M K Jain
Deputy Governor & Appellate Authority

FOREWORD

The Banking Ombudsman Scheme (BO Scheme) was introduced in 1995 as a cost free and expeditious grievance redressal mechanism for customers of banks and has over the years, gained traction. This is reflected by consistently rising number of complaints being handled by the Offices of Banking Ombudsman (OBOs). During last three years, volume of complaints rose at an average annual rate of about 25%, recording a total of 163,590 complaints in 2017-18. I am happy to note that BOs could dispose over 96% of these complaints during the year.

In its endeavor to ensure consumer protection, several measures were introduced by Reserve Bank in 2017-18. The BO Scheme was revised to enhance the powers of BOs by removing the pecuniary limit of ₹1 million on the Award that BOs can pass and doubling the amount of compensation for loss that can be granted to ₹2 million. The Scheme was updated to include grievances relating to mobile/electronic banking and mis-selling as grounds of complaint. Another significant measure taken in 2017-18 was the mass public awareness campaign launched by the Reserve Bank during the year through mobile, print and electronic media against fictitious offers of money and phishing/vishing calls made by miscreants who persuade innocent customers to share OTP and other confidential information for cheating them.

A second Office of Ombudsman was set up at Mumbai to address the challenge of increasing volume of complaints. Towards this endeavor, a project for development of comprehensive web-based Complaint Management System for integrated processing of complaints received in RBI from all sources and channels was also set into motion during 2017-18.

The success of the BO Scheme provided impetus for launching of an Ombudsman scheme on similar lines, for the customers of select categories of Non-Banking Financial Companies (NBFCs). This Scheme has been initially operationalized for deposit-taking NBFCs and based on experience gained, will be extended to other eligible NBFCs. Keeping in view the rising volume and pace of electronic financial transactions and the related emerging risks for consumers, Reserve Bank initiated steps to formulate a separate Ombudsman Scheme for digital transactions. With a view to further strengthen the internal grievance redressal mechanism in banks, RBI issued Internal Ombudsman Scheme, 2018 (IO Scheme) under Section 35 A of the Banking Regulation Act, 1949. It aims at ensuring greater autonomy for the IOs while strengthening the mechanism for monitoring the implementation of the Scheme through internal audit and enhanced supervisory oversight.

The Annual Report, 2018 through its delineation of the functioning of the BO Scheme during 2017-18, reflects the changing landscape of the financial sector. The report also touches upon the Way Forward, particularly about formulating a separate Ombudsman Scheme for Digital transaction, developing a system for online resolution of disputes as well as capacity building of the OBOs to facilitate efficient and effective management of the rising volume of complaints.

(M K Jain)

Vision and Goals of the
Office of the Banking Ombudsman

Vision

• To act as a visible and credible dispute resolution agency for common persons utilising banking services

Goals

• To ensure grievance redressal of users of banking services in an inexpensive, expeditious and fair manner that provides impetus to improve customer services in the banking sector on a continuous basis

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

• To enhance 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 capacity building

EXECUTIVE SUMMARY

Background

The Banking Ombudsman Scheme was notified by the Reserve Bank of India (RBI) in 1995 under Section 35 A of the Banking Regulation Act, 1949. As on date, Scheduled Commercial Banks, Scheduled Primary Urban Co-operative Banks and the Regional Rural Banks (RRBs), Small Finance Banks and Payment Banks are covered under the Scheme. It is administered by the RBI through 21 Offices of Banking Ombudsman (OBOs) covering all states and union territories.

Complaints handled by Banking Ombudsman (BO) - Brief Analysis

2. A brief analysis of complaints handled by BOs during the year is as under:

1. The OBOs received a total of 163,590 complaints in 2017-18 thus recording a year on year (Y-o-Y) increase of 24.9%. Of these, 64% were received electronically i.e. through the online portal or by emails;

2. Although the OBOs handled¹ 28% more complaints in 2017-18, the disposal rate was 96.5% as against 92% in 2016-17;

3. There was a marked increase in the number of complaints resolved by agreement i.e. through mediation, which rose from 42.43% during the previous year to 65.82% in 2017-18;

4. The major grounds of complaints received during the year were non-observance of fair practices code (22.1%), ATM and debit card issues (15.1%), credit card complaints (7.7%), failure to meet commitments (6.8%), mobile and electronic banking (5.2%);

5. Complaints received on grounds such as problems relating to ‘Pension’, ‘Levy of Charges without Notice’, ‘Loans and Advances’, ‘Remittance’, ‘DSA and Recovery Agents’ and ‘Mis-selling’ each accounted for 5% or less of the total complaints received;

6. With the expansion of the grounds on which appeals can be filed against the decision of BOs, there was eightfold increase in the number of appeals (125) received in 2017-18, as compared to 2016-17 (15).

7. The average cost of handling a complaint came down from ₹ 3,626/- in 2016-17 to ₹ 3,504/- in 2017-18 due to increase in efficiency and economies of scale.

Developments during the Year

3. The significant developments during 2017-18, are summarized below:

i. Revision of Banking Ombudsman Scheme, 2006: Keeping in view the changing profile of complaints, the Scheme was revised to include mis-selling, as also electronic and mobile banking related grievances as valid grounds of complaints. The ceiling of ₹1 million on the pecuniary jurisdiction of BOs, i.e. on the maximum amount of loss on which the BOs pass the award was removed, thereby enabling the BOs to entertain complaints and give their decision regardless of the amount involved in the dispute. The amount of compensation that BOs can award, in addition to the disputed amount, was increased from ₹1 million to ₹2 million and compensation of ₹0.1 million, towards harassment and mental anguish (previously available only to credit card complaints), was extended to all complainants. The scope for a complainant to prefer an appeal was enhanced by making, the Clause “requiring consideration of elaborate documentary and oral evidence’’ used for closure of cases by BOs, as appealable.

ii. Opening of New Office of Ombudsman: A second office of the Banking Ombudsman was operationalized at Mumbai with a view to reduce the turnaround time in disposal of the increasing number of complaints. With this, the total number of OBOs went up to 21².

iii. Strengthening Internal Grievance Redressal in banks: As a step towards strengthening the internal grievance redressal system in banks, the functioning of Internal Ombudsman (IO) mechanism, mandated by the RBI in 2015, was revisited and a revised ‘Internal Ombudsman Scheme, 2018’ was issued under Section 35 A of Banking Regulation Act, 1949. The coverage of the IO Scheme was extended (from PSBs and eight select private and foreign banks) to all Scheduled Commercial Banks (other than Regional Rural Banks), having 10 or more banking outlets in India.

iv. Awareness Programmes: During the year, the OBOs organised Town Hall Events (26), awareness programmes/outreach activities (129) and several advertisement campaigns, particularly in rural and semi-urban areas for spreading awareness about the Scheme. RBI’s SMS handle ‘RBISAY’ was extensively used for sending text messages on topics such as fictitious offers of money, secured use of electronic banking facilities, BO Scheme, etc. An Integrated Voice Recognition Service facility (by giving a missed call on 14440) was also made available to public by RBI for getting more information on the above.

v. Leveraging Technology: To address the challenge of increasing volume of complaints and enable their faster resolution, RBI is developing an integrated web-based Complaint Management System for automating the process of handling complaints received in RBI from all sources and channels. A System Integrator for this project has been appointed and the project is expected to be rolled out during the year 2018-19.

vi. Ombudsman Scheme for customers of NBFC: Taking forward the success of the BO Scheme, Ombudsman Scheme for the customers of deposit-taking NBFC was implemented.

Way Forward

4. i) In order to handle the rising number of complaints with respect to financial transactions conducted through digital mode, Ombudsman Scheme for digital transactions is proposed to be formulated and implemented during 2018-19.

ii) Keeping in view the increasing complexity, pace and volume of banking products/ transactions, measures will be taken for capacity building of the staff of OBOs, as also those handling customer complaints in banks, to enhance their understanding of the intricacies of various types of cases as well as to evolve greater uniformity in the processing of complaints. This will also be facilitated by the implementation of the proposed Complaint Management System which, inter alia, is envisaged to provide capability for end-to-end Online Resolution of Disputes (ORD).

iii) The functioning of the NBFC Ombudsman Scheme which was implemented in February 2018 would be reviewed and scope of extending the Scheme to include NBFCs with asset size of over ₹1 billion and having public interface, would be considered.

Chapter 1

The Banking Ombudsman Scheme

The Banking Ombudsman Scheme was notified by the Reserve Bank of India (RBI) in 1995 under Section 35 A of the Banking Regulation Act, 1949. Over the years, it has evolved and has undergone five revisions since its inception, the last being in July 2017. As on date, Scheduled Commercial Banks, Scheduled Primary Urban Co-operative Banks and the Regional Rural Banks (RRBs), Small Finance Banks and Payment Banks are covered under the Scheme. It is administered by the RBI through 21 Offices of Banking Ombudsman (OBOs) covering all states and union territories of India. The cost of running the Scheme, which includes revenue and capital expenditures³ on administration is borne by the RBI.

1.2 Over the years, the Scheme has gained wide acceptance and popularity as reflected by the year on year increase in the number of complaints received at the OBOs.

1.3 In tune with the changing landscape of banking, the Scheme was revised to include mis-selling and mobile / internet banking related grievances as new grounds of complaints. In the first year itself, complaints relating to internet / mobile banking accounted for 5.2% of total complaints received by BOs during the period. However, complaints related to mis-selling received during the year were few and their share stood at only 0.4% of total complaints.

