Vision and Goals of the Banking Ombudsman Offices

Vision

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

Goals

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

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

• To enhance the awareness of the Banking Ombudsman Scheme.

• To facilitate quick and fair (non-discriminatory) redressal of grievances through use of IT systems, comprehensive and easily accessible database and enhanced capabilities of staff through training.

1. Customer Service Initiatives by the Reserve Bank of India

1.1 As competition has failed to deliver desired result to safeguard the interests of bank customers, the RBI has to intervene to ensure that the interests of bank customers are protected. Over the years, RBI has initiated several such measures. Some of the important customer service initiatives taken by RBI during the year 2012-13 are enumerated below.

1.2 Implementation of recommendations of the Damodaran Committee: Committee on customer service in banks (Damodaran Committee) had made 232 recommendations in its report. Of these, 155 recommendations stand implemented. Abolition of foreclosure charges on floating rate home loans, introduction of basic savings account, unique identification No. (UID) as KYC for opening ' no frills ' account, differential merchant discount/ fee for debit cards, multi-factor authentication for card transactions, blocking of card by SMS, uniformity in inter-sol charges are some of the important recommendations which have been implemented.

Some of the recommendations which are yet to be implemented are minimum account balance - transparency, uniformity in charges for non-maintenance of minimum balance, charges for basic services, penalty for returned clearing cheques - presenting party (Payee) should be exempt from penalties, customers should be compensated for wrong returns by banks, home loans - no discrimination between existing and new borrowers with floating rates, internet banking - secure total protection policy, zero-liability against loss for any customer induced transaction, onus of proving customer negligence on bank, multi-lateral arrangements amongst banks to deal with on-line banking frauds, compensation. The issues involved in implementation of these are being deliberated upon with the stakeholders.

1.3 Inter-sol Charges

As announced in the Monetary Policy Statement 2013-14, RBI advised banks to follow a uniform, fair and transparent pricing policy and not discriminate between their customers at home branch and non-home branches. Accordingly, banks have been advised that, if a particular service is provided free at home branch the same should be available free at non home branches also. There should be no discrimination as regards inter-sol charges between similar transactions done by customers at home branch and those done at non-home branches.

1.4 Levy of penal charges by banks for delay in re-presentation of cheques returned on technical grounds

In view of complaints regarding cheque return charges levied by banks in cases where customers were not at fault and also of delaying the re-presentation of the cheques, which had been returned by the paying banks under technical reasons, banks were advised that the cheque return charges shall be levied only in cases where the customer is at fault and is responsible for such returns. The illustrative, but not exhaustive, list of returns, where the customers are not considered to be at fault has also been circulated to banks. Further, banks have also been advised that the cheques that need to be re-presented without any recourse to the payee, shall be made in the immediate next presentation clearing not later than 24 hours(excluding holidays) with due notification to the customers of such re-presentation through SMS alert, email etc.

1.5 Payment of pension to the Central Government pensioners - Continuation of either or survivor pension account after death of a pensioner

With a view to reduce the delays in getting family pension after demise of the pensioner, banks were advised that in case the spouse (Family pensioner) opts for existing joint account for credit of family pension, banks should not insist on opening of a new account, when the spouse is the survivor and having a joint account with the pensioner and in whose favour an authorization for payment of family pension exists in the Pension Payment Order (PPO).

1.6 Loss of Pension Payment order in transit:

Against the backdrop of a large number of complaints from pensioners regarding inordinate delay in payment of pension on account of loss of PPOs during transit from one bank-branch to another or from branch to CPPC and non-receipt of PPOs from the issuing authorities etc., RBI advised agency banks to issue instructions to their regional offices/branches authorised to disburse pension to strictly adhere to the procedure laid down in the pension schemes to be followed by pension disbursing bank-branches in the eventuality of loss of PPO in transit and non-receipt of PPO from the issuing authorities etc., to ensure that pensioners get their pension without any delay.

1.7 Bank Customers can ask for CCTV Recording of ATM Transactions

National Payments Corporation of India (NPCI) has directed banks to facilitate providing CCTV recording of failed ATM transactions to bank customers when they ask for it. In its circular NPCI/2012-13/NFS/2737 dated March 26, 2013, NPCI advised its member banks to make a provision in the "Customer Complaint Form" for the complainant to raise a request for the CCTV/camera images if the customer so desires at the time of submitting the complaint form to the issuing bank. The issuing bank shall upload the request for CCTV image while raising the charge-back in the DMS module (Dispute Management System of NPCI). NPCI has clarified that only the request for CCTV / Images can be uploaded through DMS but the recording itself has to be exchanged among the banks in accordance with the existing practice.

1.8 Security in Card Payments

The Reserve Bank has been seeking to enhance the safety and security of card payment transactions – both Card Present (CP) and Card Not Present (CNP) transactions. Besides mandating introduction of SMS alerts, use of additional factors of authentication in case of CNP transactions have also been mandated. In addition, the Reserve Bank has also issued necessary instructions for securing CP transactions based on the recommendations of a Working Group which submitted its report in May 2011. The Working Group inter-alia suggested evaluation of the usefulness of Aadhaar as additional factor of authentication (AFA) for card present transactions. Accordingly, based on the results of the Pilot conducted at New Delhi in December 2012-January 2013, a Working Group has been formed to study the feasibility of Aadhaar as an AFA for CP transactions and other related issues.

The Reserve Bank has advised banks and other stakeholders to put in place certain security measures in a time bound manner to strengthen the security aspects of the eco-system. Some of these measures relate to introduction of AFA for online payments and implementation of digital signatures for customer-based large value payments in RTGS, securing PoS terminals to prevent data compromise as well as putting in place techniques for fraud prevention; placing restrictions on addition of beneficiaries in internet banking accounts and number of online transfers; issuance of international card only on demand by customers and limiting the usage threshold on magstripe cards for international transactions; issuance of EMV card to people who use cards internationally etc.

1.9 Master circulars: The Master Circular on Customer Service which incorporates RBI instructions/ guidelines issued to banks on various customer service related issues such as operations of deposit accounts, levy of service charges, disclosure of information, remittances, collection of instruments, dishonor of cheques, safe deposit lockers, nomination facility, dealing with complaints etc., was updated and placed on the website of RBI on July 1, 2013.

2. The Banking Ombudsman Scheme 2006

2.1 As an effective step towards ensuring best services by banks in India to their customers, The Banking Ombudsman Scheme (BOS) was introduced in the year 1995 by the RBI. The purpose behind introducing the BOS was to provide expeditious and inexpensive redress of customers’ grievances against deficiencies in banking services provided by Commercial Banks, Scheduled Primary Co-operative Banks and Regional Rural Banks. Due to changing levels of expectations of the customers of various banks and the range of new products offered by these banks, the BOS has undergone extensive changes in June 2002 (BOS 2002) and December 2005 (BOS 2006). BOS 2002 introduced “Review Authority” and “Arbitration and Conciliation Procedure” in the Scheme. While augmenting the scope of the Scheme, BOS 2006 removed the above two major provisions of BOS 2002. The BOS 2006 brought in the concept of “Appellate Authority” and made the administration of the Scheme, the responsibility of RBI. In May 2007, the BOS 2006 was amended further to enable appeal against Award or rejection of a complaint for reasons stipulated under the BOS, to the Appellate Authority. The BOS 2006 was amended last in February 2009 to include deficiencies arising out of internet banking. Under this amended BOS, a customer can complain to the Banking Ombudsman (BO) against the deficiencies in almost any banking service including credit cards, ATM and internet banking. In addition, a customer would also be able to lodge a complaint against the bank for its non-adherence to the provisions of the Fair Practices Code for lenders or the Code of Bank’s commitment to Customers issued by the Banking Codes and Standards Board of India (BCSBI).

2.2 Working group for revision and updation of the Banking Ombudsman Scheme 2006:

Introduction of various new banking products coupled with advent of technology in banking warranted a fresh look at the BOS 2006. Further, the Committee on Customer Service in Banks (Damodaran Committee) and the Rajya Sabha Committee on Subordinate Legislation in their report on the BOS had made certain recommendations. In view of this, an internal Working group for revision and updation of the BOS 2006 was constituted by the RBI in July 2012. The Working Group submitted its report in January 2013. Some of the important recommendations of the Working Group pertain to extending the BOS to non-scheduled urban cooperative banks/district and state co-operative banks, modifying the definition of 'bank' in the BOS, pecuniary jurisdiction of BO, opening of new offices of Banking Ombudsman (OBOs), introduction of fresh grounds of complaint, appointment of additional Ombudsman in offices with high volume of complaints, and increasing public awareness about the BOS. The recommendations of the Working Group are being examined by the Customer Service Department of RBI for implementation.

3. Receipt of Complaints

3.1 Fifteen OBOs covering 29 States and 7 Union Territories, handle the complaints received from bank customers on deficiency in banking services under the various grounds of complaints specified in the BOS. During the year 2012-13, OBOs received 70541 complaints. Comparative position of complaints received during the last three years in given in Table 1.

During the year 2011-12 there was an increase of 2% in the number of complaints received over the previous year, whereas in 2012-13 there was a decline of 3% in receipt of complaints compared to previous year.

OBO-wise receipt of complaints

3.2 OBO-wise position of complaints received during the last three years is given the Table 2.

OBO New Delhi, Kanpur, Mumbai & Chennai were the four OBOs which received more than five thousand complaints against banks. These four OBOs accounted for almost 50% of the complaints received by all OBOs.

OBO Ahmadabad, Chennai, Guwahati, Mumbai, New Delhi and Patna recorded increase in complaints received whereas OBO Bangalore, Bhopal, Bhubaneswar, Chandigarh, Hyderabad, Jaipur, Kanpur, Kolkata and Thiruvananthapuram recorded a decline in receipt of complaints over the previous year

On an average, each OBO received 4702 complaints during the year.

