Ombudsman will identify issues that increase the
compliance burden or create problems for taxpayers and bring those issues to the attention of
the ministry of Finance. The Ombudsman will make appropriate legislative proposal where
necessary and send periodical reports to the Department of Revenue, suggesting appropriate
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action. It is proposed to initially setup offices of Ombudsman at Delhi, Mumbai, Kolkata and
Chennai.

6. I nsurance Ombudsman:-
The Government of India, Minister of Finance, Department of Economics Affairs,
Insurance Division under section 114 (1) of Insurance Act, 1938, has framed the Redressal
of Public Grievance Rules, 1998, for appointment of Insurance Ombudsman, which comes
into force with effect from 11thNovember 1998. The Insurance Ombudsman has started
functioning from 1999, to provide for efficient, cost effective and impartial settlement of
claims and grievance of any person against a Life r General Insurance in Public and private
sector. The meaning of expression any other person is wider than consumer and therefore,
even third party having grievance with respect to an Insurance contract can approach the
ombudsman.


















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CHAPTER 2 : COMPLAINTS CONSIDERED AND NOT
CONSIDERED BY BANKING OMBUDSMAN
2.1. 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.
Non-acceptance, without sufficient cause, of small denomination notes tendered for any
purpose, and for charging of commission in respect thereof.
Non-acceptance, without sufficient cause, of coins tendered and for charging of commission
in respect thereof.
Non-payment or delay in payment of inward remittances.
Failure to issue or delay in issue of drafts, pay orders or bankers cheques.
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.
Complaints from non-resident Indians having accounts in India in relation to their
remittances from abroad, deposits and other bank-related matters.
Levying of charges without adequate prior notice to the customer.
Non-adherence by the bank or its subsidiaries to the instructions of reserve bank on atm/debit
card operations or credit card operations.
Refusal to accept or delay in accepting payment towards taxes, as required by reserve
bank/government.
Refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption
of government securities.
Forced closure of deposit accounts without due notice or without sufficient reason.
Refusal to close or delay in closing the accounts.
Non-observance of reserve bank guidelines on engagement of recovery agents by banks.
Non-observance of reserve bank directives on interest rates.
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Delays in sanction, disbursement or non-observance of prescribed time schedule for disposal
of loan applications.
Non-acceptance of application for loans without furnishing valid reasons to the applicant.

2.2. 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.
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.
The subject matter of the complaint is pending for disposal /has already been dealt with at
any other forum like court of law, consumer court etc.
Frivolous or vexatious.
The institution complained against is not covered under the scheme.
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.
The complaint should not be frivolous or vexatious in nature.
The complaint should be made before the expiry of the period of limitation prescribed under
the Indian Limitation Act, 1963 for such claims.








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CHAPTER 3 : BANKING OMBUDSMAN SCHEME
3.1. PRELIMINARY
1) Short Title, Commencement, Extent And Application:-
This scheme may be called the Banking Ombudsman Scheme.
It shall come into force on such date as the Reserve Bank of India may specify.
It shall extend to the whole of India.
This scheme shall apply to the business in lndia of every commercial bank (other than
Regional Rural Banks) and. Scheduled Primary Co-operative Bank, having a place of
business in India, whether such bank is incorporated in India or outside India.

2. Object Of The Scheme:-
The object of the Scheme is to enable resolution of complaints relating to provision of
banking services and to facilitate the satisfaction, or settlement of such complaints.

3. Suspension Of The Scheme:-
The Reserve Bank, if it is satisfied that it is expedient so to do, may by ordersuspend for
such period as may be specified in the order, the operation of all or any of the provisions
of this scheme, either generally or in relation to any specified banking company.
The Reserve Bank may, by order, extend from time to time, the period of any suspension
ordered as aforesaid by such period, as it thinks fit.

3.2. ESTABLISHMENT OF BANKING OMBUDSMAN
1. Appointment:-
The Reserve Bank may appoint one or more persons to be known as Banking
Ombudsman to carry out the functions entrusted to him by or under the scheme. The Banking
Ombudsman shall hold office during the pleasure of the Governor, Reserve Bank.

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2. Territorial J urisdiction:-
The Reserve Bank shall specify the territorial limits, to which the authority of each of
the Banking Ombudsman appointed pursuant to Clause 4 shall extend.

3. Location Of Office:-
The office of the Banking 0mbudsman will be located at such places as may be
specified by the Reserve Bank.

4. Facility For Having Temporary Headquarters:-
In order to expedite disposal of complaints, the Banking Ombudsman may hold
sittings at other places within his area of jurisdiction.

5. Qualification:-
The Banking Ombudsman will be a person of high standing in the legal, banking,
financial services, and public administration or management sectors.

6. Tenure:-
The Banking Ombudsman will be appointed for a period not exceeding three years
and be eligible for extension for a further period not exceeding two years subject to an
overall age limit of 65 years. Consequent on appointment, the Banking Ombudsman shall
devote his whole time to the affairs of his office. Provided that the Reserve Bank may, if in
its opinion it is necessary so to do, permit the Banking 0mbudsman to undertake such part
time honorary work as is not likely to interfere with his duties as Banking Ombudsman.