1.4 As a part of the revision of the Scheme, BOs became authorized to handle complaints irrespective of the amount involved, by lifting the restriction (of ₹1 million) on the pecuniary jurisdiction of BOs. BOs were also empowered to award a higher compensation of ₹2 million for losses arising out of deficiency in service vis-à-vis ₹1 million earlier. A compensation of ₹0.1 million towards harassment and mental anguish, which was previously available only to credit card complaints was extended for all complainants. Further, by making the Clause ‘’requiring consideration of elaborate documentary and oral evidence’’ appealable, the scope for a complainant to prefer an appeal, against the decision of the BO was also increased as an additional measure of customer protection. The number of appeals received increased from 15 in 2016-17 to 125 during the year under review, reflecting the significance of this revision.

1.5 In order to bring down the turnaround time in the disposal of the increasing number of complaints, a second office of the Banking Ombudsman was set up at Mumbai. The territorial jurisdiction of this new office extends to Goa and Maharashtra excluding the districts of Mumbai, Mumbai Suburban and Thane. The total number of OBOs now stands at 21.

1.6 During the year, the average cost of handling a complaint came down from ₹3,626/- to ₹3,504/- due to increase in the number of complaints and economies of scale. The decline in the average cost of handling a compliant during the last three years is evident from Chart I below:

A comparative position of cost of running the Scheme as well as the average cost per complaint during the last three years is given at Appendix I.

The OBO-wise per complaint cost for the year 2017-18 is given at Appendix II. Considering the fixed costs involved, the offices having fewer complaints mostly show higher cost per complaint.

1.7 A record 174,805 complaints were handled by OBOs in 2017-18, of which 96.5% were disposed during the same period and 3.5% remained pending as on June 30, 2018. The position of customer complaints handled by OBOs is given at Appendix III.

1.8 In addition to handling the disposal of cases, the BOs also sought to spreading awareness about the Scheme by organising Town Hall events, awareness programmes / outreach activities particularly in rural and semi-urban areas. In this direction, advertisement campaigns were launched by BOs besides participating in trade fairs etc.

Chapter 2

Analysis of Complaints

2.1 A comparison of the number complaints received by OBOs during the last three years is given in Chart II.

2.2 In 2017-18, the number of complaints received by the BOs increased by 24.9% as compared to a rise of 27.3% in 2016-17(Appendix IV). The upward trend could, inter alia, be attributed to the increase in the number of bank customers and the impact of initiatives for spreading awareness taken by RBI, including through TV channels, FM Radio, SMS handle viz., “RBISay” as well as the efforts made by OBOs at the regional levels.

Receipt of Complaints

2.3 During the year, the number of complaints received by the OBOs stood at 1,63,590. OBO-wise receipt of complaints is at Appendix V. OBO New Delhi received the maximum number of complaints (26,653), which accounted for 16.3% of the total complaints received. Last year too, the same OBO had received the highest number of complaints. Together with the recently opened OBO, New Delhi II, the total number of complaints handled by the two offices at New Delhi stood at 35,737 representing 21.8% of total complaints received during the year.

2.4 OBO Kanpur witnessed a sharp increase of 63% in the number of complaints received during 2017-18. A significant increase in the number of complaints was also observed in the four recently opened OBOs viz. Dehradun, New Delhi II, Raipur and Ranchi. A comparative position of complaints received by OBOs during the last three years is given in Chart III.

Zone-wise Distribution of Complaints

2.5 The North zone received the maximum share of complaints (44%) while East Zone accounted for only 15% of total complaints received. The zone-wise distribution of complaints received is depicted in Chart IV below.

Zone-wise receipt of complaints is given at Appendix VI. It may be observed therefrom that the maximum Y-o-Y growth in the number of complaints was also observed in the North zone (33.4%), followed by East zone (31.5%), South zone (21.1%) and West zone (9.7%) respectively.

Population Group-wise Distribution of Complaints

2.6 During the year, 50% of the total number of complaints were lodged by bank customers residing in urban areas, while 12% were received from those in rural areas. The latter grew by 18% over last year which could be attributed, inter alia, to increased awareness about the Scheme. However, the number of complaints filed by customers of banks residing in semi urban and rural areas taken together accounted for only 23% of total complaints, highlighting the need for increasing the awareness levels of people residing in these areas. Population group-wise distribution of complaints during the last year is given in Chart V below and at Appendix VII.

Modes of Receipt of Complaints

2.7 Complaints were received in the OBOs through various modes, including hand delivery, post, courier, fax, e-mails and online portal i.e. the department’s Complaint Tracking System (Appendix VIII). A comparison of the various modes through which complaints were received during the last three years is shown in Chart VI below:

2.8 The trend in the last three years indicates that complainants are increasingly moving towards using email and online portal from the previously predominant physical mode of lodging complaints. During the year, 64% of the complaints were filed using the digital mode of which 49% were through e-mails and 15% using the online portal. The trend during the last three years is given in Chart VII below.

Complainants: Group-wise Classification

2.9 Out of the total number of complaints lodged, 92.1% were by individuals, of which, 1.3% were by senior citizens. Due to the persistent efforts by RBI, including the advertisement campaign along with the issuance of a circular advising banks to meet the specific needs of senior citizens, the number of complaints filed by this group has been increasing steadily over the past three years from 1,569 (in 2015-16), to 1,745 (2016-17) and 2,098 (2017-18) as detailed at Appendix IX.

Bank Group-wise Classification

2.10 The bank-group wise classification of complaints received by OBOs during the last three years is indicated in Chart VIII.

Of the total number of complaints received in OBOs, nationalised banks and SBI taken together accounted for 63% as detailed at Appendix X. There was an increase of 31% in complaints received against SBI during the year, one of the major reasons being the merger of associate banks with SBI. The share of Foreign banks stood at 2% while that of Private Sector banks was 26% of total complaints received. The RRBs and Scheduled Primary Urban Cooperative banks together accounted for 1.97% of total number of complaints. The complaints against the new entities viz., Payment and Small Finance banks stood at 0.03%. Almost 7% of the complaints were against entities that are not covered under the Scheme.

Nature of Complaints Handled

2.11 As specified under Clause 8 of the Scheme, there are 30 grounds for lodging complaints with the BO. Table 1 below broadly indicates the proportion of complaints received under the various grounds of complaints listed in the Scheme.

2.12 The ground of complaint, ‘Non-observance of Fair Practice Code’ continued to account for the highest share (22.1%) of complaints received in OBOs. This, along with the other grounds i.e. ‘Failure to Meet Commitments’ and ‘Non-adherence to BCSBI Codes’, constituted 31.3% of the total complaints. Focused action by banks is necessary in this regard in order to ensure that the staff, especially at customer touch points are equipped with requisite skills and are adequately trained.

2.13 Complaints relating to ATM / Debit Cards comprised 15.1% of total complaints marking an increase of 50% over last year. Of the total number of ATM / Debit Cards complaints, a major sub-category was ‘Account debited but cash not dispensed by ATMs’ which accounted for almost 60% of the ATM related complaints (Table 2).

2.14 ‘Non-adherence to RBI instructions on Mobile / Electronic Banking’ was included as a ground of complaint in the revised Scheme in July 2017. During the first year of inclusion, 5.2% of the complaints were received on this ground.

2.15 Of the 7.7% of the credit card related complaints received during the year, 30% pertained to wrong billing / debits, 8% to wrong / delayed reporting / non-updating credit status with credit information to Credit Information Bureau and 5% to threatening calls / inappropriate approach of recovery agents.

2.16 The complaints relating to digital transactions (mobile, internet, ATM and credit cards) accounted for 28% of total complaints, registering a rise of 9% over the previous year.

The increasing utilization of digital modes of transactions and consequent rise in such complaints coincides with the issue of RBI instructions on ‘Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ issued on July 6, 2017 and the intensive awareness campaign in this regard, launched through print and electronic media during the year under review.

2.17 ‘Non-adherence to Reserve Bank guidelines on para-banking activities like sale of insurance / mutual fund / other third-party investment products by banks’ was also included as a ground of complaint in the revised Scheme in July 2017. Only 0.4% of the complaints pertained to this ground.

2.18 During the year, 4.8% of the complaints related to ‘Pension Payments’. The number of complaints in this category has come down both in absolute and in percentage term, inter alia, due to the continued efforts of RBI, including the issuance of circulars (to all agency banks dealing with pension payments), to provide considerate and sympathetic customer service to pensioners and holding meetings for sensitising banks, advising them to give special attention to this class of customers etc.

2.19 Complaints on ‘Levy of Charges without prior notice’ constituted 5% of the total complaints but on a year-on-year basis it witnessed an increase of 13%. Levying charges for non-maintenance of minimum balance, processing fees, pre-payment penalties in the guise of loan takeovers by the other banks are some of the causes for complaints under this ground. Banks need to analyse the root cause and patterns of such complaints for taking corrective actions.

2.20 During the year, 4.1% of complaints pertained to ‘Deposit Accounts’ and were mainly on grounds of delay in credit, non-credit of proceeds to party’s account, non-payment of deposit or non-observance of the RBI directives, if any, applicable to rate of interest on deposits in savings, current or other accounts, etc.

2.21 Complaints relating to ‘Loans and Advances’ constituted 3.8% of the total complaints and generally pertained to delay in sanction, disbursement, non-observance of prescribed time schedule for disposal of loan applications, non-acceptance of application without valid reason, etc.

2.22 In 2017-18, 2% of the total complaints related to ‘Remittances’ such as non-payment/ inordinate delay in the payment or in the collections of cheques, drafts, bills etc.

2.23 OBOs also received complaints which were ‘Out of Purview’ of the Scheme and were closed as non-maintainable. During the year, 3.5% of the complaints were ‘Out of Purview’ of the Scheme, which were marginally less than those in the previous year (4.8%).