Population group-wise distribution of complaints received

3.3 Comparative position of last three years’ Population group-wise distribution of complaints is given in Table 3.

It may be observed from the above table that there has been only marginal change in the population-group wise source of complaints received in the OBOs. The source of complaints remained heavily skewed towards customers from Metro / Urban areas. Complaints from urban and metro areas continued to account for about 72% of the total complaints received as compared to about 28% complaints received from rural and semi-urban areas during the year 2012-13.

Some of the reasons that can be attributed to the greater share of complaints from urban and metro areas are, increased availability of banking services, financial literacy and expectation level of bank customers and greater awareness about the BOS among residents of such areas as compared to their counterparts in semi-urban and rural areas. With increasing penetration of banking services into rural hinterlands and ongoing drives aimed at universal financial inclusion and financial literacy, this mix is expected to undergo significant change in coming years. Marginal increase of 1% in complaints received from rural areas this year is indicative of this trend.

Receipt of complaints Mode-wise

3.4 OBOs receive complaints through diverse modes such as online, e-mails, Fax, couriers, registered / ordinary posts, hand delivery. Comparative position of complaints received through different modes during the last three years is indicated in Table 4.

Post/Fax/Courier continued to remain a popular mode of lodging complaints with OBOs with 72% of total complaints received through this mode. Electronic mode was preferred by 28% of the complainants. As compared to last year, there was a marginal increase of 1% in complaints received through electronic mode.

Complainant group-wise classification

3.5 Continuing with the past trend, majority of the complaints received during the year were from individuals. Break-up of complaints received from various segments of society is given in Table 5.

Bank group-wise classification

Bank-group-wise classification of complaints received by OBOs is indicated in the Table - 6 and graphical presentation thereof is shown in Chart -6.

It may be seen that the highest number of complaints (33%) were received against SBI group followed by other nationalised banks (31%), Private Sector banks (22%) and foreign banks (7%). Compared to last years, there was a fall of 2% in complaints against SBI & Associates, whereas, complaints against Private Sector banks increased by 1%.

The detailed bank-wise (Scheduled Commercial banks) and complaint category-wise break-up of complaints received in the year 2012 - 13 is given in Annex V.

4. Nature of Complaints Handled

4.1 There are 27 grounds of complaints against deficiency in banking services specified under Clause 8 of BOS 2006 for which complaints can be lodged with the OBO. Complaints received under these grounds are broadly categorized into major heads indicated in the Table 7 below.

4.1 Complaints pertaining to failure to meet commitments / non observance of fair practices code / BCSBI Codes were a major ground of complaint with 18130 complaints constituting 26% of the complaints received. There was a decline of 1% in complaints received on this ground over the previous year. A large volume of complaints on this ground indicates lack of awareness about these Codes among bank staff as also the customers. Banks need to devote special attention to this aspect and provide ongoing training to their staff on the Codes.

4.2 With 25% of the total complaints received, Card related complaints was the second largest ground of complaint recording increase of 23% over these complaints received during the last year. Out of total 17867 card complaints 10123 complaints were pertaining to ATM/Debit Cards. Broadly, the reasons for these card-related complaints are; issue of unsolicited cards, sale of unsolicited insurance policies and recovery of premium, charging of annual fee in spite of being offered as 'free' card, authorization of loans over phone, wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, excessive charges, wrong debits to account, non-dispensation/short dispensation of cash from ATM, skimming of cards.

4.3 Loans and Advances, pension payments, deposit accounts, levy of charges without prior notice were other major source of complaints. In Loans and Advances, complaints were mainly related to non-sanction/delay in sanction of educational loans, charging of excessive rate of interest, non-return of Registration Certificate in case of vehicle loans, non-issuance of No-Due Certificate, non-return of title deeds of properties pledged, wrong reporting to CIBIL, etc.

Complaints related to pension though remained static at 8% over last three years, still this is a major area of grievance. These complaints were mainly regarding delayed payments, errors in calculations, difficulties in switching over to family pension.

Non-maintenance of minimum Average Quarterly Balance (AQB) in savings and current accounts, renewal charges, processing fees and pre-payment penalties in loan accounts, cheque collection charges were some of the reasons for complaints pertaining to levy of charges without prior notice.

5. Disposal of Complaints

5.1 Table 8 and Chart 8 below indicate a comparative position of disposal of complaints by OBOs. During the year 2012-13, OBOs handled 75183 complaints. This, comprised of 4642 complaints brought forward from the previous year and 70541 fresh complaints received during the year under review. Of these, 69704 complaints (93%) were disposed of during the year 2012-13.

BO office wise position of complaints disposed during the year 2012-13 is indicated in Table 9 below:

5.2 Classification of complaints- Maintainable / Non Maintainable

The complaints which do not pertain to grounds of complaint specified in the BOS and those complaints where procedure for filing the complaint laid down in the BOS is not followed are classified as non-maintainable. All other complaints are classified as maintainable and dealt with as per the provisions of the BOS 2006.

Table 10 indicates classification of complaints disposed by all the OBOs during the last three years. Of the 69704 complaints disposed during the year 2012-13, 56% complaints were maintainable.

Over last three years, percentage of maintainable complaints has increased gradually from 49% in 2010-11 to 56% in 2012-13. This indicates increasing awareness about the applicability of the BOS among bank customers.

5.3 Mode of disposal of maintainable complaints

Thrust of the BOS is redress of grievance by reconciliation and mediation. Where both the parties do not come to settlement despite BO’s mediation, the BO resorts to passing an Award. Table 11 and Chart 10 below indicate the mode of disposal of Maintainable complaints.

Of the total maintainable complaints, 50% complaints were resolved by mutual settlement. Awards were passed in 1% of the cases, whereas 49% of the complaints were rejected/withdrawn (118).

Maintainable complaints are rejected on account of reasons such as out of pecuniary jurisdiction of the BO, requiring consideration of elaborate documentary and oral evidence and the proceedings before the Banking Ombudsman are not appropriate for adjudication of such complaint, without sufficient cause, no loss or damage or inconvenience caused to the complainant. Concerted efforts to increase awareness about these issues are being made by the OBOs to reduce the proportion of complaints getting rejected.

5.4 Awards Issued:

During the year BOs issued 312 Awards. OBO-wise position of Awards issued during the year 2012-13 is indicated in Table 12 below:

5.5 Non-Maintainable complaints

Non-maintainable complaints include first Resort complaints, subject matter of the complaint outside the scheme, complaints outside the BO jurisdiction, complaints against entities other than banks, time-barred, pending in Courts/other fora, frivolous complaints etc. In all such cases the complainant is advised about the reason for his complaint being not processed under the BOS. During the year 2012-13, 44% of the complaints received were non-maintainable. However, over the last three years, this percentage has come down from 51% to 44%.

5.6 Reasons for rejection of complaints

Table 13 below indicates the number of complaints rejected for various reasons.

5.7 Complaints not on grounds of complaints under BOS

The grounds on which complaints can be lodged with the BO are specified under Clause 8 of the BOS. Complaints which are not covered under these grounds are rejected. This was the major reason for rejection of complaints during the year 2012-13 constituting 27.24% of the complaints rejected.

5.8 First resort complaints

BOS stipulates that before approaching BO, the complainant must approach his bank first for redress of his grievance. If no reply is received from the bank within one month or the complainant is not satisfied with bank's reply, he can approach the OBO. Such complaints received in OBOs are rejected and the complainant is advised accordingly. These complaints are forwarded to the bank concerned for suitable action. During the year 2012-13 12.28% of the complaints received were rejected as FRCs.

As recommended by the Committee on Customer Service in banks (Damodaran Committee), the On-line complaint form placed on the RBI website for lodging of complaints with the OBOs was modified to divert the first resort complaint to the respective bank online since July 2012. During the year 2012-13, 5553 FRCs were diverted directly to concerned banks through this Module. OBOs also have option to send the FRCs received physically to concerned banks through this Module which provides for uploading of scanned documents. OBOs sent 3729 FRCs to concerned banks using this Module.

5.9 Complaints requiring elaborate evidence

In terms of Clause 13 (c) of the BOS, BO can reject a complaint at any stage if it appears to him that the complaint made is requiring consideration of elaborate documentary and oral evidence and the proceedings before the BO are not appropriate for adjudication of such complaint. During the year OBOs rejected 7.57% of the complaints under this clause.

5.10 Complaints made without sufficient cause

If BO is of the opinion that the complaint made is without any sufficient cause, such complaints can be rejected under Clause 13 (d) of the BOS. In such complaints, the bank concerned might have acted as per the covenants of the products and service contracts. During the year, 0.67% of the complaints were rejected under this clause.

5.11 Rejection of complaints due to other reasons

Complaints outside the BO's territorial limits, complaints time-barred, dealt with earlier, complaints pending in other fora, frivolous complaints, beyond pecuniary jurisdiction of the BO, complaints pertaining to other institutions, not pursued by the complainants, complaints involving no loss to the complainants were other reasons for rejection of complaints.

5.12 Age -wise classification of pending complaints

Table 14 and Chart 12 below indicate age-wise classification of pending complaints.

OBOs disposed 93% of the complaints handled during the year 2012-13. At the end of the year 5479 (7%) complaints were pending at all OBOs. Out of these, 4.36% of the complaints were pending for a period of less than one month, 2% complaints were pending for a period between one to two months, 0.6% complaints were pending for a period between two to three months and only 0.04% complaints were pending beyond three months. Generally OBOs try to dispose of complaints within the shortest possible time. Delays in resolution are on account of insufficient information/documents submitted, delays in getting information from parties.