7. Remuneration:-
The remuneration and other perquisites payable/extended to the Banking Ombudsman
will be determined by the Reserve Bank from time to time and borne by the banks in such
proportion and in such manner as may be determined by the Reserve Bank.



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8. Staffing Of The Office Of The Banking Ombudsman:-
The Banking Ombudsman shall be provided with a secretariat drawn from banks,Reserve
Bank, etc. who will be placed on duty with the Office of the Banking Ombudsman.
The cost of the secretariat will be shared by banks in such proportion as may be
determined by the Reserve Bank.

3.3. JURISDICTION POWERS AND DUTIES OF BANKING
OMBUDSMAN
1. General:-
The Banking Ombudsman's powers and duties will be:-
To receive complaints relating to the provision of banking services.
To consider such complaints and facilitate their satisfaction, or settlement by agreement,
by making a recommendation, or Award in accordance with this scheme.

2. Specific Ambit Of Authority:-
As regards banking services, the Banking Ombudsman's authority will include:-
All complaints concerning deficiency in service such as:-
i. Non-payment/inordinate delay in the payment or collection of cheques,drafts/bills etc.
ii. Non-acceptance, without sufficient cause, of small denomination notes tendered for
any purpose, and for charging of commission in respect thereof.
iii. Non-issue of drafts to customers and others.
iv. Non-adherence to prescribed working hours by branches.
v. Failure to honor guarantee/letter of credit commitments by banks.
vi. Claims in respect of unauthorized or fraudulent withdrawals from deposit accounts,
etc.
vii. Complaints pertaining to the operations in any savings, current or any other account
maintained with a bank, such as delays, non-credit of proceeds to parties accounts,
non-payment of depositor non-observance of the Reserve Bank directives, if any,
applicable to rate of interest on deposits.
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viii. Complaints from exporters in India such as delays in receipt of
export proceeds, handling of export bills, collection of bills, etc. provided the saidcom
plaints pertain to the bank's operations in India; and
ix. Complaints from Non-Resident Indians having accounts in India in relation to their
remittances from abroad, deposits and other bank-related matters.

Complaints concerning loans and advances only insofar as they relate to:-
i. Non-observance of Reserve Bank directives on interest rates.
ii. Delays in sanction/non-observance of prescribed time schedule for disposal of loan
applications and
iii. Non-observance of any other directions or instructions of the Reserve Bank, as may
be specified for this purpose, from time to time.

Such other matters as may be specified by the Reserve Bank from time to time in
this behalf.

3. Other Powers And Duties:-
General superintendence and control:-
The Banking Ombudsman shall exercise general superintendence and control over his
office and shall be responsible for the conduct of business thereat.
Power to incur expenditure:-
The Banking Ombudsman shall have power to incur expenditure on behalf of the
office. In order to exercise the aforesaid power, the Banking Ombudsman will draw up an
annual budget for his office in consultation with Reserve Bank. The Reserve Bank will
indicate the shares to be borne by the concerned banks. The Banking Ombudsman shall
exercise the powers of expenditure within the approved budget.
Annual report on functioning and Working of the banking ombudsmans office:-
i. The Banking Ombudsman shall send to the Governor, Reserve Bank, in May every
year, a report containing a general review of the activities of the office of the
Ombudsman during the preceding financial year, and shall furnish such other
information as the Reserve Bank may direct.
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ii. The Reserve Bank may, if it considers necessary in the public interest so to
do, publish in such consolidated form or otherwise as it deems fit, the report and the
information received from the Banking Ombudsman.

3.4. PROCEDURE FOR REDRESSAL OF GRIEVANCE
1. Complaint:-
Any person who has a grievance against a bank, may himself or through an authorized
representative make a complaint in writing to the Banking Ombudsman within whose
jurisdiction the branch or office of the bank complained against is located.
The complaint shall be in writing duly signed by the complainant or his authorized
representative 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, relied on by the
complainant, the nature and extent of the loss caused to the complainant and the relief
sought from the Banking Ombudsman and a statement about the compliance of the
conditions referred to in sub- clause (3) of this clause.
No complaint to the Banking Ombudsman shall lie unless
i. 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 replywithi
n a period of two months after the bank concerned received his representation or the
complainant is not satisfied with the reply given to him by the bank.
ii. The complaints made not later than one year after the bank had rejected the
representation or sent its final reply on the representation of the complainant.
iii. The complaint is not in respect of the some subject matter, which was settled through
the office of the Banking Ombudsman in any previous proceedings whether received
from the same complainant or any one or more of the parties concerned with the subject
matter.
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iv. The complaint is not 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 order
of dismissal has already been passed by any such court, tribunal, arbitrator or forum.
v. The complaint is not frivolous or vexatious in nature.