2.24 Nearly 16% complaints fell under ‘Others’ category and related to complaints on ‘Non-adherence to Prescribed Working Hours’, delay in providing banking facilities, etc. as detailed in Table 3.

2.25 During the current year, the OBOs handled an all-time high of 174,805 complaints (an increase of 28% from the last year) of which 96.5% were closed. Table 4 below indicates a comparative position of disposal of complaints by OBOs.

The OBO-wise position of complaints disposed during the year 2017-18 is given at Appendix XI.

2.26 In 2017-18, 48.9% of total complaints were closed as Non-Maintainable⁴ as compared to 52.3% during the previous year. This decline can be attributed to increased awareness amongst common people as a result of the numerous initiatives taken by RBI. Consequently, the share of maintainable complaints rose by 3.4% during 2017-18. Bank and wise distribution of maintainable complaints is given at Appendix XII and the OBO wise distribution is given at Appendix XIII.

Age–wise Classification of Pending Complaints

2.27 Although the Scheme specifies no time limit for resolution of complaints by OBOs, efforts are made to resolve the same within two months. However, due to reasons such as non-submission and / or delay in submission of complete information by complainants/banks, the time taken for resolution may get extended. Of the total complaints pending as on June 30, 2018, only 0.83% were over two months old. The age-wise classification of number of pending complaints is detailed at Appendix XIV. Chart IX below indicates age-wise classification of pending complaints.

Mode of Disposal of Maintainable Complaints

2.28 The Scheme promotes settlement of complaints by agreement through conciliation or mediation by BOs. If the parties fail to arrive at an acceptable conclusion by agreement, the BO gives a decision or passes an Award. A noteworthy feature of 2017-18 is the marked increase in the number of complaints resolved by agreement. As detailed in Table 5 below 65.82% of the maintainable complaints were resolved through agreement as compared to 42.43% during the previous year. This shows that mediation is increasingly being used as an effective tool in complaint resolution.

Grounds for Rejection of Maintainable complaints

2.29 The grounds for rejection of maintainable complaints and their proportion to total complaints received during the year are indicated in Table 6.

The BO Scheme envisages summary disposal of complaints. As may be seen from the above table, the maximum number of rejections are on the ground that ‘elaborate documentary and oral evidence’ is required as provided for closure of such cases under Clause 13 (d) of the Scheme. Keeping in view the high number of such rejections, this ground was made appealable with effect from July 1, 2017. The total number of Appeals increased eight-fold from 15 in 2016-17 to 125 in 2017-18, of which, 98 Appeals pertained to closure under the said Clause. However, the 98 appeals account for only 4.2% of 2,337 complaints closed under Clause 13 (d) of the Scheme.

2.30 First Resort Complaints⁵: ‘First Resort Complaints’ (FRCs) are returned to the complainants advising them to follow the laid down procedure with a copy to the concerned bank for suitable redressal. During the year, 10% of the non-maintainable complaints were FRCs.

Awards Issued

2.31 During the year, 148 Awards were issued by BOs. The OBO-wise position of Awards issued and implemented is indicated in Table 7.

Appeals against the Decisions of the BOs

2.32 The Deputy Governor-in-Charge of the Consumer Education and Protection Department (CEPD) of the RBI is the designated as the Appellate Authority⁶ (AA) as per the provisions of the BO Scheme. CEPD provided the Secretariat to the AA. During the year, there was an eightfold increase in the number of appeals (125) as compared to the last year (15) owing to the revision in the Scheme as discussed at para 2.29 above. Of these, 115 appeals were received from complainants who were aggrieved by the decision of the respective BOs whereas 10 were filed by the banks. The AA handled 132 appeals during the year, including 7 appeals that were pending at the beginning of the year. Of these, 37⁷ appeals were disposed as on June 30, 2018.

2.33 The position of appeals handled by the AA during the last three years and the OBO-wise position of appeals received during the year 2017-18 is given in Tables 8 and 9 respectively.

Chapter 3

Other Complaints / Applications Received in RBI

Centralised Public Grievance Redress and Monitoring System

3.1 Centralised Public Grievance Redress and Monitoring System (CPGRAMS) is an initiative of Government of India which provides an alternate channel to public to lodge their complaints with regulators. The CPGRAMS portal has been developed by the Department of Administrative Reforms and Public Grievances of Government of India. Government Departments and banks are subordinate offices in this portal, to receive and redress complaints. CEPD is the Nodal Office for RBI and OBOs are subordinate offices.

3.2 A comparative position of these complaints received through this portal and handled by OBOs during the last three years is given at Appendix XV. During 2017-18, a declining trend has been observed in the complaints received through this portal.

Applications Received under Right to Information Act, 2005

3.3 The Banking Ombudsmen are the Central Public Information Officers under the Right to Information Act, 2005 (RTI Act) to receive applications and furnish information relating to complaints handled by the OBOs. During the year, 1,039 RTI applications were received by all OBOs. The OBO-wise position of such applications received during the last three years is detailed at Appendix XVI.

Chapter 4

Important Developments and Way Forward

Revision of the Banking Ombudsman Scheme

4.1 To keep pace with the rapid changes in the banking arena, the BO Scheme was revised, for the fifth time since its inception in 1995, with effect from July 1, 2017. The salient features of the revision are as follows:

1. Restriction of ₹ 1 million on the disputed amount for accepting a case was removed;

2. Pecuniary jurisdiction of BO for issuing an Award was increased from ₹ 1 million to ₹ 2 million;

3. Compensation of ₹ 0.1 million for loss of time, expenses, harassment and mental anguish (previously available only in credit card complaints) was extended to all types of complaints;

4. Additional grounds for filing complaints were introduced viz: (a) ‘Mis-selling of Third-party Products’ and (b) ‘Deficiency in Mobile Banking/Electronic Banking Services’;

5. The scope of appealable Clauses was widened to include the complaints closed on the ground (Clause 13 (c) of the old Scheme) “requiring consideration of elaborate documentary and oral evidence”;

6. The procedure for settlement of complaint by agreement was made easier by providing an opportunity to complainants to furnish their submission in writing within a timeframe, on the written submission made by the bank.

Second Office of Banking Ombudsman at Mumbai

4.2 In an effort to provide speedier resolution for the increasing volume of complaints, a second office of Banking Ombudsman (designated ‘Office of the Banking Ombudsman – Mumbai - II’) was opened at Mumbai. The jurisdiction of the OBO-II, Mumbai - II extends over Maharashtra and Goa [except the districts of Mumbai, Mumbai (Suburban) and Thane].

Review of Internal Ombudsman Mechanism in Banks

4.3 The RBI had, in May 2015, advised all public-sector and select private and foreign banks to appoint Internal Ombudsman (IO) as an independent authority to review complaints that were partially or wholly rejected by the bank. RBI revisited this arrangement and in September 2018 issued revised directions under Section 35 A of the Banking Regulation Act, 1949 in the form of an ‘Internal Ombudsman Scheme, 2018’. The Scheme covers, inter-alia, appointment / tenure, roles and responsibilities, procedural guidelines and oversight mechanism for the IOs. All Scheduled Commercial Banks in India having more than ten banking outlets (excluding Regional Rural Banks), are required to appoint one or more IO. The IO shall examine all customer complaints, which are in the nature of deficiency in service on the part of the bank, (including those on the grounds of complaints listed in Clause 8 of the BO Scheme, 2006), which are partly or wholly rejected by the bank. As the banks shall internally escalate all complaints which are not fully redressed, to its IOs, before conveying the final decision to the complainant, the customers of banks need not approach the IO directly. The implementation of IO Scheme will be monitored through the bank’s internal audit mechanism apart from supervisory oversight by RBI.

Ombudsman for Digital Transactions

4.4 In the backdrop of the increasing volume of complaints involving digital payments and the large number of Prepaid Payment Instruments issued by banks and non-bank issuers, RBI is in the process of formulating an Ombudsman Scheme for digital transactions. As an initial step in this direction, CEPD organised a seminar on “Consumer Protection in Digital Transactions” on August 30, 2018 to discuss the various aspects of regulatory and customer protection issues with the stakeholders of digital payment services. The seminar involved talks by Shri M Mohapatra, Deputy Managing Director (Strategy) & Chief Digital Officer, SBI, Shri Sunil Bajpai, Principal Advisor (IT), Telecom Regulatory Authority of India and Shri Shri G Padmanabhan, non-executive Chairman, Bank of India. A panel discussion chaired by Dr A S Ramasastri, Director, Institute of Development and Research in Banking Technology was also held which included Shri Rajiv Anand, Executive Director, Axis Bank, Shri Madivannan, CTO, ICICI Bank, Shri Dilip Asbe, MD & CEO, National Payments Corporation of India, Shri Sameer Nigam, Co-founder & CEO, Phone Pe as the panellists. The seminar was attended by Executive Directors of RBI, Shri. Deepak Singhal Smt. Surekha Marandi, Smt. Rosemary Sebastian, Smt. Parvathy V Sundaram, senior officers from regulatory and supervisory departments of RBI and banks, Banking Ombudsman of metro cities, PNOs and Internal Ombudsman of select banks / e-wallets and other industry representatives. Other Banking Ombudsman and in-charges of CEPCs of 31 offices also participated through video conference. The seminar threw light on a large number of consumer protection-related issues including necessity for clear identification of the transactions to be covered under the term “digital” and distinguishing them from “non-digital” transactions, trade-off between the requirements of the grievance redressal system and freedom for innovations and requirement for adequate talent with essential skill-sets. The feasibility of co-regulation was also discussed considering that certain service providers in the supply chain of digital transactions, like for mobile banking, are outside the regulatory purview of the RBI.