5.13 Complaints per officer

Table 15 and Chart 13 below indicate complaints 'per officer' in respective OBOs.

On an average each officer in the OBOs received 449 complaints this year.

6. Cost of Running the Scheme

6.1 Total expenditure incurred for running the BOS is fully borne by the RBI. The cost includes the revenue expenditure and capital expenditure incurred on administration of the BOS. 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 vehicle.

During the last three years the aggregate cost of running the BOS has increased from Rs. 261 millions in 2010-11 to Rs. 315 millions in 2012-13. Average cost of handling a complaint has increased from Rs. 3619 to Rs. 4468 per complaint during this period.

BO Office wise 'Per-Complaint Cost’ for the year 2012-13 is given in Table 17:

7. Appeals against the Decisions of the BOs

7.1 The complainants as well as banks have the option of appeal against the decision of the BO for cases closed under certain clauses of the BOS 2006. All such appeals are classified as maintainable appeals as per the enabling provisions of clause 14 of the BOS 2006. The Deputy Governor in charge of the department of RBI administering the Scheme (Customer Service Department) is the Appellate Authority. The secretarial assistance to the Appellate Authority is provided by the Customer Service Department of the RBI. The department also receives representations against decisions of the BOs, that are not appealable as per the extant provisions of the BOS 2006. These representations are also processed in the department.

Table 18 and Chart 15 below indicate the consolidated data of appeals/representations.

7.2 During the year 360 appeals/representations were received out of which, fifty two were maintainable as per the provisions of clause 14 of the BOS and 308 were representations pertaining to complaints closed under the non-appellable clauses of the Scheme.

Position of disposal of maintainable appeals during the year 2012-13 is as under:

Out of thirty six appeals disposed during the year, in five cases BO's decision was set aside. All the 321 representations arising out of complaints closed under non-appealable clauses of the Scheme were disposed during the year.

The OBO wise position of appeals/representations for the year 2012-13 is given in the Table 19

8. Complaints received through Centralised Public Grievance Redress and Monitoring System (CPGRAMS)

CPGRAMS is a web based application developed by the Department of Administrative Reforms and Public Grievances of Government of India for receipt of complaints from public. Customer Service Department is the Nodal Office for RBI for this portal. 15 OBOs are sub-ordinate offices which receive complaints forwarded by the Government of India through this portal.

9. Applications received under Right to Information Act, 2005

The Banking Ombudsmen have been designated as the Central Public Information Officers under the Right to Information Act 2005 to receive applications and furnish information relating to complaints handled by the OBO. During the year OBOs received 895 requests under RTI Act. The OBO wise position is indicated in the Table 21

10. Other Important Developments

10.1 Annual BO Conference

The Annual Conference of Banking Ombudsmen was held on January 4, 2013 at RBI Mumbai. The Conference was inaugurated by the Hon'ble Governor, Dr. D Subbarao. In his inaugural speech the Governor expressed satisfaction on the commendable job being performed by the Banking Ombudsmen and the banks, within their ambit, resultantly witnessing considerable improvement in the area of customer service and grievance redressal. While highlighting the importance of town-hall events being organised by the Banking Ombudsmen in co-ordination with banks as a valuable source of customer feedback, the Governor stressed that these events should not lose its objectivity and should be executed in its true spirit. Considering that the Banking Ombudsman Scheme remained largely an urban-literate phenomenon, the Governor desired that the senior officers of banks and RBI may make it a point to visit at least a few remote rural and semi urban branches every year to understand ground realities. He urged that requisite efforts be made to reach out to those segments and geographies that remain unserved or underserved. Governor, also urged to identify five best practices for the banks and obtain five commitments from the Banking Ombudsmen during the conference.

Speaking on the occasion, Deputy Governor, Dr. K C Chakrabarty said that though the fact that the offices of the Banking Ombudsman receive more than 70000 complaints a year bears a testimony to the credibility of the Banking Ombudsman Scheme, it also reflects on the poor redress system of banks as it shows that the customers repose greater faith in the Banking Ombudsman. He emphasized banks to make efforts to strengthen their grievance redressal mechanism by proactively reviewing their processes, improving efficiency and delivering promised services in a fair, non-discriminatory and transparent manner. He stressed that the banks needed to address issues of safety and security in electronic banking to increase customer confidence and also to bring in uniformity in the service charges levied.

The Conference was attended by the Top Management of RBI, Director DFS, Ministry of Finance, GoI, Chairman IBA, SBI, CMDs/CEOs of major commercial banks in Public and Private Sector, BCSBI, CAFRAL, IRDA, SEBI, CIBIL and NPCI.

Box I: Annual BO Conference 2012 - Five commitments by Banking Ombudsmen

1. QUICK TURNAROUND TIME - Shorter time taken to deal with the complaints will instil confidence in the people in the grievance redress mechanism of the Banking Ombudsman Scheme. In this regard, Banking Ombudsmen should endeavour to dispose of complaints registered over the Complaint Tracking System (CTS) within a maximum of two months.

2. ACCESS TO THE COMPLAINT TRACKING SYSTEM Facility to be given to Banks: The banks and the offices of Banking Ombudsmen should fully utilise the CTS feature that supports uploading of documents/queries/clarifications, etc. by banks and the Banking Ombudsmen. Customer Service Department of RBI will create necessary access for the Principal Nodal Officers of the banks to enable them to monitor the position of bank-wide complaints at a single location. This will facilitate quicker action as well as less-paper handling of cases as a part of our ‘go green’ efforts.

3. INTER DISTRICT MOBILITY OF BO WITHIN THE STATE - Banking Ombudsmen should be mobile, make efforts to adjudicate cases by taking their office as close to the complainant as possible. This will not only increase awareness but also the faith of the common person in the Banking Ombudsman Scheme, who would feel empowered by the opportunity to present their case in person. The Banking Ombudsmen may hold sittings at districts of their region depending on larger incidence of complaints from a particular jurisdiction.

4. BLOG SITE - The Banking Ombudsmen may exchange information and post important decisions on a dedicated blog-site to encourage greater knowledge dissemination.

5. IBA-NPCI BRIDGE FOR RESOLUTION OF ATM DISPUTES - In order to speed up the dispute resolution mechanism in ATM transactions as also to ensure technically competent resolution in the disputes involving two banks, the IBA and NPCI would jointly evolve a platform for dealing with such cases. The offices of Banking Ombudsmen would admit these complaints only if these remain unresolved at the end of this process. In all ATM related disputes before the Banking Ombudsmen, the banks’ submissions should be from a senior IT official designated for the purpose.

Box II. Annual BO Conference 2012 - The five best practices for banks:

1. ACKNOWLEDGEMENT OF ALL APPLICATIONS/REQUESTS Issuing an acknowledgement of customer level request is not a uniform practice. Consequently, several grievances and service requests as also potential business requests go unnoticed/unacknowledged and unaccounted for. Banks, therefore, must put in place a system of acknowledgment of receipt of all kinds of customer requests. This will ensure that the customers as well as non-customers have access to the banking system and its grievance redress machinery in case of need.

2. FEEDBACK ON QUALITY OF SERVICE EXPERIENCE - Banks need to evolve a quick and easy way to register feedback on service quality/complaints through such means as text messages viz. ‘SMS Happy/Unhappy’ using mobile telephony. In all such cases, the banks shall revert to the customer early, preferably within 48 hours. This will go a long way to improve the customers’ faith in the redress system and would be an effective feedback mechanism for the banks to assess and further improve their services.

3. NO DISCRIMINATION BETWEEN HOME/NON-HOME CUSTOMERS - The banks believe that customers should get basic banking services at all the branches, home or otherwise. Banks will decide the basic retail banking services that will be offered to non-home branch customers. These services and charges applicable at non-home branches will be standardised and charges transparently displayed / notified for information of the public and customers. Banks will simultaneously develop safety measures to ward off threats geared against fraudulent machinations.

4. SAFETY AND SECURITY OF e-TRANSACTIONS - For ensuring safety and security and thereby building customer confidence in electronic banking, banks shall endeavour to work out a policy on zero liability/compensation/insurance at appropriate cost including customer education and hand holding sensitization efforts. Banks shall do all that is required to make electronic banking safe for the customers. These measures inter-alia will include setting appropriate limits in regard to the amount, frequency, number of third party beneficiaries etc.

5. DEDICATED HELPLINE - Misinformation about banking products often gives rise to customer complaints. Banks should set up a dedicated Helpline manned by experienced personnel to impart correct and crucial information about the products to the customers. Frontline staff should also be in a position to explain the features of all Banks’ products to the customers.

10.2 26th Conference of State Finance Secretaries

The 26th conference of the State Finance Secretaries was convened by IDMD, RBI in Mumbai on May 21st, 2013. While inaugurating the Conference, the Governor urged State Finance Secretaries to visit a few districts to get first-hand information on problems faced by pensioners and initiate corrective action.

During the Conference, CGM, CSD highlighted certain issues related to pension, cyber-crimes, mis-selling of third-party products. It was decided that the State Governments would endeavour to ensure uniformity in pension regulations and alignment of the same with the central pension regulations, to the extent possible. They were requested to align their identification requirements to the KYC norms of RBI for banks and to partner with banks for prompt and correct payment of pension, wherever direct electronic payment has not been embraced. It was also decided that they would associate themselves with the BOs during the awareness programs and sensitize the police machinery for prompt lodging and investigation of cybercrimes. In order to curb mis-selling of third party products and pre-empting financial frauds, it was decided that the State Governments would coordinate with RBI and provide market intelligence and critical information for prompt regulatory intervention.