2. Power To Call For I nformation:-
For the purpose of carrying out his duties under this scheme, a Banking Ombudsman may
require the bank named in the complaint to provide any information or furnish certified
copies of any document relating to the subject matter of the complaint which is or is
alleged to be in its possession. Provided that in the event of the failure of a bank to
comply the requisition made under sub clause (1) the Banking Ombudsman may, if he
sees fit, draw the inference that the information, if provided or copies if furnished, would
be unfavorable to the bank.
The Banking Ombudsman shall maintain confidentiality of any information or document
coming into his knowledge or possession in the course of discharging his duties and shall
not disclose such information or document to any person except with the consent of the
person furnishing such information or document. Provided that nothing in this clause
shall prevent the Banking Ombudsman from disclosing information or document
furnished by a party in a complaint to the other party or parties, to the extend considered
by him to be reasonably required to comply with the principles of natural justice and fair
play in the proceedings.

3. Settlement Of Complaint By Agreement:-
As soon as it may be practicable so to do the Banking Ombudsman shall cause a notice of
the receipt of any complaint along with a copy of the complaint to the branch or office of
the bank named in the complaint and endeavour 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, the Banking Ombudsman
may follow such procedure as he may consider appropriate and he shall not be bound by
any legal rule of evidence.
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4. Recommendation For Settlement:-
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 he may consider necessary, the Banking
Ombudsman may make a recommendation by reference to what is, in his opinion, fair in
all the circumstances. Copies of the recommendation shall be sent to the complainant and
the bank concerned.
The recommendation by the Banking Ombudsman shall be open to acceptance by
the complainant only if he accepts all terms of the recommendation in full and final
settlement of his claim against the bank and he shall, if he accepts there commendation,
within two weeks from the date of receipt of there commendation send his acceptance in
writing stating clearly that he is prepared to accept a settlement in terms of the
recommendation is full and final settlement of his complaint.
The Banking Ombudsman shall cause a copy of the letter of acceptance, received from
the complainant to be forwarded to the bank. The bank shall, if there commendation is
acceptable to it, comply with the terms of the recommendation immediately on receipt of
acceptance of the terms by the complainant and inform the Banking Ombudsman of the
settlement in terms of his recommendation. If the recommendation is not acceptable to
the bank, it shall inform the Banking Ombudsman within a period of two weeks.

5. Award By The Banking Ombudsman:-
Where the complaint is not settled by agreement or recommendation as provided in
clause 18 or 19 as the case may be, within a period of two months from the date of receipt
of the complaint or such extended date as may be considered necessary by him,
the Banking Ombudsman shall inform the parties of his intention to pass an Award.
It shall be open to the parties to submit any further representations or evidence in support
of their case within a period of 15 days from the date of notice referred to in sub- clause
(1).
The Banking Ombudsman shall pass an Award after affording the parties reasonable
opportunity to present their case. He shall be guided by the evidence placed before him
by the parties, the principles of banking law and practice, directions, instructions and
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guidelines issued by the Reserve Bank from time to time and such other factors which in
his opinion are necessary in the interest of justice.
An Award shall be in writing and shall state the direction/s, if any, to the bank for
specific performance of its obligations and the amount awarded to the complaint by way
of compensation for the loss suffered by him Belong with a summary of the reasons for
making the award, Provided that the Banking Ombudsman shall not award any
compensation in excess of that which is necessary to cover the loss suffered by the
complainant as a direct consequence of the commission or omission of the bank, or for an
amount exceeding rupees ten lakhs, whichever is lower.
A copy of the award shall be sent to the complainant and the bank named in the
complaint.
An Award shall not be binding on a bank against which it is passed unless the
complainant furnishes to it, within a period of one month from the date of the Award, a
letter of acceptance of the award in full and final settlement of his claim in the matter.
Within fifteen days from the date of receipt by it, of the acceptance in writing of the
Award by the complainant the bank shall comply with the Award and intimate the
compliance to the Banking Ombudsman.
The Banking Ombudsman shall report to the Reserve Bank the non-compliance by any
bank of an Award which became binding on it pursuant to sub-clause (6).

6. Rejection Of The Complaint:-
The Banking Ombudsman may reject the complaint at any stage if it appears to him
that the complaint is made without any sufficient cause or that it is not pursued by the
complainant with reasonable diligence or that prima facie, there is no loss or damage or
inconvenience suffered by the complaint.





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3.5. MISCELLANEOUS
Removal Of Difficulties:-
If any difficulty arises in giving effect to the provisions of this scheme, the Reserve Bank
may make such provision not inconsistent with the Banking Regulation Act1949 or the scheme,
as appears to it to be necessary or expedient for removing the difficulty.

