Complaint Management System (CMS)

4.5 RBI has initiated the process of developing a CMS to meet the challenges in the area of grievance redressal. The System Integrator for this project has been selected through a tendering process. During the year, the CMS will be implemented as an online dispute resolution mechanism for customers of banks and eligible NBFCs and in due course would be extended to complaints related to digital transactions.

Pilot Study on Service Charges Levied by Banks for Basic Banking Services

4.6 RBI commissioned a pilot study in the city of Mumbai on charges levied by banks for basic banking services to ascertain customer feedback and need for rationalisation of charges. The study revealed that 72% of the respondents were aware about availability of tariff schedule at the branches and that the front-line staff of the branch was the main source of information in this regard. More than 30% of the respondents indicated that information about service charges and fees was not shared by the banks at the time of opening of account and any subsequent changes were also not informed to them. More than 25% of the respondents expressed their discontent over charges such as penalty on non-maintenance of minimum balance, cash deposit charges at home and non-home branches, cheque return charges (deposited by the customers) and for signature verification.

Conference of Principal Nodal Officers of Banks

4.7 The Conference of the Principal Nodal Officers (PNO) of Scheduled Commercial banks was convened on November 28, 2017 at RBI Academy, Mumbai. Smt. Surekha Marandi, Executive Director, RBI while inaugurating the Conference informed the participants that RBI was examining the possibility of providing access points for conducting meetings through video conferencing to enhance penetration of the grievance redressal mechanism in rural and semi-urban areas. The speakers included Chief General Manager, CEPD, CEO, BCSBI and Senior Advisor, IBA were important speakers in the conference. Besides the PNOs of banks, it was also attended by BOs and senior officers of supervisory/regulatory departments of the RBI. During the Conference, presentations were made by groups of PNOs on the following topics: i) Challenges and strategies for spreading consumer education / awareness – Role of banks ii) Cyber security risks in digital banking iii) Strengthening the internal grievance redressal mechanism in the banks and role of Internal Ombudsman - current status and way forward. The conference highlighted the need for banks to spread financial literacy and awareness, impart proper training to frontline staff on the extant regulations, such as determining the suitability of a financial product or service vis-a-vis the targeted class of customers.

Working Group for Streamlining the Resolution Process for ATM-related Complaints

4.8 A group headed by the PNO of SBI along with representatives from NPCI, ICICI, HDFC and Corporation bank was set up to analyse the pattern of ATM-related complaints and identify issues that cause customer inconvenience and / or delay in redressal / settlement of ATM disputes, including the issuer and acquirer bank dynamics. The group has submitted its report which is being examined for implementation.

Video Conference on Digital Banking and Cyber Security

4.9 To provide further clarity to BOs and in-charges of Consumer Education and Protection Cells on Digital Banking and Cyber Security, a video conference was organised on August 28, 2017 by CEPD. Shri S Ganesh Kumar, Executive Director in charge of Department of Payment and Settlement Systems provided guidance on issues such as erroneous transfer of funds through NEFT/RTGS, disputed ATM transactions, cloning of cards, preservation of CCTV footage, complaints relating to white label ATM, fictitious offers, risks in static password in Card Not Present and e-commerce transactions, extra charges levied by banks on usage of cards, etc.

Awareness and Consumer Education

4.10 The OBOs adopted a multipronged outreach strategy to spread awareness about the Banking Ombudsman Scheme and consumer education during the year. This included conducting 129 outreach and awareness programmes and 26 Town Hall events throughout the country, especially in the rural and semi-urban areas, advertisement campaigns in print and electronic media, participation in exhibitions / trade fairs, display of banners, posters etc., and distribution of promotional material.

4.11 RBI also conducted a country-wide awareness campaign on fictitious offers, Basic Savings Bank Deposit account through print and electronic media. RBI’s SMS handle ‘RBISAY’ was extensively used for sending messages across India on topics such as fictitious offers of money, secured use of electronic banking facilities, Banking Ombudsman Scheme, etc. An Integrated Voice Recognition Service facility (by giving a missed call on 14440) was made available to public by RBI for getting more information on these topics.

Way Forward

4.12 In order to handle the rising number of complaints relating to financial transactions conducted through digital mode, Ombudsman Scheme for digital transactions is proposed to be formulated and implemented during 2018-19.

4.13 Keeping in view the increasing complexity, pace and volume of banking products / transactions, measures will be taken for capacity building of the staff of OBOs, as also those handling customer complaints in banks, to enhance their understanding of the intricacies of various types of cases as well as to evolve greater uniformity in the processing of complaints. This will also be facilitated by the implementation of the proposed Complaint Management System which, inter alia, is envisaged to provide capability for end-to-end Online Resolution of Disputes (ORD).

4.14 The functioning of the NBFC Ombudsman Scheme which was implemented in February 2018 would be reviewed and scope of extending the Scheme to include NBFCs with asset size of over ₹1 billion and having public interface, would be considered.

Annex - I

Important Notifications Relating to Customer Service issued by the RBI in 2017-18

Annex - II

Exemplary Cases dealt with by BO offices during 2017-18

ATM TRANSACTIONS

1. Cash amounting to ₹25,000/- was withdrawn from an ATM located at another city although the complainant’s ATM card was in his possession elsewhere. As the bank failed to prove the negligence / fault of the complainant, it was advised to pay the disputed amount as per RBI’s Circular on Limiting Liability of Customers in Unauthorised Transactions.

2. The complainant received a call that his ATM card had been blocked and his card credentials were required for unblocking the same. He shared his card credentials with the caller and instantly ₹53,900/- were debited from his account. He immediately informed the bank and requested to block his card. However, the fraudulent transactions continued with the total loss of ₹6,88,900/- to the complainant. BO observed that since the complainant had reported the fraud immediately to the bank, the latter should have taken necessary action to disallow any further transaction. As such, the bank was advised to pay ₹6,35,000/- i.e. the amount which was withdrawn after reporting the first fraudulent transaction to the bank.

CREDIT CARDS

3. The complainant alleged that though he had paid ₹ 35,000/- in settlement of his outstanding dues in respect of two credit cards, but he got a demand notice after 13 years to pay ₹12.4 million and ₹15.8 million against each of the settled credit cards. The bank submitted that the credit card accounts were inadvertently sold to an ARC and it had taken up with the ARC to nullify the outstanding dues and carry out necessary amendments in credit status. BO directed the bank to settle the grievance by making the outstanding dues as nil and clean up the complainant’s credit history with Credit Information Company.

DEPOSITS

4. A complaint regarding deduction of ₹ 55,662/- from Savings Bank account without prior intimation was received in the OBO. On enquiry, the bank submitted that besides the deduction in savings account, it had also marked a lien on the complainant’s Fixed Deposit Receipts (FDRs) of ₹ 6.52 million as per instructions received from its digital banking department. The same was done as a coding error had occurred in in its system in the currency exchange module as a result of which, the complainant’s account was debited with 100 times lesser amount than the actual exchange value of money withdrawn by the complainant abroad. It further clarified that the complainant had done 246 transactions during the period and owed ₹ 928.8 million to the bank of which an amount of ₹55,662/- was debited from her account. In the conciliation meeting the complainant did not accept that there was any difference on account of exchange value in the amount withdrawn and the amount debited to her account in the said transactions. On perusal of the transaction history of the complainant and SMS logs during the period of system error and the normal period, it was observed that the complainant had withdrawn 150,000 CFA (Benin republic currency) at Benin, West Africa and her account was debited by ₹333.05 during the former period and ₹18,341.01 during the latter. Considering the transaction charges and currency conversion charges, it was therefore concluded that the account of the complainant was indeed debited with100 times less than the actual withdrawals. BO observed that the bank’s action for recovery of excess money withdrawn by the complainant was in order.

5. The complainant, a Government department claimed that two FDRs duly discharged, were sent to the bank by registered acknowledgement letter with a request to pay the maturity amount along with due interest. It stated that despite having sent the original receipts, the bank was demanding the same. The bank did not send any response to the BO’s queries. Considering the that the bank failed to provide any response and documentary evidence submitted by the customer of having sent the FDRs to the bank for encashment, BO inferred that any information if provided, would have been unfavorable to the bank and the bank was advised to pay the maturity amount of FDRs along with accrued interest thereon. As the FDRs were not traceable, the bank paid the proceeds with applicable interest after obtaining an indemnity bond from the complainant.

6. A complainant received an e-mail from the bank informing that the monthly balance requirement for the newly opened SB account was ₹ 2,500/-. As he had opened a zero balance account, he took up with the bank and was informed that his account was a regular savings bank account with a requirement of Minimum Average Balance (MAB) and ₹ 3,500/- had already been deducted from the account in view of the same. BO observed that after levying MAB charges, the available balance in complainant’s account become zero and subsequently when there was a credit entry in the account, the bank debited the complete amount towards outstanding MAB charges. BO advised the bank to refund complete MAB charges since in terms of RBI guidelines the bank must ensure that the balance in the savings account does not turn negative solely on account of levy of charges for non-maintenance of MAB and as such it was not justified in levying such charges for the period when the balance was nil.

7. The complainant (one of the partners in a partnership firm) had placed a FDR with a government department as a performance guarantee and on completion of the underlying contract, the government department returned the original FDR with a discharge letter to the complainant. On submitting the FDR to the bank for credit of proceeds to complainant’s account, he was informed that the same had been foreclosed and the proceeds were credited to the account of another partner of the firm from where original FD was funded. On enquiry, the bank stated that all relevant records were destroyed in a major fire at the branch and thus no records were available. The bank however was not able to provide any justification for the query as to how the FD was pre-closed when original FDR was in the custody of the government department. BO therefore directed the bank to pay maturity value of the FD to the complainant.