10.3 Open House event

Dr K C Chakrabarty Deputy Governor participated in an Open House event organized in Mumbai on June 03, 2013 by one of the NGOs committed to protection of consumer rights. The major issues discussed/debated were competition not having intended consequences for consumers of banking services, de-regulation of interest rates/service charges had resulted in exploitation/cartelization, mis-selling of third party products by banks, misreporting by banks to CIBIL and the consequent harassment, RBI to decide on reasonableness of charges and not delegate to IBA/Board of banks, simplification of KYC norms, improving effectiveness of grievance redress mechanism and regulating the sale of gold coins by banks.

10.4 Regional Conferences of BOs

The lead OBO of every zone has been entrusted with the responsibility of organising and conducting the Regional Conferences of Banking Ombudsmen in their zone. The main purpose of such Conferences is to ensure uniformity in decision making among the BOs and to exchange views on important systemic issues. During the year all nodal offices organized such conferences in their zone. On sidelines of these conferences, a meeting is also held with the Zonal Heads of major banks of the region to discuss customer service related issues of topical interest and sharing of regulatory concerns and expectations with banks,, besides discussing practical issues, problems & obstacles impeding prompt resolution of customer grievances.

10.5 Meetings with Nodal Officers/Controlling Heads of banks

In order to ensure quantitative and qualitative resolution of complaints as also to get feedback from the banks, periodical meetings were held by OBOs with Nodal Officers of the banks. Such regular meetings with nodal officers help in ironing out problems in resolution of complaints. Wherever problems persist and adequate responses to complaints are not forthcoming, the matter is taken up with the respective controlling heads.

10.6 Offsite sittings of Banking Ombudsmen

During Annual Banking Ombudsmen Conference held on January 4, 2013, the Governor, RBI had highlighted the need to broaden the reach of BOS by increasing mobility of the BOs within their jurisdiction by identifying districts of the region and putting in place system of conducting sittings at such places. Taking this forward, OBOs organized sittings at district headquarters to resolve complaints pertaining to the branches of that region. During these sittings attempts were made to resolve complaints on-the-spot. Considering the response and the added benefit of reaching out to complainants and making the scheme popular, the initiative has proved very effective.

10.7 Spreading Awareness about BOS 2006 - Efforts of OBOs

10.7.1 Town Hall Events

As decided in the Annual Conference of Banking Ombudsmen 2011 Town-Hall Events were organized by all OBOs mainly in Tier II cities within their jurisdiction. The objective of organizing such events is to create awareness among the public on how to transact responsibly in their dealings with banks and in the case of a dispute or grievance, the avenues available to the customers under the individual banks’ internal grievance process as well as recourse to the Banking Ombudsman. These events are conducted in local language and Hindi. During the year OBOs conducted (36) Town Hall Events at places indicated below.

10.7.2 Awareness Campaigns and other initiatives

Considering the fact that the OBOs are mainly located in State capitals only, the OBOs engage in activities to spread public awareness about the BOS in rural and semi-urban areas. During the year 15 OBOs situated across the country organized various awareness campaigns/outreach activities within the area of their jurisdiction.

A large number of villagers, school, college students, bank customers, bank officials of public and private sector banks, representatives from Pensioners’ Association, Depositors’ Association are involved in these awareness programmes. Information about salient features of the BOS, latest guidelines issued by RBI, BCSBI Code, issues related to pension, education loans, precautions to be taken in using ATM cards, genuine vis-à-vis counterfeit currency notes etc. is given to participants and their queries on these issues are also replied.

OBOs also participated in the outreach programmes, financial literacy camps organized by the Rural Planning Credit Department of RBI.

Documentary films, publicity through local newspapers, All India Radio, Doordarshan, setting up stalls at various public festivals like Pushkar Mela, Kumbha Mela, Bikaner Camel Fair, Winter festival of Mount Abu etc, participating in trade fairs, book exhibitions, live interactive programmes on Doordarshan, AIR were some of the measures initiated to spread awareness about the BOS.

10.7.3 Sharing of information with Media

The practice of sharing information on complaints handled by OBOs with local media started after conclusion of the Annual Conference of Banking Ombudsmen 2011, is well received by local press. During such Press Meets BOs share information regarding complaints received and resolved, including important cases and awards given. These Press Meets are extensively covered in several newspapers, including Hindi and vernacular languages.

10.7.4 In-cognito visits to bank-branches:

During the year, random In-cognito visits of bank branches were undertaken by OBOs. BOs also visited some bank branches during outreach programmes to assess the quality of services extended by the branch to customers and members of public in general. During these visits compliance with the requirements under clause 15 of the BO scheme i.e. Display salient features of the scheme for common knowledge of public, was also ascertained. The findings of such in-cognito visits are discussed with the branch officials as well as Nodal Officers so as to improve upon existing system and procedures and to excel in service rendered to the bank customers.

10.7.5 Knowledge sharing - Capacity building:

OBOs organized meetings with branch heads / staff of banks, arranged workshops for bank managers, participated in banker-customer meets arranged by banks, meetings of Committees constituted under the Lead Bank Scheme/DCC and SLBC and Customer Service Centres, delivered lectures to bank officials, college students, pensioners army jawans on various provisions of the BOS 2006, arranged Knowledge Sharing Programmes in co-ordination with banks,

With a view to up-grading skills of Dealing Officers of OBOs and to help them better understand and appreciate the nuances of the underlying transactions, OBOs arranged in-house training programmes on subjects like net-banking, ATM operations, pension etc. OBOs also arranged sessions with other BOs for sharing of experience with staff of the OBO.

Annex - 1
Name, Address and Area of Operation of Banking Ombudsmen

Annex - 2
Important Notifications Relating to Customer Service issued by the RBI in 2012-13

Annex - 3
Exemplary Cases dealt with by BO offices during 2012-13

LOANS & ADVANCES

1. A customer was sanctioned home loan of Rs. 8 lakh at 8.25% under a scheme. As per the scheme, the rate of interest was fixed for the first two years and floating thereafter. The loan was sanctioned on January 20, 2010. The offer letter specified that this offer would be valid for disbursement availed till March 31, 2010. However, on February 04, 2010 the bank informed that the said scheme was withdrawn with effect from January 31, 2010 and the new rate of interest would be 8.75% and in case the customer intended to continue availing of the loan, he would have to sign a revised acceptance letter. As the customer was in need of the loan at that particular point of time, he signed the revised acceptance letter. The loan was disbursed on February 10, 2010.

The complainant’s contention was that as per initial sanction letter, he was entitled to avail of the loan at 8.25% since the disbursement was before March 31, 2010. The circular regarding withdrawal of scheme stated that home loan applications entered in the system till January 31, 2010 would get disbursed under the scheme. The bank indicated that the complainant had requested for loan disbursement in February 2010 i.e. after discontinuance of the scheme and hence the revised sanction letter with the new scheme was issued to the customer on February 04, 2010 and loan disbursed on February 10, 2010.

It was apparent that there was a clear delay by in entering the sanctioned home loan application in its system. Meanwhile, the scheme was withdrawn. However, the loan applications already entered in the system till January 31, 2010 could get disbursed under the old scheme. As such, due to the bank’s mistake / delay, the customer was forced to accept the revised sanction letter. The OBO took up the matter and on calling for various documentary evidence bank accepted its mistake and credited an amount of Rs. 20,896/- to the customer’s account against adjustment of excess interest charged.

2. The complainant who had availed housing loan alleged that when the loan was sanctioned, he was made to take insurance policy. He was made to understand that the premium of this policy was to be paid once only. But the bank kept on deducting the premium every year from his account. When the matter was taken up, the bank maintained that the premium was deducted with concurrence of the borrower to protect his heirs from the incident of the loan liability in case of death of the borrower during the pendency of the loan. When the bank was asked to provide documentary evidence i.e. mandate or concurrence of the borrower, bank replied that he was advised verbally about this. The bank was advised to refund the insurance charges so deducted, since neither a mandate was taken from the complainant nor he was informed in writing before taking the insurance policy.

3. The complainant had applied for education loan for higher studies in the month of February 2013. Even after the submission of all documents the branch official made the complainant visit the branch several times without advising proper formalities. In the process, complainant was running out of time as he had to deposit his son’s fees in the medical college before the due date. The complainant approached the OBO for redress of his grievance. On taking up the matter with the bank, the loan was disbursed after completion of formalities.

4. Complainant had taken a personal loan of Rs.5 lakh and had issued Post Dated Cheques (PDCs) for all the EMIs including interest payment. However the bank did not present all the PDCs in time and levied a penalty of Rs. 10,410/-. The complainant represented to the bank for refund several times but did not get any response. He approached the OBO. The matter was taken up with the bank. After rigorous follow up by the OBO, the bank informed that after discussions with the complainant, an amount of Rs.9500/- was refunded.

5. The complainant, who had taken a car loan of Rs.5,12,000/- had issued standing instructions to deduct EMI of Rs.10,760/- from his Savings Bank account. He asserted that he maintained sufficient balance in his account in order to facilitate the deduction and also provided the bank statements in support of his claims. He alleged that despite of sufficient balance his S B account and even after repeated requests from his end, the bank was irregular in deducting the installments. In August 2011, he paid entire outstanding and the bank had issued a certificate of “No Dues”. After liquidation of the loan, he made repeated requests to the bank to cancel the hypothecation by issuing an NOC and by signing the requisite FORM 35. But the bank refused to remove the hypothecation. The complainant wanted to sell the car after getting the NOC. But due to bank’s negligence he could not sell the car. He also complained that as one year had already passed, the car’s value depreciated and it caused irreparable financial loss to him. He requested the BO to order the bank to cancel the hypothecation immediately and compensate him with an amount of Rs. 1,50,000/-. In conciliation meeting the bank authorities submitted that there was some error in the account of the complainant. Though his account showed nil balance, actually some amount was due from him. However, bank could not substantiate its claim. After examining all the documents, the BO observed that as No Dues Certificate had been issued it was clear that the complainant had repaid the loan in full. The bank admitted that the certificate was genuine. BO observed the bank must honour what they have committed. Bank’s representatives had a teleconference with their higher authorities and requested the BO for some more time. The BO allowed them to convey their decision by November 21, 2012 and said that if they did not submit the reply by the stipulated date, he would pass an award. The bank did not submit the reply within the stipulated time. The Nodal officer of the Bank was asked to report to the OBO on December 3, 2012 and submit the status report but there was no response.