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CHAPTER 4 : AMENDMENT PASSED BY RBI FOR THE CHANGES IN
BANKING OMBUDSMAN SCHEME

Amendment 1 : RBI expands Scope of Banking Ombudsman Scheme : Includes Fair Banking
Practices. Date : 26 Dec 2005
The Reserve Bank of India today announced the revised BankingOmbudsman Scheme
with enlarged scope to include customer complaints on certain new areas, such as, credit card
complaints, deficiencies in providing the promised services even by bank sales agents, levying
service charges without prior notice to the customer and non adherence to the fair practices code
as adopted by individual banks. Applicable to all commercial banks, regional rural banks and
scheduled primary cooperative banks having business in India, the revised scheme will come into
effect from January 1, 2006. In order to increase its effectiveness, the revised Banking
Ombudsman Scheme will be fully staffed and funded by the Reserve Bank instead of the banks.
Under the revised Banking Ombudsman Scheme, the complainants will be able to file their
complaints in any form, including online. The bank customers would also be able to appeal to the
Reserve Bank against the awards given by the Banking Ombudsman. The new scheme provides
a forum to bank customers to seek redressal of their most common complaints against banks,
including those relating to credit cards, service charges, promises given by the sales agents of
banks, but not kept by banks, as also, delays in delivery of bank services. 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, as also non-acceptance of small
denomination notes and coins or charging of commission for acceptance of small denomination
notes and coins by banks. The Reserve Bank had first introduced the Banking Ombudsman
Scheme in 1995to provide expeditious and inexpensive forum to bank customers for resolution
of their complaints relating to deficiency in banking services. The Scheme was revised in
2002mainly to cover Regional Rural Banks and to permit review of the Banking Ombudsmens
awards against banks by the Reserve Bank. The Banking Ombudsmen currently have their
offices in 15 centers. 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
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fair treatment to customers are formulated by banks and adhered to. 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.

Amendment 2 : Customers can now appeal against the Banking Ombudsman's Decision.
Date: 24 May 2007
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. The Reserve Bank of India has amended the Banking
Ombudsman Scheme, 2006 to enable the customers to appeal against the Banking Ombudsman's
decision. The amendments are the RBI website. Before the scheme amended, the bank customer
could appeal only against the awards given by the Banking Ombudsman. The appellate authority
for the Banking Ombudsman Scheme is the Deputy Governor of Reserve Bank of India. It may
be recalled that in the Annual Policy for 2007-2008, the Reserve Bank had announced that based
on customer feedback, it would amend the Banking Ombudsman Scheme, 2006 to extend the
appeal option also to the decisions of the Banking Ombudsman. Originally introduced in 1995,
the Banking Ombudsman Scheme enables speedy and cost effective resolution of complaints of
bank customers relating to deficiency in bank services. TheScheme now covers all Scheduled
Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks. The
customers can also now complain to the Banking Ombudsman against deficiency in almost
any banking services, including creditcards, after exhausting the channel available with the bank
concerned for resolving their complaints. The Reserve Bank has appointed 15 Banking
Ombudsmen who are located mostly in State Capitals under the Scheme. 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.


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Amendment 3 : RBI amends Banking Ombudsman Scheme : I ncludes relating to I nternet
Banking and Non-adherence to BCSBI Code. Date : 05 Feb 2009
The Reserve Bank of India has widened the scope of its Banking Ombudsman Scheme
2006, to include deficiencies arising out of internet banking. Under the amended Scheme, a
customer would also be able to lodge a complaint against the bank for its non-adherence to the
provisions of the fair practices code for lenders or the Code of Bank's Commitment to Customers
issued by the Banking Codes and Standards Board of India(BCSBI). The BCSBI is an
independent and autonomous watch set up by the Reserve Bank to monitor and ensure that the
codes and standards adopted by the banks for rendering banking services are adhered to in true
spirit. As per the amended Scheme, the Banking Ombudsman can award compensation not
exceeding Rupees one lakh to the complainant in the case of complaints arising out of credit card
operations, taking into account the loss of the complainant's time, expenses incurred by him as
also, harassment and mental anguish suffered. Further, non-observance of the Reserve Bank
guidelines on engagement of recovery agents by banks has also been brought specifically under
the purview of the Scheme. Any customer who has a grievance against a bank can complain to
the Banking Ombudsman in whose jurisdiction the branch of the bank complained against is
located. Some banks have centralized certain transactions, like housing loans, credit cards,
etc. If there are complaints regarding such transactions, complaints would have to be made to the
Banking Ombudsman in the State in which the bank customer receives the bill. In addition, the
Reserve Bank has simplified the format for lodging complaint to the Banking Ombudsman.
Though the complainant need not lodge his complaint in a specific format, the Scheme now
provides for an easy-to-fill format for lodging complaints, in case complaints prefer to use it. The
jurisdictions of the Banking Ombudsman at Kanpur, New Delhi, Chandigarh, Chennai and
Thiruvananthapuram have been rationalized to include/exclude certain area staking into account
the geographical proximity of those areas to the Office of the Banking Ombudsman. The
amended Scheme however, does not include certain banking transactions, such as, failure to
honour bank guarantee or letter of credit, etc. Complaints on these areas of banking services are
insignificant in number.