ELECTRONIC BANKING TRANSACTIONS

8. A customer lodged a complaint that 28 fraudulent transactions were carried out using his credit card during a period when he was abroad and he came to know of these when recovery agents visited his residence in India. He also informed that he did not have access to his Indian mobile number during his stay abroad and did not receive any e-mail alerts. On enquiry, the bank informed that the transactions were carried out by validating the customer’s card credentials and submitted logs of SMS and email alerts in support of its claim. It further informed that based on the chargeback claim accepted by the merchant banks, the bank had provided credit to the complainant in respect of 18 out of the 28 transactions. The bank however admitted that as per VISA / MASTER guidelines, chargeback can be raised only for 15 transactions and if the number exceeds 15, the transactions are deemed as fraudulent. BO observed that although SMS were sent to the complainant’s registered mobile the same could not be accessed overseas by the latter. The bank could not confirm whether the transactions matched that of the profile of the customer and also failed to submit the switch report of remaining 10 transactions. Considering the above and the fact that the bank had accepted that the transactions were fraudulent in nature, BO advised the bank to refund the amount involved in the remaining 10 transactions along with relevant financial charges.

9. In a complaint related to unauthorized debit transactions from a complainant’s account, the bank submitted documents confirming that the transactions were done using the complainant’s card and OTPs for carrying out the same were sent to the registered mobile number. The OBO sent bank’s reply to the complainant, based on which the complainant suspected that the disputed transactions might have been carried out by an office colleague sharing the company’s accommodation. Upon taking up the matter with his company, the suspected colleague confessed that he had fraudulently withdrawn money from the debit and credit cards of the complainant and the case was closed by BO.

10. In a complaint regarding fraudulent online transfer of ₹150,000/- through 60 transactions, the complainant stated that card credentials and OTPs had not been shared and the card was in her possession. The bank alleged that as the complainant had shared card credentials, she was negligent and as such its liability was zero for the said transactions. On verification of the SMS delivery log and account statement of the complainant, BO observed that the bank had not carried out velocity check and transaction pattern monitoring as required in terms of extant RBI instructions on security and risk mitigation measures for electronic banking transactions since the complainant had never used the card for bulk transactions in the past. BO therefore advised the bank to refund the disputed amount to the complainant.

11. The complainant alleged that the bank had, by mistake, transferred ₹1,134,994/- instead of ₹113,882/- to the beneficiary in a RTGS transaction. The bank submitted that the complainant was at fault as he had filled an incorrect the amount in the RTGS form even though the correct amount was indicated in the accompanying cheques and the transaction was put through as per the amount indicated in the RTGS form. BO observed that there was deficiency on the part of the bank, as it had not taken due care by following maker-checker concept while putting through the RTGS transaction and thus directed the bank to pay the difference amount to the complainant along with interest at savings bank rate.

12. The complainant stated that an unauthorized RTGS transfer of ₹850,000/- was done from his account using a cheque which was neither issued nor signed by him. Further, no SMS alert regarding the debit was received by him. He further stated that an amount of ₹639,000/- was reversed by the bank but the remaining amount of ₹ 211,000/- was not credited. On enquiry, the bank informed that a request was received by the bank for change of the complainant’s mobile number but it was later observed that the signatures on the application as well as on the cheque were different from those in the bank records. The above and the fact that the bank had credited ₹639,000/- to the complainant’s account established that the bank had agreed to complainant’s claim of a fraudulent transaction in his account and as such BO advised the bank to pay balance amount to the complainant.

LOANS AND ADVANCES

13. Complainant had disputed the supervision charges levied in cash credit account by the bank. Upon enquiry, the bank, submitted that the charges were levied after income leakage was identified in the revenue audit of the branch and the same were as per its internal circular. On specifically seeking information regarding prior information to the customer about the revised charges, the bank could not produce any documentary evidence indicating that the complainant was informed about these charges prior to levying the same. Further, there was no mention of these charges in the sanction letter too. BO therefore advised the bank to refund the charges along with interest.

14. The complainant stated that her son had availed an education loan for ₹0.3 million of which around ₹0.2 million had been repaid. She alleged that the bank had surrendered the life insurance policy for ₹ 74,000/- only pledged against education loan even though the policy was about to mature and the sum assured was ₹0.2 million. As such the loan could not be repaid in full and the same was being demanded by bank. She further alleged that no intimation was given to her by the bank before surrender. The bank submitted that the complainant’s loan was under default and the bank, under its right to set off, had surrendered the policy and adjusted surrendered value towards the outstanding loan. It however could not provide any evidence of informing the customer before surrendering of the policy. BO advised the bank to credit the complainant’s loan account with ₹ 0.13 million, i.e. the balance amount of the sum assured for the said policy.

15. The complainant who had availed a home loan at floating rate subsequently decided to convert to a fixed rate loan. A supplementary agreement was signed between bank and the complainant and a conversion fee was charged to the latter. The complainant alleged that even after the loan had been repaid the bank did not hand over a ‘no dues certificate’ and original property documents due to the reason that some loan installments were still outstanding. He further claimed that he had paid an excess amount of ₹60,957/- and sought refund of the same along with interest and compensation. Upon enquiry, the bank submitted that the re-negotiated rate in the supplementary agreement was also a floating rate which was subject to changes and thus there was outstanding in the loan account of the complainant. The bank failed to provide any documentary evidence for its averment. Also, it could not provide any communication confirming that the complainant was advised that the rate of interest agreed to was floating rate and not a fixed rate. The complainant however provided an evidence of having paid the conversion fee. BO therefore advised the bank to recalculate interest by treating the loan account as a fixed rate loan and refund excess amount recovered from the complainant.

MIS-SELLING

16. The complainant alleged that the bank had debited his savings account towards payment of premium of 11 insurance policies without obtaining his consent or mandate. During the conciliation meeting, representatives of bank and insurance company stated that the complainant had given his consent over the welcome calls made by the insurance company. Further, a 15 days free look-in period was also offered within which policy could be returned but the complainant did not raise a dispute. The customer reiterated that the premia were deducted without his consent and also informed that the annual premium to be paid for all policies was much more than his annual income. The bank’s representative agreed to re-examine the issue and later confirmed that the premium debited from his account was returned.

17. The complainant alleged that he had no regular income and had received money from the sale of land / properties, which he wanted to place as fixed deposits but the bank instead mis-sold to him an insurance policy without explaining terms and conditions and having an annual premium of ₹99,000/- for five years. Further, he had approached the bank within the look-in period and thereafter for cancellation but the bank did not consider his requests stating that the product sold to the customer pertained to insurance company and it did not have authority to refund the amount. BO observed that the bank had not examined suitability / feasibility of the product while selling it to the complainant as it had ignored the fact that the complainant was unemployed without any regular income. Further, the application form wrongly mentioned that the complainant was employed with a regular income even though he was dependent on his father’s paltry family pension. BO therefore advised the bank to refund the premium paid by the complainant along with interest as applicable for deposits of more than one year from the date of selling insurance policy till the date of refund and ₹10,000/- as compensation towards loss of time, harassment and expenditures incurred.

PENSION

18. The complainant stated that the bank was paying him double pension and despite reminders, had not rectified the error. The bank realized its mistake after considerable period and sanctioned him a loan to recover the excess pension, which was a financial burden on him. The bank submitted that the complainant was enjoying double pension for 19 months and had not reported the matter. After realizing the mistake, a loan was sanctioned after obtaining his consent and with proper documentation. BO observed that bank did not take any corrective action despite the complainant informing them about double pension was being received by him. Further, it had adopted an incorrect procedure of sanctioning a loan to recover the excess pension credited to the complainant’s account. BO therefore advised the bank to close the loan account and adjust the interest charged on the loan against the outstanding amount to be recovered. The bank was also advised to recover in monthly instalments.

19. The complainant alleged that he had approached the bank to withdraw money from his mother’s pension account as she was bed ridden and had difficulty in speaking but the bank refused. Upon enquiry, the bank informed that the complainant’s mother was above 90 years of age, bed ridden and unconscious for last three years. As the complainant was not an authorized signatory or a legal heir, the bank could not allow withdrawal. It further informed that payment could be made to the legal heirs, provided the following documents are submitted :(i) a consent letter verified by two outside parties and the branch manager-in-charge from all legal heirs authorising any one of them to withdraw the balance in SB account of the complainant’s mother; and (ii) a medical certificate from the doctor who has been treating complainant’s mother certifying her inability to sign / execute documents. The bank, on receipt of the same later transferred an amount of ₹16,500/- to the complainant’s account.

20. The complainant, a pensioner on receipt of the revised pension order dated October 28, 2016 requested the bank to release the pension arrears with effect from January 1, 2006. He alleged that the bank had not credited the arrears and the papers were pending with Central Pension Processing Centre (CPPC) of bank for last one year. The bank submitted that the pensioner had received the arrears on August 31, 2016 as per 7th Central Pay Commission. Upon enquiry regarding the PPO dated October 28, 2016 the bank informed that the same pertained to 6th Central Pay Commission and the arrears had not been paid as its CPPC had not received the revised order from Central Pension Accounting Office (CPAO). The bank on advice of the BO took up with CPAO and credited the arrears on November 27, 2017. BO further advised the bank to pay interest for the delayed period as per extant instructions.