In the circumstances, the BO opined that all this reflected the callous and irresponsible attitude of the bank. The bank had totally failed to discharge its duties and responsibilities towards the customer and to the OBO. The BO therefore passed an award directing the bank to issue the complainant the “NOC” without further delay and also to make payment of Rs. 10000/- as compensation. The bank filed an appeal against the award before the Appellate Authority which was rejected.

6. A complaint was about the bank not charging the rate of interest as per the terms of sanction letter. The bank's contention was that the sanction letter contained a clause which allowed the bank to alter/amend/vary terms of sanction including the rate of interest. Accordingly, bank had changed the spread from time to time and the rate of interest was charged accordingly.

The action of the bank to change the rate of interest arbitrarily under the plea that the sanction letter permitted such change in terms of sanction including the rate of interest was found to be against the spirit of fairness and transparency in terms of extant RBI guidelines and also the BCSBI Code to which the bank is committed by becoming a member. The action of the bank was considered an unfair practice and a deficiency in service on the part of the bank. An award was, therefore, issued against the bank.

7. The complainant was granted home loan of Rs.5 lakh by a bank. He had stated that the EMIs were being paid regularly without a single occasion of default. However, the bank had issued him a notice under SARFAESI Act 2002 and classified his loan as NPA. The complainant had stated that some photographs were also taken of affixing the demand notice on the front door of his flat. This act of the bank had damaged his reputation in the society as well as in his business circle. On calling for comments, the bank replied that the account was classified as NPA due to technical problem. On BO’s intervention, the bank made necessary rectification in the system and also tendered an apology to the complainant. Bank also submitted that clips from the digital camera were erased. As such, there was no possibility of misuse of the photographs and also that the CIBIL Report did not show any irregularity in the account. Bank was directed to pay compensation of Rs.15,000/- to the complainant for deficiency in the service.

8. The complainant alleged that the bank had delayed uploading of a car loan account payments causing (i) Delay in closure of the loan account (ii) Delay in issuing of NOC (iii) and claim of further amount towards loan dues by the bank. On taking up the complaint with the bank, lapses were observed in starting the recovery of the car loan from the month due by the bank, which caused inconvenience to the complainant such as delay in issuing Non Objection Certificate to RTO. The bank was advised to forego its claim for Rs. 5909/-, close the account and issue NOC to the complainant and ensure no negative CIBIL report.

9. A complaint was regarding levy of inspection and processing fees on the complainant’s loan account for a vehicle. Though the sanction letter had cited floating rate of interest and processing fee as part of its terms, an inspection fee of Rs. 8,000/- per annum charged for three years did not form part of the ioan agreement and its terms and conditions. The bank was advised that as the inspection charges were not disclosed to the complainant at the time of sanction of the loan, charging them subsequently was against the tenets of Fair Practices Code for lenders and hence the bank had to reverse the said charges.

10. The complainant had availed home loan during a special offer period wherein the loan was given at concessional rate of 7.25% interest (fixed). The bank however increased the rate of interest to 12.25% later. The complainant’s contention was that the loan was given at fixed rate and in the agreement copy it was nowhere mentioned that the interest was subject to change and only in case of default can the bank change the rate of interest. When the matter was taken up, the bank informed that the fact that the rate of interest would be reset every three years had not been mentioned in the loan agreement, due to an internal software defect. As the “reset clause” was not mentioned in the original agreement, the bank was advised to stick to the contracted rate of interest. The bank reduced the rate of interest and also refunded the excess interest recovered.

11. A complaint was about delay in closing an educational loan and returning the documents after the unexpected death of complainant's husband. The loan was availed under bank’s own education loan scheme which provided insurance cover for the loan liability in the eventuality of death of any of the parents. On taking up the complaint, the bank advised/ contended that since the parents’ life was covered by LIC of India, the matter could be settled only after receiving the claim proceeds from LIC. As inordinate delay was observed in settling the complaint, BO called the Regional Head and Branch Manager of the bank for a discussion. BO observed that since the one-time premium paid by the complainant at the time of availing the loan was to cover the full loan amount, and there had been lapses by bank in lodging the claim with LIC in time, the bank cannot drag the issue and was bound to waive the entire loan liability regardless of the amount LIC might settle later on. When the bank failed to do so even after one month, a direction was issued to the bank to set off the loan liabilities forthwith and release the documents to the complainant, which the bank complied with.

ATM/DEBIT CARD/CREDIT CARD/INTERNET BANKING

12. In a complaint about failed ATM transaction where the account of the customer was debited though the cash was not dispensed, the complainant asked for refund of the amount wrongly debited. The matter was taken up with both the banks involved. The Issuing Bank maintained that it had raised chargeback but since the transaction and the first complaint were very old, documentary evidence was not available. The transaction was stated to be successful. They also stated having received reply to this effect from Acquiring Bank promptly but could not produce any documentary evidence. The bank was unable to provide any other documents like Cash Balance Report etc., as the same were not made available by the Acquiring Bank. The Acquiring Bank, in its responses, stated that even though the transaction was a suspect transaction as per EJ Log, no excess cash was found in the ATM. As regards CCTV footage, the bank stated that they were keeping 90 days back up only and hence it was not available. The copy of EJ Log however indicated “Transaction Declined” and Response Code “blank”, with remarks as “Contact Bank”. On specifically being asked to explain, why the amount was not refunded when the transaction was not successful as per EJ Log, the Acquiring Bank could not give cogent reason but immediately paid the amount to the complainant.

It was observed from the records / submissions of the banks that neither of the banks appeared to have pursued the matter with due diligence and logically as EJ log was clearly showing the transaction as “Declined”. The dealing officials at both the banks should have given more careful attention before deciding against the interests of the customer. Even if it was a “suspect” transaction based on some other evidence, the benefit of doubt should ordinarily have gone to the customer. As such, it was reasonable to conclude that both the banks were responsible in not ensuring timely re-credit of the disputed amount to the complainant’s account, and hence, liable for payment of compensation /penalty to the complainant. An award was passed directing the Issuing Bank to pay compensation as per RBI guidelines. Apportioning of the liability of payment of compensation between the two Banks was left to be mutually settled by them, subsequently.

13. In a failed ATM transaction for Rs 10,000/- where the account of the complainant was debited despite the fact that the cash was not dispensed, it was observed that all the documents submitted by the bank viz. JP log, switch report etc. were showing it as successful transaction. However, the Cash Verification Report was showing excess cash of Rs.76,800/- on the date of the disputed transaction. The bank was not able to give reasons or details of transaction accounting for the excess cash. BO advised the bank to refund Rs 10,000/- to the complainant.

14. The complainant tried to withdraw Rs.20,000/- using ATM card. He could get only Rs.14,500/- while rest of the amount was retracted. But his account was debited for Rs.20,000/-. The BO called for required documentary evidence from the bank. All the reports submitted by the bank showed the disputed transaction as successful and no cash was found excess on that particular date. However, it was observed that there was unusually high number of notes in divert tray reflected in Cash Balancing Sheet. Further, the retraction facility was not disabled on the date of disputed transaction on that particular ATM. The bank failed to provide details of notes in divert tray and was thus advised to pay the short dispensed money of Rs.5,500/- to the complainant.

15. The OBO received a complaint about unauthorised withdrawals from the complainant’s Savings Bank account between October 17 and November 6, 2011. The complainant had received first SMS alert of withdrawal only on November 2, 2011. When he contacted his branch, instead of registering his complaint, he was advised to contact the bank’s call centre. The call centre personnel, when contacted, informed that the debit was due to technical fault and the issue would be resolved within a week’s time. SMSs intimating withdrawals from his account continued and despite several attempts, he could establish contact with the call centre again only on November 6, 2011. At that point of time, he was informed that the withdrawals had taken place at overseas ATMs and were fraudulent. By the time the bank blocked his card, a total amount of 163,668/- had been withdrawn from his account.

On taking up the matter, the bank contended that the complainant might have negligently passed on the information to fraudsters and it was the responsibility of the customer to safe-keep the vital information about his card. The bank also stated that SMS alerts were sent in respect of all the disputed withdrawals right from the beginning. The bank also contended that on contacting the call centre, the complainant opted for the wrong service relating to non-disbursement of funds from ATM and when asked by the call centre personnel whether he had not received funds and his account was debited, he replied in affirmative, which made them to believe that the machine had failed to deliver cash (such cases being automatically settled by the system within seven days) and hence his account was not blocked resulting in further withdrawals. However, bank could not provide documentary proof for sending SMS alerts prior to November 2, 2011. From the recording of conversation between the customer and the call centre, it was observed that the complainant had clearly mentioned that he received an SMS message early in the morning about an ATM withdrawal which was not made by him and his card was with him, but the call centre personnel suggested that it was technical error which would be settled within seven days and complainant’s account would be subsequently credited.