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CHAPTER 5 : CANARA BANK
A BRI EF PROFI LE OF THE CANARA BANK
Widely known for customer centricity, Canara Bank was founded by Shri Ammembal
Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port
in Karnataka. The Bank has gone through the various phases of its growth trajectory over
hundred years of its existence. Growth of Canara Bank was phenomenal, especially after
nationalization in the year 1969, attaining the status of a national level player in terms of
geographical reach and clientele segments. Eighties was characterized by business diversification
for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking
industry. The eventful journey of the Bank has been characterized by several memorable
milestones. Today, Canara Bank occupies a premier position in the comity of Indian banks. With
an unbroken record of profits since its inception, Canara Bank has several firsts to its credit.
These include:
Launching of Inter-City ATM Network
Obtaining ISO Certification for a Branch
Articulation of Good Banking Banks 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, 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. As at June 2010, the Bank has further expanded its domestic presence, with
3057 branches spread across all geographical segments. Keeping customer convenience at the
forefront, the Bank provides a wide array of alternative delivery channels that include over 2000
ATMs- one of the highest among nationalized banks- covering 732 centres, 2681 branches
providing Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere
Banking' services. Under advanced payment and settlement system, all branches of the Bank
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have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds
Transfer (NEFT) facilities.
Not just in commercial banking, the Bank has also carved a distinctive mark, in various
corporate social responsibilities, namely, serving national priorities, promoting rural
development, enhancing rural self-employment through several training institutes and spear
heading financial inclusion objective. Promoting an inclusive growth strategy, which has been
formed as the basic plank of national policy agenda today, is in fact deeply rooted in the Bank's
founding principles. "A good bank is not only the financial heart of the community, but also one
with an obligation of helping in every possible manner to improve the economic conditions of
the common people". These insightful words of our founder continue to resonate even today in
serving the society with a purpose. The growth story of Canara Bank in its
firstcentury was due, among others, to the continued patronage of its valuedcustomers, stakehold
ers, committed staff and uncanny leadership abilitydemonstrated by its leaders at the helm of
affairs. 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". This justifiable belief is founded on strong fundamentals, customer centricity,
enlightened leadership and a family like work culture.
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, he said. According to him, most complaints are regarding ATM cards, delay in
sanctioning housing loans, delay in transfer of accounts and pension-related issues. There are
about three complaints a day now, he pointed out, adding that the bank will try to solve issues
with a 72-hour turnaround time. The centralized customer service cell currently has three
members, in addition to separate cells in each circle office of the bank.The six sites that we
have identified are not exhaustive, and the circle should monitor such other sites for taking
further action on matters regarding our bank said Mr. Pai, adding, We are in a services
industry, and the attempt is to convince the customer that we are sensitive to their requirements.

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I nteraction with customer:
Customer's expectation/requirement/grievances can be better understood through
personal interaction with customers by Bank's staff. 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. Many of the complaints arise on account of lack of awareness
among customer about bank services and such interactions will help the customers appreciate the
banking services better. The feedback from customers would be a valuable input for revising our
product and services to meet customer requirements.
Sensitizing the operating staff on handling complaints:
Our staff will be properly trained for handling complaints. 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. 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.
Canara Banking scheme:
1. We have displayed on our website and in all our Branches a notice explaining that we are
covered by the Banking Ombudsman Scheme, 2006 of the Reserve Bank of India . The copy
of the scheme is made available at all the branches and will be issued to customers at a
nominal charge.
2. Within 30 days of lodging a complaint with us, if customer does not get a satisfactory
response from us and if customer wishes to pursue other avenues for redressal of grievances,
customer may approach Banking Ombudsman appointed by Reserve Bank Of India under
Banking Ombudsman Scheme, 2006. Salient features of the Banking Ombudsman Scheme,
2006 are displayed in the branch notice boards and the scheme itself is displayed on our
Website www.canarabank.com. If customers face any difficulty our Staff will explain the
procedure in this regard.

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I nternal Machinery to handle customer complaints/grievances:
1. 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

2. The Bank will inform customers where to find details of procedures for handling complaints
fairly and quickly.
3. If the customer complaint is received in writing, we will endeavour to send an
acknowledgement/a response within a week. 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.
4. 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 30days of receipt of complaint and will
tell customers to take their complaint further if they are still not satisfied.

COMPLAI NT REDRESSAL MECHANI SM I N CANARA BANK
I . 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. He/she would be responsible for ensuring closure of
all complaints received at Branches. 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, then he
shall be provided with alternate avenues to escalate * the issue if the same is not resolved within
the stipulated period. 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.
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Similarly, 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. Suggestion Box and
complaint Book are provided in all the branches. Any written complaint is instantly and
promptly acknowledged.
All branches other than small branches have " May I help you counters ".
Counter staff are provided with training and additional inputs.
If counter staff/Supervisor is unable to resolve a grievance, the branch in-charge
intervenes and tries to resolve the issue.
Customers' Day is observed on 15 th of every month. On this day branch in-charge will
make himself available at the branch between 3 p.m. and 5p.m. to meet customers
without any prior appointment.
Customer Service Committee meetings is held every month at all branches, Circle
Offices.
Committee is to find out ways and means to render service to the satisfaction of the
customers.
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.
Special Customers' Meet is conducted on special occasions.
Every year, 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.

I I . At Regional Office/Circle Office
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.
Whenever it is not possible and more cross checking is required, steps are taken to settle
the matter within a reasonable time.
Divisional Managers(O) / Assistant General Manager(O) visit branchesperiodically and
submit a report on Customer Service, as per the detailed checklist
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Divisional Manager / Assistant General Manager in-charge of Customer Service
Section, Regional office / Circle Office contact the aggrieved customers as and when
necessary, meet him personally with the Branch Manager, for ensuring timely redressal
of the complaint.
Wherever deficiencies are noticed, accountability is fixed and erring employees punished.
Still there may be some aggrieved customers who write to Head office.