REMITTANCE

21. The complainant stated that he had deposited a cheque but the proceeds were not credited by the bank to his account due to which other cheques issued by him were dis-honoured. On taking up with the bank, he was informed that his cheque was lost in transit. BO observed that the bank had not adhered to the extant RBI instructions as it had not informed the complainant of the loss of cheque and non-credit of proceeds of the disputed cheque to his account, as a result of which the other cheques issued by the complainant were dis-honoured. Further, the bank failed to take any proactive measure and the matter was investigated only after it was escalated to OBO. BO therefore advised the bank to credit the complainant’s account with the amount of the disputed cheque along with compensation of ₹20,000/- for loss of time, harassment and mental agony caused to the complainant.

SERVICE DEFICIENCY

22. The complainant after death of her husband claimed insurance amount under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) from the bank and produced an undated acknowledgement receipt issued by the bank for submission of the relevant application form by her husband. The bank informed her that that there was no policy under PMJJBY in the name of her husband and no premium had ever been deducted from his account. The bank was unable to find the application form for the undated acknowledgement issued to the deceased. BO observed that there was negligence on the part of the bank in issuing an undated acknowledgement receipt and not being able to trace the related application. A conciliation meeting was held wherein the bank accepted its negligence and agreed to reimburse insurance amount to the complainant along with a compensation of ₹5,000/- for mental agony, loss of time and expenses incurred.

23. The complainant had opened a joint savings bank account with her husband and opted for insurance under PMJJBY. After demise of her husband, she claimed the insurance amount under PMJJBY. The bank rejected the claim stating that the premium on the policy could not be paid through auto-debit due to insufficient funds and hence the policy had not been renewed. The complainant alleged that automatic deduction of undue charges for non-maintenance of minimum balance and inoperative account had resulted in insufficient balance. BO observed that bank’s contention that the charges were recovered automatically without manual intervention was not acceptable since wrong parameters were fed in the core banking solution resulting in erratic deduction of charges from the account. As such, the insurance policy could have been renewed. Had there been no wrong / excessive charges debited to the account, the complainant would have been entitled to receive ₹0.2 million towards claim against the policy. BO therefore advised the bank to reimburse the entitled amount against the policy to the complainant.

24. The complainant alleged that her sister did not receive scholarship of ₹30,000/- granted by the Ministry of Minority Affairs which had been remitted by the issuing bank. On enquiry, the bank informed that the funds could not be credited to beneficiary’s account as it was frozen due to non-compliance with Know Your Customer norms and the amount was returned to the remitting bank. BO observed that the bank was deficient as not adhering to RBI guidelines which stipulate that banks can impose partial freeze on non-KYC compliant accounts in a phased manner which can be done only after giving due notice of three months to the customer followed by a reminder giving another three months for compliance. The bank was advised to pay ₹30,000/- to the complainant.

OTHERS

25. The complainant had transferred a sum of ₹0.2 million to an account towards advance for franchisee license. On taking up with the bank, he was informed that the amount was credited to the account number given by the complainant which belonged to an individual. On perusal of complaint, BO observed that the complainant was lured by a fake advertisement and it seemed to be a case of fraud done by a third party. The KYC documents of beneficiary account holder indicated certain discrepancies and as such the beneficiary bank was advised to mark lien in beneficiary’s account and refund the disputed amount to complainant. The bank reversed ₹2,498.75 (funds available in beneficiary’s account) and marked lien for the balance amount until availability of funds in the said account. The complainant again requested to revisit the case as similar instances of fraudulent transfers having same modus operandi had come to his notice. Based on additional information, a meeting was held with beneficiary bank and it was observed that the said beneficiary’s account was opened only to pool proceeds of such fraudulent transfers. BO therefore advised the bank to compensate the complainant with the balance amount owing to deficiency in compliance with RBI’s KYC norms.

26. The complainant had opened a Fixed Deposit (FD) and authorized the bank to allow M/s. XYZ Enterprises to use the same as a guarantee for opening a Letter of Credit (LC) for import transactions of the latter. The complainant alleged that the bank extended a loan facility against this FD to the enterprise without his consent and prior information to him. He further alleged that on becoming aware of the same, he withdrew his guarantee / permission and instructed the bank not to allow any more withdrawals. However, the bank continued to allow the same and later informed him that his FD would be released only after adjusting the outstanding loan amount and interest thereon, extended to the enterprise. On enquiry, the bank submitted that even though the intention of the complainant was to give FD as collateral security for LC but as the ‘Proforma Invoice’ did not permit issuance of LC, the bank had sanctioned a loan against the same. BO observed that the complainant had authorized the branch to allow the enterprise to use his fixed deposit as guarantee to open a LC but the bank without obtaining his consent and intimating him extended loan facility against his FD. Further, his instruction regarding withdrawal of guarantee and not allowing any further debit was not acted upon by the bank. In view of the above, the BO directed the bank to credit the amount of FD along with interest till the date of actual credit to the account of the complainant.

27. The complainant, an authorized signatory of an Fast Moving Consumer Goods (FMCG) distribution firm alleged that the bank had debited cash handling charges of ₹190,565/- from the firm’s current account without prior information. It further alleged that the charges should have been debited on a day to day basis rather than on a lump-sum basis and in the same financial year to which they pertained. The bank in its reply expressed its inability to reverse the charges as the same were deducted on account of income leakage pointed out by their internal audit. In a conciliation meeting held by the BO, the bank refuted the complainant’s allegation of levying charges without prior notice and submitted that the charges were displayed on branch notice board and published on bank’s website. The complainant in the meeting requested for refund of at least 50% of the charges, which was also not accepted by the bank. BO observed that the bank had not given one month’s notice for revision in cash handling charges and hence had not adhered to its commitment under the BCSBI Code of Bank’s Commitment to Customers. A Pre-Award Notice was issued to the bank advising it to refund the charges aggregating ₹381,130/- to the complainant’s account failing which an Award would be issued against the bank. In response, the bank credited 50% of the cash handling charges amounting to ₹190,565/-, which was accepted by the complainant.

28. The complainant, a senior citizen had taken six pension plans in his name. He alleged that the bank officials in collusion with the officials of its insurance company had opened a fake savings bank account in his name, foreclosed his pension plans and deposited the proceeds to this account. Further, the amount was withdrawn and / or transferred to another account using ATM Card issued in this account. BO observed that the bank had not adhered to extant regulatory guidelines while opening SB account as forged documents available with insurance company were used to open the accounts and the branch manager had signed as introducer in the account opening form. It was further observed that the branch manager was reported as dead, the other two bank officials who were responsible for opening the fake account had resigned from the bank. BO advised the bank to refund the entire amount of the pension plans fraudulently deposited in the fake account and withdrawn by fraudsters.

29. The complainant alleged that he had deposited ₹195,000/- at the bank’s counter but he was informed by the cashier at the counter that the amount was short by ₹ 40,000/-. On perusal of the CCTV footage, BO observed that after the cash was tendered by the complainant and counted by the cashier, another person appearing to be bank’s staff entered the counter and was seen handling the disputed cash. He was also seen exiting the counter with some cash and a voucher while leaving the door of the cashier’s cabin open. The cashier was therefore found negligent in allowing another person to handle and count cash inside his cabin and also in keeping the door open while dealing with cash. BO while granting benefit of doubt to the complainant, advised the bank to make good the shortfall in the amount deposited.

Annex - III

IMPORTANT DECISIONS OF APPELLATE AUTHORITY

1. Settlement of deceased borrower's loan account covered by insurance policy: Loan covered by Personal Accident Insurance Policy under corporate tie-up with an Insurance Company (IC) was granted to an ex-serviceman who died in a road accident when the policy was in force. The customer’s wife became family pensioner and serviced the loan. Later, after learning about insurance policy, she requested the branch to lodge a claim with IC and settle the loan account. As per guidelines of IC, the accidental death should have been intimated to them immediately and the claim should be lodged within a period of 60 days from the date of death. The bank lodged claim after repeated requests which was declined by IC on account of “delayed intimation”.

A complaint was lodged with OBO stating that due to ignorance of the family and negligence of the branch, Equated Monthly Instalment (EMI) on the loan continued to be paid from family pension, until it was known that the loan was covered under insurance policy. No action was taken by the bank despite repeated requests. In conciliation meeting, BO directed the bank to settle the case within 15 days and close the loan account without asking for any payment. However, the branch did not resolve the issue. The BO observed that the bank had failed to lodge the claim in time with the IC. Further, in its reply to RTI query, the bank stated that no information regarding the death of late customer was recorded in the branch; whereas, his wife was drawing family pension from the same branch after submitting death certificate of her husband. The borrower was not given any document informing him that the loan was covered under insurance policy. The bank failed to submit some of the documents asked. Keeping this in view, the BO passed an Award and advised bank to settle the case by closing the loan account without asking for any payment towards principal and interest and issue a no dues certificate. Aggrieved by the Award, the bank preferred an appeal before the Appellate Authority. Bank in its appeal mentioned, inter alia, that at the time of processing of family pension, the basic document relied upon was the death certificate. The complainant did not mention anything in her application about the housing loan availed by the deceased and the availability of insurance policy in the housing loan account.

AA observed that when wife of the deceased borrower submitted the family pension claim documents, the bank did not inform her about the deceased borrower being covered by the insurance policy. Further, she was neither a co-borrower nor guarantor for housing loan availed by the deceased and the bank was not legitimately entitled to collect EMIs from widow of the deceased. In view of the above, the AA rejected the appeal and upheld the Award of the BO directing the bank not to recover any outstanding principal and interest from the wife of deceased borrower and to refund all the EMIs and interest of the loan collected / received after demise of the borrower, along with interest and to settle the case by closing the loan account and issue a no dues certificate.