The complainant categorically denied disclosing his card information to any one and stated that the card was with him and that he did not travel outside India during the period. The bank was not able to prove otherwise. Considering the deficiency on the part of the bank, an award was passed against the bank to compensate the complainant to the extent of unauthorised withdrawals made from his account

16. The complainant alleged that while he tried to withdraw Rs.10,000/- from the ATM of other bank, the machine did not dispense the cash but his account was debited. On taking up the matter with the bank, the bank submitted that the disputed withdrawal transaction was successful and forwarded relevant documents in support of their claim. On perusal of CCTV footage, it was observed that the complainant tried thrice to withdraw money. While the first two attempts were unsuccessful, third attempt was successful, but he left the premises before the cash was dispensed. It was also observed that within a few minutes, another customer walked into the ATM and tried to withdraw Rs.8,000/-, but the transaction was not successful as cash was lying in the dispenser slot. It could be clearly seen in the CCTV footage that the second customer had picked up Rs. 10,000/- lying in the dispenser slo though his transaction for Rs. 8,000 /- was declined. He was seen counting the money twice and looking confused. Further, when his account statement was verified, it was noted that there was no corresponding debit in his account for his failed transaction. ATM reports also confirmed a failed transaction for 8000/- against his card. Therefore, the relevant CCTV footage received from the bank was forwarded to other bank and it was directed to investigate the matter and recover the amount of Rs.10,000/- and credit the same to the complainant’s account. Accordingly, the disputed amount was refunded.

17. The complainant alleged that an amount of Rs.1,01,076/- was fraudulently withdrawn from his account through net banking. The complainant had last booked railway ticket through net banking before the fraudulent withdrawal. Later 16 transactions involving total amount of Rs.1,01,076/- were done from the account. The complainant did not receive SMS alert for any of these transactions. On basis of the complaint to the bank, the account was frozen and complaint was lodged with police authorities. In the conciliation meeting the bank admitted that they had not investigated the matter as they believed that unless the customer compromises the password, such transactions cannot take place. The BO observed that it was surprising that the bank had not investigated the matter for more than a year and further for more than three months after the complaint was lodged with BO. He ordered that the entire amount of disputed transaction be reversed within seven days after taking an indemnity bond. The bank did not comply, but represented again with similar argument that the fraudulent transactions cannot take place without the complainant compromising password etc. and also the matter was under police investigation. BO then issued award against the bank. The bank went in an appeal against BO’s order. The Appellate Authority upheld BO’s decision and stated that the bank failed in fulfilling its primary responsibility of protecting the interest of the customer as it could not secure its internet banking platform from the existing and evolving threats. The matter being under police investigation should not be a reason to let the customer deprive of rightful money.

18. The complainant's SB account was debited with 90 transactions amounting to Rs. 1,62,000/- between February 12 and 27, 2012. He did not receive any SMS alerts. Bank submitted that POS transactions amounting to Rs.1,67,319/- were debited to the complainant's account. The police obtained information regarding SMS alerts from the service provider company, which was not provided to the bank. In a conciliation meeting the bank regretted its inability to provide SMS logs of POS transactions undertaken as their ATM switch centre did not have logs for more than 6 months. The bank added that the transfer of funds was within the prescribed limit.

It was observed that nearly 100 POS transactions for recharge took place almost continuously during the said period. The OBO observed that notwithstanding the submission that a compromise could have happened, the fact remained that the bank’s systems allowed so many similar transactions on the same day to take place. The bank's system should have prevented the transactions beyond a limit or triggered alert prompting the bank to ascertain from the complainant whether such large scale withdrawals in the account were actually performed by the customer or not. In terms of the extant RBI guidelines, the bank should have a proper system of “online alerts” for all ‘card present/ not present’ transactions without any limit. The bank had failed to do so. The complainant had provided telecom service provider’s record which indicated that SMS alerts were not received for debit which was taken as a clear deficiency of service on the bank’s part. Bank was thus directed to refund an amount of Rs.1,62,000/- to the complainant against indemnity.

19. The complainant used ATM of other bank (acquirer bank) for withdrawal but due to power failure did not receive money. However, the amount was debited to his account. Issuer bank informed that the acquirer bank was not providing the desired information. As the circular on ATM reconciliation issued by Reserve Bank of India dealing with delay in payment of amount of failed transactions places the onus on the card issuing bank to pay the amount and take up with the acquiring bank, in case the delay is attributed to the acquiring bank, acquirer bank was advised for submission of desired documents, but it failed to comply with. Therefore acquirer bank was advised to pay the disputed amount to the complainant directly. Since it was clear that the delay was on account of the acquirer bank which had repeatedly failed in furnishing the information specifically sought for from it, the deficiency of service could clearly be attributed to it. Therefore acquirer bank was advised to pay the disputed amount along with penalty at the 100/- per day.

20. Complainant received a call from Police informing him about a case lodged against him in the Court. He was also getting recovery calls from the bank. He did not have any banking relation with the bank. As it was a case of mistaken identity according to the complainant, he provided the bank with the contact details of its defaulter card holder. He also requested the bank to ensure that his name did not reflect in CIBIL defaulters list. After investigation, Bank apologized to the complainant for the discomfort undergone by him and regretted the recovery calls made erroneously to him for a credit card which was not his.

Taking cognizance of the information provided by the complainant, bank stopped the recovery calls immediately. Taking note of the banks gross deficiency, BO directed the bank to compensate the complainant by paying Rs.10000/- and also ensure that his CIBIL records are updated suitably.

21. Complainant was issued “No dues Certificate’ by the bank in 2009. However, bank continued to treat the account as NPA and assigned the account to an ARC. Accordingly, the card account in CIBIL reflected the adverse remark. Complaint was sent to the bank and they admitted the mistake and initiated steps to rectify the error. However, bank was also advised to pay Rs.5, 000/- as compensation to the complainant for deficiency in service.

22. The complainant alleged that a credit card applied for in 2006 was not delivered to him despite his address remaining unchanged. The bank had nonetheless claimed outstanding dues of Rs.93,930/- from him which adversely affected his credit rating. The bank was also said to have not provided him with the statement of account relating to his SB account into which the proceeds of a personal loan were allegedly credited. The bank conceded that the credit card could not be delivered as the complainant’s residence was unoccupied, that the card was later destroyed but the account was kept in a deactivated state in anticipation of a request for activation. In the meantime, the complainant had accepted an offer of personal loan of Rs.75,000/- against the card through telephonic consent, had its proceeds credited into his SB account in September 2006. The bank also contended that the complainant had repaid one installment in October 2006. Since subsequent installments were not paid, the loan account was closed by transferring the balance to the credit card account which increased to Rs.93,930/- on account of levy of finance charges. During the conciliation meeting, the bank admitted to have offered to waive the finance charges provided the principal liability of Rs.69,500/- was paid. The statement of account revealed that the loan was utilized in full by the complainant within the next two days after disbursement. The complainant’s plea that the source of the loan was not known to him was not accepted by the BO since he had utilized it and repaid one installment and was, therefore, liable to repay it. The complainant agreed to pay the principal dues of Rs.69,500/- within three months, which was accepted by the bank and the dispute was thus amicably settled.

DEPOSIT ACCOUNTS

23. In a complaint regarding debit of Rs. 1,124/- as charges for non-maintenance of minimum balance, the complainant alleged that as per information available about the product on the bank’s website, the Savings Account provided for auto and reverse sweep of funds exceeding Rs. 20,000/- for short term deposit for 181 days and reverse auto sweep from short term deposit to super savings account in multiple of Rs. 1,000/-, in case funds are required to maintain minimum balance requirement. He alleged that he had fixed deposits of Rs. 30,000/- which were not reverse swept when his savings account balance went below minimum balance. Instead, his account was debited for non-maintenance of minimum balance when he withdrew Rs. 5,000/- from an ATM. The matter was taken up with the bank by the OBO. The bank replied that as per terms and conditions of the product, complainant was required to maintain minimum balance of Rs. 20,000/- in the Savings Account. The bank also informed that reverse sweep provision was not available for cash withdrawals with debit cards. The customer withdrew cash of Rs. 5,000/- from ATM through debit card, due to which the balance of the account got reduced below Rs. 20,000/- and therefore the system had not done reverse sweep. The system had correctly levied charges for non-maintenance minimum balance. Considering that most of the present day cash withdrawals from savings accounts are done using debit card, it was found highly irregular that the bank did not disclose this important feature about the product to its customers (that reverse sweep provision was unavailable for cash withdrawal by debit card) either at the time of account opening or through printed brochure or information displayed on their web-site. The bank therefore reversed the charges levied in the customer’s account.

24. The complainant, a lady, who lost her minor daughter and husband in a mishap, alleged that the bank was not paying the proceeds of the fixed deposit held in the name of her deceased minor daughter for whom she was the guardian despite constant follow-up for more than three years. On taking up the matter, the bank clarified that the deposit account was opened on May 3, 2001 in the name of the complainant’s minor daughter without any guardian. Her mother’s signature (i.e., complainant’s signature) was obtained only to attest the child’s date of birth. There was no nomination made at the time of opening the deposit account. The tenure of the deposit was eight years and the deposit had matured on May 3, 2009. As the minor account holder and her father expired before the maturity of the deposit, the bank stated that the maturity proceed of the fixed deposit was kept in Sundry Creditors account and that the deposit claim could be settled, provided, legal heir-ship certificate or Court Order was received in this regard. On examining the bank’s reply and the documentary evidence, it was observed that in the Account Opening Form, the minor’s mother (i.e., the complainant) had signed in place of “Signature of Minor/Guardian” indicating clearly that she was the guardian to her daughter, and the bank’s claim that her signature had been taken only to attest the daughter’s signature was not tenable. The bank was, therefore, directed to settle the fixed deposit proceeds along with applicable rate of interest for the delay. Since the bank had made the complainant to run around for her own money for more than three years, while she was clearly the beneficiary in terms of bank’s own policy, the OBO also directed the bank to pay compensation of 5,000/- over and above the amount due to her.