I I I . At Head Office
A full-fledged Customer Service Section is functioning at M&CRM Wing,Head Office,
overseen by General Manager.
An acknowledgement is sent to the customer immediately on receipt of the complaint.
Thorough analysis of the complaints is done and necessary instructions are given to
CO/RO/ Branches for speedy redressal and followed up till final redressal letter is sent to
the complainant duly explaining the decision taken on the complaint.
On 15 th of every month, Customers' Day is observed between 3 p.m. and5 p.m. during
which our overseeing.
Executives are available for meeting the public / Customers without prior appointment.
Special Customers' Meets are organised for different segments of the market, viz.,
Exporters, SSI, NRI, Agriculturists, etc.
Customer Satisfaction Surveys through In-house as well as by External agencies are
conducted to assess the level of customer satisfaction.

I V. 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 Branch-in-charge will analyse the complaint and if need be he/she will contact the
complainant personally and resolve the complaint.
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A complaint redressal letter will be sent to complainant, if the complaint is resolved at
Branch level. The Branch will also send the details of the grievance received by the at
periodical intervals to Regional Office/Circle Office.
If the Branch-in-charge is not able to resolve the complaint within 7 days, the complaint
will be referred by the Branches to the concerned Regional Office/Circle along with their
comments / replies for further action.
The complaints referred to Regional Office/Circle Office will be analysed by Customer
Service Section and based on the explanation received from the Branch, RO/CO will send
a suitable reply to complainant.
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, the same will be referred to Customer Service Section,
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, Head Office along with their
comments/replies.
Customer Service Section, Head Office will analyse the complaint and the replies
received from Branch and Regional Office/Circle Office. On placing the matter before
appropriate authorities a decision is taken on the complaint. A complaint redressal letter
is sent to the complainant from Head Office and suitable instruction are passed on to
Branch, Regional Office, Circle Office for taking action in the deficient areas.

COMPLAI NTS/ GRI EVANCES:
I . Customer Service Committee of the Board
This sub-committee of the Board would be responsible for formulation of a
Comprehensive Deposit Policy in corporating the issues such as the treatment of death of a
depositor for operations of his account, the product approval process and the annual survey
of depositor satisfaction and the tri-enniel audit of such services. The Committee would also
examine any other issues having a bearing on the quality of customer service rendered. This
Committee would also review the functioning of standing committee on customer service.
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The Customer Service Committee of the Board is responsible for the rendering of
customer service to the individual, both as a depositor and also as a borrower. The committee
is, therefore, responsible for examining loan policies and service issues for the individual as a
borrower also.

I I . Standing Committee on Customer Service
The Standing Committee on Customer Service will be chaired by the Managing
Director/ Executive Director of the Bank. 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.
Evaluate feed-back on quality of customer service received from various quarters. The
committee would also review comments/feedback on customer service implementation
of commitments in the Code of Banks Commitments to Customers received from
BCSBI.
The Committee would be responsible to ensure that all regulatoryinstructions regarding
customer service are followed by the bank. Towards this, the committee would obtain
necessary feed-back from zonal/regional managers/ functional heads.
The committee also would consider unresolved complaints/grievancesreferred to it by
functional heads responsible for redressal and offer their advice.
The committee would submit report on its performance to the customer service
committee of the board at quarterly intervals.

TI ME FRAME
Complaints received will be seen in right perspective and will be analyzed from all
possible angles. Specific time schedule is set up for handling complaints and disposing them at
all levels including branches/Regional Offices/Circle Offices and Head Office. The Branch
Manager will try to resolve the complaint within specified time frames decided by the Bank.