2. Foreclosure charges: The complainant had contested levy of charges of over ₹2.7 million by a bank for sanctioning facilities in the nature of term loan, cash credit and bank guarantee, even though, as claimed by the complainant, the sanctioned facilities had not been availed. The bank had contended that all the facilities sought by the complainant had been sanctioned and the complainant had also availed them and that the charges levied by the bank were as per the agreed terms as well as in line with their internal rules. On the basis of submissions made by both the parties, it was observed that the complainant had availed, either partly or fully, all the facilities sanctioned, except one of the Term Loans. The bank had levied processing charges, service tax, interest on loans and advances, valuation charges, etc. for this Term Loan along-with charges for other facilities sanctioned by it. It was further observed that though bank’s internal guidelines required that only half of the processing charges shall be levied at the time of sanction, and rest on availment, the bank had levied full processing charges on all facilities sanctioned by it, including on the Term Loan that had not been availed by the complainant. AA directed the bank to refund the excess processing charges with interest.

3. TDS on pension – Non-updation of PAN: The complainant, a retired State Government employee, drawing his pension through his SB account since 1998 came to know that a sum of ₹ 6,130/- was deducted from his pension in the month of May 2016. The bank stated that TDS was deducted due to non-submission of investment declaration by the complainant for the FY 2016-17. The complainant filed another complaint with the bank with his projected income tax at below the exempted limit and requested the bank to take steps for refund of the deducted amount. The Central Pension Processing Centre (CPPC) of the bank replied that the deduction was due to non-availability of Permanent Account Number (PAN) details in pension database of the bank. The bank also informed the complainant that the requisite information had been updated, henceforth no deduction will be made from his pension and for TDS refund the complainant may take up with the Income Tax Department. The AA observed that non-availability of PAN details in pension database of CPPC cannot be considered as a fault of the customer. It was evident that the PAN details were not updated in pension database though the branch was in possession of the same. AA allowed the appeal and set aside the decision of BO. The AA further directed the bank to assist the complainant in obtaining refund of TDS deducted from Income Tax Department and pay interest on the said amount from the date of deduction to the date of refund by Income Tax Department.

4. Fraudulent use of personal information shared by the complainant: A person posing as bank official called the complainant on his mobile and asked him to disclose his Aadhar and ATM card number to regularize his savings bank account with the bank. As the caller did not ask for the Personal Identification Number (PIN), the complainant parted with the information without any hesitation. The caller sent him several numbers and asked him to read out the same. When the person stopped calling him, the complainant got suspicious. When he went to the bank branch and updated his passbook, he came to know that an amount of ₹14,200/- was withdrawn from his account. The complainant lodged complaint with the bank immediately and was advised to ensure that his three other accounts with other branch of the bank are not hacked. The bank informed him that the disputed amount was debited from his account in five online Point of Sale (POS) transactions which could not be successful in the absence of both card details as well as One Time Password (OTP) and advised that the safe custody of ATM Card PIN / OTP was the primary responsibility of the card holder and the bank cannot be held responsible for the same. The bank also advised him that they had taken up the matter with payment gateway for feasible action at their end. The complainant approached the BO who observed that the complainant himself had divulged critical card related information to some unknown person over phone and that it was a case of fraud and further investigation would be possible only after examination of external witness / documents for which BO is not the proper forum. Hence BO rejected the complaint under Clause 13(d) of the Scheme. The AA observed that the complainant himself had parted with the OTP, Aadhar number and shared critical card information to the unknown caller who posed himself as bank official. There was thus, no deficiency in service provided by the bank. In these circumstances, no liability can be imposed on the bank and no relief can be given to the complainant.

5. Renewal of Fixed Deposit (FD): A complainant had two FDs with different maturity dates. Due to his illness, he could not go to the bank at the time of maturity of FDs. Instead, he sent his younger brother to the bank for enquiry about renewal of FDs. The bank authorities told him that FDs would be renewed automatically for the same period. Later, when he went to the bank for renewal of FD, he found that the FDs were renewed from the date he visited bank after maturity, resulting in loss of interest. The bank gave him interest on FD at SB rate for the overdue period i.e., from the maturity date till the date he visited the branch. He brought the matter to the notice of the Branch Manager but as no response was received from the bank for one month, he approached the BO. The bank stated in its submission to the BO that the complainant had not given specific instructions in the account opening form for auto renewal of FDs. However, when the complainant approached the bank, FDs were renewed without wasting any time and the overdue interest for interim period was also paid to the complainant as per the policy of the bank. BO opined that from the available documentary evidence, it was not possible for the office to ascertain veracity of verbal communication between the bank officials and the complainant’s brother as claimed by the complainant. As the complaint required examination of elaborate documentary and oral evidence, BO closed the complaint under Clause 13(d) of the Scheme. As per RBI guidelines on interest rates on rupee deposits, all aspects concerning renewal of overdue deposits have been entrusted to individual banks subject to their Board laying down a transparent policy in this regard. In the absence of the relevant instructions for auto renewal to the bank, the FDs of the complainant have not been renewed. The bank, however, paid overdue interest as per the Bank’s policy. The AA after taking into consideration the facts remanded the case to BO for re-examination.

6. Levy of annual processing charges on shifting of credit facility: The complainant, a company, had availed Term Loan and Cash Credit totaling to ₹140 million from the bank at concessional rate. The account was to be reviewed in a year. The complainant requested the bank for sanction of additional limit of ₹50 million which was not accepted due to rating downgrade and non-achievement of estimated financial parameters. As the additional limit was not sanctioned, the company shifted to another bank. Prior to closing the accounts, the bank withdrew interest rate concessions granted to the firm with retrospective effect and levied Annual Processing Charges (APC) on Term Loan (TL) and 2% penalty for delay in submission of audited accounts. The complainant contested the levy of charges and claimed that the bank had not passed on the benefit of downward revision of interest rates to them, which was a requirement under the terms and conditions of the facility. Since the complainant was not made aware of bank’s decision about increase in rate of interest or levy of penal charges, the complainant sought refund of excess interest debited amounting to ₹2.05 million, APC of ₹0.1 million and ₹0.31 million for not having passed the benefit of reduction in base rate over time. Since the bank did not accept the claims, the complainant approached BO. The BO passed an Award directing the bank to (i) refund penal interest (the company had claimed ₹2.05 million, but the bank could rework the exact amount) as the complainant’s business was in the first year of operation and the complainant had submitted provisional accounts well before the date of review in absence of audited accounts; and (ii) APC charged on TL as the bank failed to produce relevant clause in the accepted terms and conditions for sanction of facilities. The bank filed an appeal against the Award. The AA observed that the bank’s action of charging higher rate of interest with retrospective effect was in contravention of RBI guidelines. The AA, while upholding the Award of the BO for refund of the APC modified it with respect to refund of ‘penal interest’ of ₹2.05 million (to be reworked by the bank) and ordered the bank to (a) refund the additional interest charged (with retrospective effect) by withdrawal of concessions, and (b) refund the excess penal interest charged for delay in submission of audited financial statements.

7. No deficiency of service – non-availability of interest subvention: The complainant had availed jewel loan from the bank in 2012 which was renewed in 2013 and 2014 by remitting interest. Subsequently, he repaid the loan in 2015 and represented to the bank for grant of interest subvention under Agricultural Interest Subvention Scheme (AISS) in 2017. Since renewal of jewel loan account was not eligible for interest subvention, his request was not acceded to by the bank. He lodged complaint with the BO in August 2017. The bank clarified that AISS did not cover jewel loan and also that the complaint was over 22 months old from the cause of action. BO accepted the bank’s contention and closed the complaint under Clause 13(g) of the Scheme, i.e. ‘in the opinion of BO there is no loss or damage, or inconvenience caused to the complainant’. The complainant filed an Appeal claiming additional interest subvention for timely payment of interest and a compensation for mental agony and trauma which he suffered for four years for alleged harassment by bank by not granting interest subvention. The AA observed that as per the extent regulatory guidelines, eligibility for interest subvention required repayment of loan. As the complainant did not repay the loan but merely renewed it by paying the interest, he was not eligible for the interest subvention or compensation. The AA observed that there was no deficiency of service on the part of the bank and upheld the decision of BO.

8. No deficiency in Service – adjustment of maturity receipt of security against overdue loan: The complainant, having two home loan accounts of ₹0.4 million and ₹0.1 million with Equated Monthly Installments (EMIs) of ₹3,000/- and ₹1,350/- respectively, alleged that even after payment of ₹0.26 million in the first account and ₹0.1 million in the second account, outstanding was shown as more than ₹0.5 million and ₹0.1 million respectively and the bank had recovered these dues from maturity proceeds of insurance policy which was kept as security. The complainant approached the BO stating that both his loan accounts had turned irregular due to bank showing “excessive overdue” rather than actual dues and consequently it later turned into Non-Performing Asset (NPA). The bank informed the BO that the complainant did not pay EMIs on regular basis and thus the account had turned into NPA. The BO forwarded bank’s reply to the complainant, advising him to approach the OBO within seven days. As no reply was received from the complainant, the complaint was closed by BO under Clause 13(e) of the Scheme i.e. Complaint filed without any sufficient cause. The complainant filed an appeal. The AA observed that payments made by the complainant were not regular and were essentially towards the interest / charges (except a few) rather than the EMIs and hence the overdue amount increased each month leading to the account becoming NPA over time. Even after issuance of notice under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, the overdue amount was not deposited by the complainant and therefore the bank adjusted the amount from maturity proceeds of his insurance policy, kept as security with them implying that there was no deficiency of service by the bank. The AA remanded the matter back to BO.