25. The complainant had availed a housing loan from a bank in 2002 by pledging her FDRs worth Rs.1.0 lakh of another bank as collateral. The housing loan sanctioning bank had encashed the FDRs on maturity in 2006 but erroneously credited the proceeds to the account of another person. When the complainant approached the bank for return of the FDRs upon repayment of loan, the bank replied that the FDRs were not traceable in their record. The complainant approached the OBO. On taking up the matter it was observed that the fault was with housing loan sanctioning bank because i) it had already encashed the FDRs ii) erroneously credited the proceeds to another account iii) did not return the proceeds to the customer / complainant iv) submitted before the BO that FDRs were not traceable in their record. The bank was, therefore, asked to pay back the proceeds to the complainant along with FD rate of interest since the date of encashment of the FDRs.

26. The complainant was maintaining a savings account in a bank. He deposited Rs. 33000/- in his account on 07.12.2009. This amount was not credited to his account. This fact came to light when he withdrew money on October 19, 2010. He complained to the bank authorities. The bank did not give any proper reply and kept the complaint unattended. He approached the OBO for redressal of his grievance.

The bank submitted that the present case was part of a number of such fraudulent withdrawals made by their own bank personnel from a number of bank accounts at the same branch and that a departmental enquiry was already going on to investigate the fraud which was alleged to have been committed over a period of the last ten years. Bank had also lodged an FIR in the matter. The bank also submitted that the amount of Rs. 33000/- which was deposited by the complainant was entered in the ledger without any deposit voucher and it even did not get reflected in the bank’s Cash Scroll. The BO enquired from the bank as to why even after two years of departmental enquiry the bank could not fix accountability. The bank’s representatives replied that they were waiting for the Police Investigation to be over. After examination of various documents like copies of passbook of the complainant, pages of ledger in respect of the savings account and other related papers, the BO opined that unauthorised withdrawals from the account of the complainant, delay in completion of departmental enquiry and simply waiting for the police investigation to be over without any fixed time showed that the bank was not at all serious in redressing the grievance of its customers. The BO was of the opinion that the bank had not acted promptly and with due diligence. The bank was asked to refund the complainant Rs.33,000/- and pay Rs. 5,000/- as compensation for inconvenience caused to the complainant.

27. The complainant had alleged that the bank had changed the mode of operation of the account from 'Single' to 'Joint' without his instructions. Consequently, an amount of Rs.9,55,000/- was withdrawn from the account on various dates. When the complainant sought information under Right to Information Act, the bank informed that they had no records pertaining to the change of operation of the account. Complainant approached OBO and demanded the amount in question, along with compensation of Rs.10,000/-.

The bank submitted a copy of the letter by complainant requesting the bank to add the name of her husband as 'either or survivor'. The bank informed that they had no records with them pertaining to the matter and copy of this letter had been provided by complainant's husband. However, the letter neither contained the signature of her husband nor the same was certified. The bank is required to do a KYC of the person whose name is required to be added and then permit the change. On being asked whether this was done in this case the bank replied that the complainant's husband was having dealings with the bank since long and so it was not done.

From the foregoing it was clear that the bank had changed the mode of operation in the account without having any valid documents/authority. An award was passed directing the bank to restore the status of the account as 'single' and to pay the amount of loss along with compensation of Rs.10,000/- to the complainant.

CHEQUE COLLECTION & OTHER ISSUES

28. The complainant had alleged that a cheque for Rs. 2,25,200/- presented by him for collection was credited to his account on May 6, 2008, however, the same was debited after a gap of four years on June 19, 2012, stating that the cheque was returned unpaid by the payee bank. The contention of the complainant was that the bank should have informed him immediately regarding the cheque return so that he could have taken action against the issuer of the cheque. On taking up the matter with the bank, it was clarified that though the cheque presented by the customer for collection was returned unpaid by the payee bank, the return was not marked properly and the amount was not debited from his account due to problems in migration to Core Banking Solution. The mistake was discovered by the Clearing Section of the bank while reconciling the outstanding unadjusted entries and accordingly, the amount was debited from the customer’s account. In the instant case, it was observed that the bank had debited the amount of the returned cheque after a gap of four years due to delay in reconciliation at their end, leaving the complainant with no recourse for taking up the matter with the issuer of cheque. The bank was directed to re-credit the disputed amount to the account of the complainant along with applicable compensation.

29. The complainant had issued a multi-city cheque favouring his supplier. The cheque was deposited by the beneficiary in the drop-box for credit to his account. The drop-box was broke open and its contents were stolen. The instrument in question being one among the stolen ones, was subjected to fraudulent alteration and presented through clearing and its proceeds credited to the account of a fraudster with another bank. After his initial efforts for redressal proved unsuccessful, the complainant approached OBO. In the conciliation meeting the BO observed deficiencies on the part of all the three banks involved. While presenting bank had failed to provide adequate security to its drop-box the collecting bank had not scrupulously complied with the extant KYC guidelines with respect to the account maintained in the name of the fraudster who encashed the instrument. The paying bank had overlooked the material alterations though they were quite conspicuous. The BO, therefore, ordered all the three banks to share the loss of Rs.83,278/- in equal proportions and make good the amount to the complainant.

PENSION

30. An 84 year old widow of a freedom fighter alleged that her basic family pension under the Swatantrata Sainik Samman Pension Scheme had remained constant at Rs.1000/- per month for nearly two decades, while her basic pension under the State Government Freedom Fighters’ Pension Scheme had been revised upwards on several occasions during the period. The bank contended that it was unable to retrieve the details of actual pension payments made from its records and it had sought these details from the Pension Payment Treasury which was not giving the details. The bank was therefore, not in a position to proceed any further. The bank, therefore, advised the pensioner herself to provide this information to enable it to carry out the revision and pay the arrears, if any.

A scrutiny of the documents obtained from the complainant and the bank revealed serious lacunae in the bank’s compliance with several provisions of the Manual of Pension Payment through public sector banks. The bank had failed to update the entries in the pensioner’s portion of the Pension Payment Order since 1978. Entries relating to payments were not made even in the disburser’s portion as well. The all–important Pension Payment Register was also not updated and reconciliation of the bank’s master data base with that of the Central Pension Accounting Office was not carried out. Furthermore, the omission to revise the basic pension of the complainant had escaped notice during several audits and inspections. The bank’s submissions were, therefore, found to border on callousness and utter indifference to the pensioner’s woes. The bank was, therefore, advised to set right the deficiencies and compute the arrears payable and pay it together with interest for delayed payment as per extant regulatory guidelines. The bank complied and as a result the pensioner received arrears of pension aggregating approximately Rs.13.00 lakh after two decades.

31. The complainant, who had retired on October 01, 2009, was made to shuttle between bank’s branch and the concerned Centralised Pension Processing Cell without any consideration/action on his representation for release of pension payment. The complainant approached OBO for the intervention on May 15, 2013. After intervention of the OBO, the payment of pension finally started from June 2013. The bank was advised to compensate the complainant for the delayed credit as per the extant RBI norms.

32. The complainant alleged that his bank had withheld operations in his pension account for six months and deducted Rs 1,26,000/- and was further demanding Rs1,98,659/- due to inadvertent credit of excess amount by bank itself. On examination, it was observed that the mistake was on the part of the bank as it had credited the excess amount to the complainant’s account. It was observed that the bank should not have withheld the operations in the pension account. On intervention by the OBO, the bank allowed operations in the pension account and agreed to recover the outstanding in suitable installments.

33. As per the applicable pension rules, the family pensioner was entitled to receive an additional 20% pension on attaining the age of 80 years. As the date of birth was not mentioned in the pension payment order, the complainant had submitted a copy of PAN card duly certified by the pension sanctioning authority as proof of age/date of birth. In terms of the extant rules and administrative procedures to deal with such cases, the pension disbursing banks have been authorized to make payment of additional family pension on a provisional basis upto a period of six months by accepting certain documents including the PAN card as proof of age/date of birth. The bank contended that the copy of PAN card submitted by the complainant was not clear and had told the complainant that on receipt of a clear copy of PAN card they would arrange to forward it to the pension sanctioning authority for necessary action and then arrange payment of additional pension.

The BO observed that the bank had failed to explain reasons for not acting on complainant’s representation and making provisional payment of additional family pension as per extant rules. Response of the bank reflected a serious lack of sensitivity to customer service issues concerning pensioners. A copy of PAN card stamped as verified by Branch Manager of the bank, submitted to OBO clearly showed the date of birth of the complainant. The BO directed the bank to pay the complainant an amount equivalent to 20% additional family pension per month as per entitlement along with interest at Bank Rate + 2% per annum on the amount of arrears. The bank was further directed to pay the complainant an amount of Rs.10,000/- as monetary compensation towards costs.

FRAUDS

34. Complainant had a joint account with late husband. Complainant’s husband was suffering from Parkinson disease which had impaired his mental faculties and had made him completely bedridden. On account of his ill health, the complainant was unable to attend to other work like withdrawing money from bank etc. In one of the visits to the bank, the Public Relations Officer approached the complainant and informed that the bank provided several services to senior citizens at their home to save them the trouble of coming to the bank. On expressing willingness to avail such a service the PRO started visiting complainant’s house. During one such visit the complainant told him about husband’s ATM card and also about her difficulty in paying bills like telephone bills etc. The PRO advised her to destroy husband’s ATM card and also offered to pay the telephone bill. She accordingly handed over the ATM/ Debit card to him for destruction and also gave him blank signed cheque towards payment of telephone bill amounting to Rs 640/- as he had stated that he would fill in the correct name of the service provider. On receiving the statement of account the complainant was shocked to notice several withdrawals using her husband’s Debit Card. The cheque given for payment of telephone bill was used by the PRO to withdraw an amount of Rs 20,640/-. The complainant brought the misuse of her husband’s ATM/Debit card to the notice of the Branch Manager. She alleged that Branch Manager tried to convince her that the withdrawals might have been made by her. The Branch Manager allegedly refused to believe her and also refused any responsibility in the matter. She filed an FIR against the PRO and he was subsequently caught by the police. After examining bank’s initial submission and replies to subsequent queries, Spot Resolution was held by the BO which was attended by complainant and also the Branch Manager and Nodal Officer of the bank. BO observed that the PRO was an employee of the bank hence it was not difficult for the customer to believe that the bank had sent its employee to her. She, being a senior citizen, and due to the circumstances, trusted the bank officer. BO directed bank to return entire amount fraudulently withdrawn, subject to complainant giving a suitable indemnity.