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CHAPTER 6 : CASE STUDY
6.1 COMPENDIUM OF CASE HANDLED BY THE BANKING
OMBUDSMAN OFFICE SUBJECT
SUBJECT: REFUSAL TO CLOSE THE ACCOUNT
COMPLAI NT NO. 1
Complaint in brief:-
X the complaint, had issued cheque dated 20.10.2004 for Rs.5,00,000/- (Rupees Five
lakhs only) to their supplier and mentioned the suppliers account No. on the reverse side of the
Cheque. The cheque was deposited in the drop box of ABC Bank, on 22.10.04 at about 10.30
a.m. Technique was taken out of the drop box by a miscreant who opened current account in the
name of the supplier with Y Bank on 24.10.04 (Sunday). As per the records of Y Bank, the
supplier was a proprietary concern owned by one Mr. Z. The bank contended that the opening of
account was supported by proof of addresses submitted by the customer. Thus the account was
duly introduced with sufficient proof of address. Y Bank confirmed having observed the KYC
norms.
Decision by ombudsman:-
The person giving introduction should be of some standing and have an account with 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. In the instant case, the
introducers account was less than 6 months old. There is no record to show that efforts were
made to verify the authenticity of the existence of account opened firm.
In the case of Kerala State Co-operative Marketing Federation v/s State Bank of India
and others, the Supreme Court of India has spelt out the principles 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, as against the true owner of
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a cheque/draft, in the event the customer from whom he collects the cheque or draft has no title
or a defective title. The banker, however, 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,1881, and one of those conditions is that he must have received the
payment in good faith and without negligence. It is the banker seeking protection who has on his
shoulders the onus of proving that he acted in good faith and without negligence.
Negligence is a question of fact and what is relevant in determining the liability of a
collecting banker is not his negligence in opening the account of the customer but
negligence in the collection of the relevant cheque unless, of course, 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.
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, though not conclusive,
proof of negligence particularly if the cheque in question has been deposited in the account soon
after the opening thereof.
It may be noted that Y Bank opened the account in the name of the supplier on 24th
October 2004. The cheque for Rs.5,00,000 issued by the complaint was deposited in the account
on 25,10.2004. The value of the cheque was credited on 27.10.2004. Rs.3,00,000 was drawn in
the morning of 29.10.2004 and Rs.1,80,000 drawn in the afternoon. The Y Bank was negligent in
opening the account in the name of the complaint allowing the depositor to immediately draw
Rs.4,80,000/- out of Rs.5,00,000/-. 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. Y Bank was
found to be deficient in opening the current account without proper introduction and verification,
thereby enabling the accountholder to open the account, deposit the cheque and draw major
portion of the cheque proceeds in quick succession.
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COMPLAINT NO. 2
Complaint in brief:-
The complainant having a savings bank account with the subject bank found that
there was an unauthorized debit of Rs. 15000 in his account. On enquiry with the bank, they
informed that it purported to the ATM transactions made by him. The complainant claimed that
he had not withdrawn any amount on that day. The debits were made by the bank after six
months without intimation to the complaint. The complaint requested to restore the unauthorized
debit made by the bank.
Decision by ombudsman:-
The Banking Ombudsman perused the documentary evidence for ATM transactions
produced by the bank, which contained the ATM card number and his account number. As
nobody other than the card holder can operate the ATM and withdraw money, his argument that
he was not aware of the ATM transactions made by him cannot be accepted. 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, the card holder has
undoubtedly made the three ATM cash withdrawals of Rs,.5000/- each.

COMPLAINT NO. 3
Complaint in brief:-
The complainant was having a Saving Bank Account. with the opposite party bank.
Being an employee of TCS, his salary and other allowances were being directly credited to his
account with the bank. 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. The total amount so
fraudulently withdrawn from his account amounted to Rs.977,000/-. A police complaint was also
filed.
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Decision by ombudsman:-
The subsequent developments after filing of the police complaint and the opinion given
by the GEQD, leads to an irrefutable conclusion that the culprits had made fraudulent
withdrawals by forging the signature of the complaint. In the circumstances, prima facie forgery
had been established. Legally if the drawers cheque is forged or unauthorised, however clever
the forgery is, the banker cannot debit his customers account in case he pays the sum unless he
establishes adoption or estoppel. The complainant was out of India during the material time. 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.

6.2 REAL LIFE CASES SOLVED BY BANKING OMBUDSMAN
As per the Banking Ombudsman Annual Report 2009-2010, ombudsmen have resolved
thousands of cases and helped common man get justice. I would say, this is a great way to raise
your voice and show banks that they cant take you for granted, just because they are bigger than
you in size. A customer has to be treated as per the guidelines, and customer service is the
critical part of any service provider. Just to give you some idea, the Banking Ombudsman annual
reports how cases around 57 different real life cases of how it has helped customers get justice
(Page 57-73) . I am highlighting four of those live cases below:-
1. How a person got compensation of Rs. 16,200 because he got less money from ATM:-
The complainant maintained an account with AB Bank. He withdrew an amount of
Rs. 500 from the ATM of DH bank on July 28, 2009. The cash dispensed by the machine
was only Rs. 400. However, his account was debited by Rs. 500. The amount of Rs. 100 was
credited back to his account only on January 27, 2010(Around 162 days late) & despite
lodging the complaint immediately, no penalty was paid to him as per the instructions issued
by DPSS, vide its circular dated July 17, 2009. Since the bank had delayed in affording the
credit to the complainants account by more than five months, the BO directed the bank to
pay the penalty amount of Rs.16,200 for the delayed period (Rs 100 for each 162 days) .
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2. How a credit card holder got Rs. 10,000 in compensation for non- updation of
CI BI L records:-
One credit card holder complained about the banks claim against his settled credit
card account dues, and non-updation of his status with CIBIL. The bank accepted that
although the credit card account was settled three years ago, the status of the account could
not be updated in the records of the bank with CIBIL (See a related example) , which
was rectified subsequently. Clear negligence was observed on the part of the bank for
not updating their records for more than three years, resulting in undue harassment to the
complainant. The bank was directed to pay an amount of Rs. 10,000 to the complainant as a
token compensation for the violation of BCSBI Codes. The Branch Manager assured him
to provide the loan without delay. However after three months the branch returned all the
papers stating that the Loan Disbursement Officer was ill because of which they were unable
to provide the loan. With the intervention of BO, it was agreed by both the parties, that the
complainant would resubmit the loan application and the bank would consider the same
again. Moreover, since the complainant had lost Rs. 5000 which had been paid as registration
fee to the Institute, the bank agreed to pay Rs. 5000 as a token compensation and another Rs.
5000 as a service gesture. The education loan was sanctioned subsequently by the bank and
the student got admitted to the MBA course in the same business school.