9. No ground for complaint – not permitting withdrawal from account using cash withdrawal slip without passbook: The complainant in urgent need of money, went to bank branch for cash withdrawal of ₹1,50,000/- using a withdrawal slip. However, the bank authorities denied payment without the passbook accompanying the withdrawal slip even though he submitted his original Aadhar Card and Pan Card, which were linked to his account. The complainant approached BO. The bank clarified that as the amount involved was high, the complainant was asked to produce passbook. The bank also stated that as per the bank’s guidelines and procedures, withdrawal above ₹1,000/- should be accompanied by a passbook and the same has also been printed in withdrawal slip. As the bank had acted as per their laid guidelines and procedures, BO felt that there was no cause of action against the bank and closed the complaint under Clause 13(g) of the Scheme i.e., ‘in the opinion of BO there is no loss or damage, or inconvenience caused to the complainant’. The AA observed that the bank had acted as per their laid down guidelines and instructions which were also printed on withdrawal slip. Hence, the refusal by the bank to withdraw ₹150,000/- without a passbook cannot be construed as denying of service on the part of the bank and hence there was no sufficient ground for complaint and upheld the decision of BO.

10. Fraudulent withdrawal: The complainant after updating his pass book found that ₹30,000/- had been withdrawn from his account without his knowledge. The bank official showed him the withdrawal slip for the transaction by levying charges of ₹200/-. The complainant found signature on the slip as mismatched with his original one. His request for refund was not accepted by the bank. Not satisfied, he filed a complaint with BO. The bank submitted copy of disputed withdrawal slip and specimen signature available with bank’s record to BO. The BO observed that it was not possible to identify signature on withdrawal slip with specimen signature and the complaint required detailed investigation. The complainant preferred an appeal before the AA. Bank submitted that the official from their Head Office had investigated the matter and during investigation and in the presence of the Investigating Officer and all Branch Officials, complainant had admitted that all the signatures on withdrawal slips and deposit slips were done by him and stated that the withdrawal slip was written by him. The bank further submitted that the signature was also tallied with the specimen signature card, before passing for payment. The bank also submitted that ₹200/- was collected for verification of old record beyond one year as per bank’s instructions. The AA dismissed the appeal.

11. Fraudulent fund transfers – no deficiency of service: An amount of ₹260,000/- was fraudulently transferred in two transactions of ₹250,000/- and ₹10,000/- from complainant’s account. The bank’s investigation revealed that fraudsters used duplicate Subscriber Identity Module (SIM) of customer’s mobile number and received the Unique Registration Number to carry out the transaction. In appeal, the AA observed that net banking transactions using debit card were not possible without login credentials, which are privy only to customer. As no attempt was made to change the login password prior to the disputed transactions, it implied that the fraudster knew the login credentials. Further, in net banking transactions of the bank concerned, the transaction could be completed only after entering grid value printed on the reverse of the debit card of the customer, which is also privy only to the customer and the values are specific for each transaction. The complainant had not reported loss of the debit card also. In view of this, the AA found no deficiency of service on part of the bank and also observed that the fact that the debit card was in possession of the complainant indicated that the complainant only could have entered all credentials (including the random grid values printed on reverse of the card) while performing the disputed transactions and hence there was no ground for complaint.

12. No ground for complaint – withdrawal using Post Dated Cheques: The complainant had a Cash Credit account in his firm’s name and housing loan account in the name of his mother. The complainant alleged that the bank had withdrawn funds from both the accounts without obtaining mandate from him by using seventeen blank (signed) Post Dated Cheques (PDCs) submitted as security. The BO had closed the complaint under Clause 13 (e) of the Scheme i.e. without any sufficient cause. The AA observed that the bank could not provide a copy of the letter having details of the documents received as security for the loan accounts but in the copy of letter provided by the complainant the cheque details seemed to have been added subsequently, as an afterthought. This was corroborated from the fact that all the cheques (except five unused cheques) claimed by the complainant to be received by bank were already used / paid earlier. There was a variation in the cheque numbers as mentioned in the letter to the bank, his complaint and his appeal. Some of the transactions using 17 PDCs were used to credit complainant’s own account, his mother’s account and guarantor’s account. Further, the complainant did not raise the matter for more than a year until SARFESI proceedings started against him. The AA concluded that there was no ground for the complaint and dismissed the appeal.

13. Fair Practice Code for Lenders: The complainant had availed cash credit limit of ₹25 million from the bank. The company liquidated the account with entire outstanding interest on July 31, 2017. On Aug 4, 2017, the bank without any intimation, debited its account with ₹495,080/- being the difference of interest due to decline in the customer’s credit rating. The AA observed that as per extant instructions on “Fair Practice Code for Lenders” the lender should give notice of any change in the terms and conditions including interest rates, service charges etc., to the borrower. The lender should also ensure that changes in interest rates and charges are effected only prospectively. In the instant case, there was no evidence that the bank had informed the complainant about change in credit rating and consequent change in the cost of funds and had charged interest with retrospective effect. The AA therefore allowed the appeal and directed the bank to refund the amount of ₹495,080/-to the complainant together with interest thereon at SB rate.

14. Fraudulent withdrawal from ATM: The complainant’s son tried to withdraw money from ATM but on being informed by ‘another person’ present in the kiosk that ATM was prompting for KYC updation of the account, he left the kiosk. Taking advantage of the situation, “other person” in the kiosk withdrew an amount of ₹40,000/- fraudulently from complainant’s account. The AA observed that even though the complainant was the account holder of the bank, the disputed transaction was done by his son appearing to be a minor and apparently being guided by ‘two other persons’, as seen from CCTV footage. This clearly indicated negligence on part of the complainant as he had given his ATM card and PIN to his son. There was no deficiency of service by the bank in this case. The AA remanded the case back to the BO for fresh disposal.

15. Vishing Calls: The complainant received a phone call on his registered mobile number from a lady who posed as bank’s executive for verification of complainant’s card. The complainant thereafter received SMS on his registered mobile number and shared them with the lady on the call. He thereafter received a call from a shopping mart, for ascertaining his address for dispatch of a parcel costing ₹9,999/-. He was further informed that the amount was debited from his account. The AA observed that the complainant had disclosed the OTPs received on his mobile and was negligent. There was no deficiency on the part of the bank. The AA remanded the case back to the BO for fresh disposal.

16. Unauthorised ATM Withdrawal: The complainant attempted to withdraw cash of ₹1,500/- through an ATM. Since cash was not dispensed, he transacted through another bank’s ATM, which was successful; but he also received SMS alert for debit of ₹8,000/- from his account besides the successful transaction. The AA observed that CCTV footage showed that the cash was dispensed with a delay of two minutes in this transaction whereas in other transactions conducted prior and post this transaction, cash was dispensed immediately. This, along with suspicious behavior of a person who was idling at the ATM and later was shoulder surfing on the appellant indicated that the ATM machine might have been tampered with. The circumstances indicated that the fault was neither of the bank nor of the appellant. The AA remanded the case to BO for disposal in light of the above and also to advise the bank to compensate the complainant as per its board approved customer relations policy in terms of extant regulatory instructions.

17. TDS on pension arrears: The complainant, a retired army pensioner, got the arrears of 6th and 7th Pay Commission. Bank paid the arrears and debited his account towards income tax. Complainant demanded refund of the same stating that no income tax is to be deducted from pension arrears of army retirees. Bank advised the complainant that the income tax deduction was due to non-availability of complainant ‘s PAN details. The BO had closed the case under Clause 13 (e) of the Scheme, i.e. Without any sufficient cause, since the bank had deducted income tax as per the Income Tax Rules. The AA dismissed the appeal and upheld the BO’s decision while advising the bank to provide necessary assistance to the complainant in getting the refund of the deducted amount, from the Income Tax Department.

DISCLAIMER

The Reserve Bank of India does not vouch the correctness, propriety or legality of orders and awards passed by Banking Ombudsman / Appellate Authority. The object of placing this compendium is merely for the purpose of dissemination of information on the working of the Banking Ombudsman Scheme and the same shall not be treated as an authoritative report on the orders and awards passed by Banking Ombudsman / Appellate Authority and the Reserve Bank of India shall not be responsible or liable to any person for any error in its preparation.

APPENDICES

ABBREVIATIONS

¹ Complaint handled includes those pending at the beginning of the year

² The names, addresses and area of operation of the Banking Ombudsman are updated on the website of RBI at /en/web/rbi/complaints/lodge-a-complaint-against-rbi

³ The revenue expenditure includes establishment items like salary and allowances of the staff attached to OBOs and non-establishment items such as rent, taxes, insurance, law charges, postage and telegram charges, printing and stationery expenses, publicity expenses, depreciation and other miscellaneous items. The capital expenditure items include furniture, electrical installations, computers / related equipment, telecommunication equipment and motor vehicles.

⁴ The cases which do not fall under the grounds of complaint specified under Clause 8 of the Scheme and those wherein the procedure for filing the complaint is not adhered to as laid down in Clause 9 of the BOS, are classified as ‘Non-maintainable’ complaints. OBOs return such complaints to the complainants stating the reason and send a copy to bank for suitable action.

⁵ Clause 9 (3) of the Scheme stipulates that, "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 and the bank had rejected the complaint or the complainant had not received any reply within a period of one month after the bank received his representation or the complainant is not satisfied with the reply given to him by the bank". If complainants directly approach the OBO without filing a complaint with their bank, such a complaint is referred to as First Resort Complaint.

⁶ Clause 14 of the Scheme provides that “any party aggrieved by an Award issued by the BO under Clause 12 or by rejection of a complaint for the reasons referred to in Sub-Clauses (d) to (g) of Clause 13 of the Scheme, can appeal to the Appellate Authority (AA) designated under the Scheme.”

⁷ As on September 30, 2018, 68 appeals received during the year were disposed and 57 were in process.