35. The complainant having SB account with the bank ‘A’, deposited a cheque issued by her son and drawn on bank ’B’, in her bank's cheque deposit box. The cheque was stolen from drop box and was credited to some other person having account with bank ‘C’. Scanned copy of the instrument indicated clear alterations in date and also that the prefix 'Mrs' before the name of complainant was replaced by 'Mr'. A conciliation meeting was called which was attended by bank ‘A’ and ‘C’. Bank ‘A’ confirmed that as per CCTV footage, the complainant was seen entering drop box cabin but it was not clear that the cheque in question was dropped or not. The box was not tampered with and the lock was intact. Bank ‘C’ submitted the account opening form along with documents submitted by the fraudster to open account with bank C. It was noted that the proceeds of stolen cheque was credited to the account on the very next day of opening the account. Even the profile of the fraudster was incomplete. ATM card was issued to the fraudster along with the Welcome Kit without ascertaining correctness of the KYC and address in particular. Bank ‘C’ did not exercise due diligence while collecting the instrument despite clear alteration on the face and mismatch of name and gender. In view of these facts bank ‘C’ was directed to pay the amount of cheque against indemnity.

36. The complainant stated that a fraudulent withdrawal of some amount took place from his SB account. Despite having the forensic report that the signature differed from the records, bank was not returning the amount. The bank submitted that the Police were investigating the matter and final outcome was awaited. In the conciliation meeting, it was concluded that the payment of cheque was not made in due course. The bank was clearly at fault since, in spite of admitting the fact that the payment was not in due course, it did not release the amount. Since this was not in consonance with the extant instructions, the bank was advised to acknowledge its liability and pay the claim. The bank was directed to pay the amount to the complainant against indemnity.

37. The complainant was aggrieved that an amount of Rs.7.60 lakh was fraudulently debited to their joint account by way of payment of a forged cheque when the original unused cheque leaf bearing the same number was lying in the complainant’s custody. The bank submitted that it had sent application to the Police Department for filing an FIR against the beneficiary of the forged cheque having account with the collecting bank and requested the OBO to close the complaint considering that the matter was sub judice. The bank further submitted that based on internal investigation, it had initiated action against the erring staff and had written to Circle Head for restoration of fraudulently withdrawn amount. Whereas the collecting bank contended that the KYC norms and cheque collection policy of the bank were complied with in this case and that the beneficiary’s account was frozen as soon as drawee bank took up the matter with them. The BO observed that there was a prima facie case of the cheque being fake as the IFSC Code mentioned on the cheque was incorrect and that it was passed by the bank without due diligence and there was inordinate delay in seeking sanction of competent authority for refund of amount. In conciliation meeting officials of drawee bank owned up to negligence on their part. Since drawee bank had failed to protect the interest of its customer, BO passed an award directing the bank to restore the amount of Rs.7.60 lakhs to the account of the complainant along with interest as applicable on Fixed Deposit from the date of debit till its restoration plus 100 basis points extra. The bank appealed against the award issued by the BO which was rejected by the Appellate Authority.

OTHERS

38. A complaint was from a company regarding delay by the bank in forwarding application to SIDBI for subsidy under Credit Linked Capital Subsidy(CLCS) scheme as a result of which they have been deprived of assistance of Rs.1,500,000/- from the Central Government. On taking up matter, the bank advised that the complainant’s application was turned down by SIDBI due to receipt of application after due date. The bank again submitted the application to SIDBI for reconsidering, as a special case, but SIDBI turned it down. Since deficiency of service was observed on part of the bank, the OBO advised the bank to make good the loss suffered after getting confirmation that the complainant was eligible for subsidy under the revised CLCS scheme. In compliance, the bank credited an amount of Rs.1,500,000/- to the complainant’s account against indemnity.

39. The complainant, a senior citizen represented that the bank had issued him Tax Deducted at Source (TDS) certificate on interest paid on Term Deposits for the years 2008-2009, 2009-2010 and 2010-2011. However, the amount of TDS did not reflect in the Annual Tax Statement (Form AS 26) and he had received demand notice from the Income Tax Department.

On taking up the matter, the bank confirmed that the TDS amount for the year 2009-2010 and 2010-2011 was remitted to the Income Tax Department and the relative information updated against the complainant’s PAN. The bank, however, failed to confirm the position in regard to the amount of TDS of Rs.1359/- deducted for the year 2008-2009.

During the conciliation proceedings the bank continued to insist that they had uploaded the amount of TDS collected for the years 2009-2010 and 2010-2011. However they failed to confirm any action in respect of the amount of TDS for the year 2008-2009 or deny the validity of the complainant’s contention. In light of the above, it was felt appropriate to draw an adverse inference of bank’s failure to furnish any clarification and uphold the contention of the complainant that there was a shortfall in the amount of the maturity value of the Term Deposit paid to him to the extent of Rs.1359/- and interest thereon.

The bank was directed to refund an amount of Rs.1359/- to the complainant being the amount purportedly deducted towards TDS and for which the complainant was not given Income Tax credit and pay the complainant interest at applicable Term Deposit rates on the amount and also pay a monetary compensation of Rs.500/- towards costs.

40. Complainant had alleged that the bank had debited LIC premium from his SB account for more than one year and remitted the amount to LIC without his ECS Mandate. After examining bank’s submission it was advised to submit a copy of relevant ECS mandate received from the customer authorizing to debit and remit the amount to LIC. Bank stated that it did not have the required ECS mandate on its record nor could it get a copy of the same from LIC. Bank further stated that the amount was deducted from complainant’s SB account on the basis of LIC form and in the best interest of the customer.

Bank’s submission clearly showed that it had violated ECS (Debit) Procedural Guidelines issued by RBI. Bank was therefore advised to credit the amount debited to complainant’s SB account for a period of one year towards LIC premium along with interest at the rate payable to the account and pay compensation of Rs 5000/- for deficiency in service.

41. The complainant had deposited Rs.11,43,000/- in a saving scheme of a bank. The amount payable on maturity was Rs.18, 35,152/-. But on the date of maturity, the complainant received an amount of Rs.17, 84,634/- only i.e. Rs. 50,518/-, less. The complainant had submitted Form 15G/15H every year, duly mentioning his PAN and hence demanded refund of Rs. 50,518/- along with 18% penal interest. The bank attributed the deduction of Rs. 42,312/- to TDS and stated that while the complainant had submitted Form 15G/15H, the PAN number was not available. This reply was not found tenable as the tax was deducted for previous years based on PAN details available with bank. In conciliation meeting, bank offered to refund Rs. 50,518/- together with interest at the rate applicable on FD from the date of deduction of amount till the date of payment but with a rider that he signed the IT Refund Application form. The complainant refused to sign the form. The BO passed an award directing the bank to make good the short payment of Rs.50, 518/- along with interest at the rate applicable on FD, from the date of deduction till actual date of payment. The bank was also directed to pay compensation of Rs.3,000/- to the complainant towards incidental expenses like travel and stationery.

42. The complaint was regarding refusal by bank to release contents of the locker despite following up the matter for the last 7 years. The bank submitted that the complainant had taken a locker on lease from bank in 1989 and did not pay the rent from 1999 to 2004; hence, the locker was broke open by the bank in February 2004. On receipt of the complaint, the bank searched for the articles of the locker but could not trace them and lodged FIR. The bank also requested the complainant to submit his financial claim. The complainant submitted a claim for Rs. 4,38,874/-. A conciliation meeting was held where the complainant agreed to pay lease rent of Rs. 6,500/- on the date of getting compensation from the bank, which agreed to the complainant’s proposal provided complainant submitted a duly signed indemnity bond.

43. The complainant alleged that his father, an ex-employee of the bank, had availed housing loan from the bank by depositing title deed of his property, which, the bank was not returning even after repayment. The complainant submitted a copy of the bank’s receipt for the said deed. On taking up the matter, bank submitted that it had not received the deed as there was no record to that effect with the bank. The case was examined and deficiency was found with the bank as to how it issued a receipt for having received the said deed if it was not received as contended by the bank now. Accordingly an award was issued in favour of the complainant for Rs 50,000/- for loss of title deed by the bank.

44. A complainant alleged that Rs. 29,695/- were withdrawn from his account through ATM without his knowledge. Despite taking up with bank, the amount was not refunded. On matter being taken up with the bank, the bank showed footage of the ATM transactions to the complainant. The complainant admitted in writing to the bank that the person seen in the video footage was himself and withdrew his complaint.

The case highlights tendency to raise false / factually incorrect complaints without verifying facts and also to highlight that a possibility of false and frivolous complaints relating especially to ATM transactions. Good video coverage will be an authentic clincher in case of disputes besides, of course, corroborative evidence of electronic records.

Annex 4
Ready Reckoner for the BOS 2006

DISCLAIMER

The Reserve Bank of India does not vouch the correctness, propriety or legality of orders and awards passed by Banking Ombudsmen. 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 Ombudsmen and the Reserve Bank of India shall not be responsible or liable to any person for any error in its preparation.

ANNEX V - STATEMENT OF COMPLAINTS RECEIVED BY THE OFFICES OF THE BANKING OMBUDSMAN (2012-13)