3. How a senior citizen claimed Rs. 1 lakh in compensation for Harassment regarding the
loan he never took:-
Even though the complainant had no business relationship with ABC bank, he was
getting calls/SMS from the recovery agents using abusive language & demanding repayment
of some loans which he had never taken. Several complaints to the bank against this
harassment calls fetched no effect. The bank pleaded to the BO that the telephone numbers
from which he was getting the abusive calls did not belong to any of their recovery agents.
Based on this, the BO closed the case under clause13(d) of BO Scheme (i.e. complaint
without any sufficient cause).As the complainant continued to get the harassment calls, he
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S.I.E.S COLLEGE OF COMMERCE AND ECONOMICS, SION 37

went in appeal. During the appeal, the bank admitted that the phone numbers from which he
was getting abusive harassment calls belonged to their recovery agents and that they had
since taken necessary corrective action to discontinue such calls. The AA observed that the
bank had not conducted proper due diligence while sanctioning the loan to some third person
indicating a major KYC lapse. To cap it all, the bank had misguided the BO resulting in the
BO pronouncing a wrong order, damaging the credibility of the BOS. The AA set aside the
decision of the BO and directed the bank to pay the appellant Rs. 1 lakh towards
compensation.

4. How a person got Rs. 6,500 as interest for Failed ATM transaction:-
In a case of failed ATM transaction where the account was debited though no cash
was dispensed it was observed that as per BOs orders the amount was credited to
complainants account, but the bank did not pay the penal interest in terms of extant RBI
instructions for the delayed period credit of approximately 2 months. The bank was directed
to pay penalty at Rs. 100 per day amounting to Rs. 6500.










Banking Ombudsman

S.I.E.S COLLEGE OF COMMERCE AND ECONOMICS, SION 38

CHAPTER 7 : CONCLUSION
Though the Banking Ombudsman Scheme was introduced in the year 1995, with a view
to do away with the banking customer complaints, the scheme was amended in subsequent year
of 2002 and 2006. But the banks do not seem to have adopted the norms for their efficient
functioning, that is the reason behind the increasing consumer cases against the banks, which are
governed under the scheme. In the system of Banking Ombudsman, the results are delivered
very soon, the procedures are fair together with cost, and proportionate to the nature of the issues
involved. The system deals with cases at reasonable speed, is understandable to those who use it,
is responsive to the needs of those who use it, and provides as much certainty as the nature of
particular cases allows. This is true because over the past five years nearly 36000 complaints are
being resolved by the Banking Ombudsman under this Banking Ombudsman Scheme. 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. There as on is they are well
popular among the common public which is lacking with the banking ombudsman and its
working. 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 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.






Banking Ombudsman

S.I.E.S COLLEGE OF COMMERCE AND ECONOMICS, SION 39

RECOMMENDATIONS

In the system of Banking Ombudsman, the results are delivered very soon, the procedures are
fair together with cost, and proportionate to the nature of the issues involved.
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.
An institution that receives and deals with disputes related to banking and financial services.
Examples of complaints an ombudsman might handle include non-payment of a check and
refusal to honor a duly issued letter of credit. Banking ombudsman services exist in countries
like the United Kingdom and India, though other nations have similar organizations.
The Reserve Bank may appoint one or more of its officers in therank of Chief General
Manager or General Manager to be known as Banking Ombudsmen to carry out the functions
entrusted tothem by or under the Scheme. The appointment of BankingOmbudsman under
the above Clause may be made for a period not exceeding three years at a time.
The listed companies and registered stock intermediaries have to disclose the name address
and other particulars of ombudsman in their for the benefit of the investors.
The government is considering creating an office of Income Tax Ombudsman to protect
individual taxpayers right. The Ombudsman will identify issues that increase the compliance
burden or create problems for taxpayers and bring those issues to the attention of the ministry
of Finance.
The Insurance Ombudsman has started functioning from 1999, to provide for efficient, cost
effective and impartial settlement of claims and grievance of any person against a Life
General Insurance in Public and private sector.




Banking Ombudsman

S.I.E.S COLLEGE OF COMMERCE AND ECONOMICS, SION 40

BIBLIOGRAPHY

BOOKS:-
Indian Banking in New Millennium
- G.V.R Manian

Banking Development In India
-Niti Bhasin

Banking Theory and Practice
- K.C. Shekhar and Lekshmy Shekhar

WEBSI TES:-
www.indiatimes.com
en.wikipedia.org/wiki/banking Ombudsman.
www.banknetindia.com/banking/cintro.html.
http://www.scribd.com/doc/109803073/Banking-Ombudsman
http://www.scribd.com/doc/164848713/Baking-Ombudsman