Banking Ombudsman

Banking Ombudsman is a quasi-judicial authority created in 2006, and the authority was created pursuant to a decision made by the Government of India to enable resolution of complaints of customers of banks relating to certain services rendered by the banks. The Banking Ombudsman Scheme was first introduced in India in 1995 and was revised in 2002. The current scheme became operative from 1 January 2006, and replaced and superseded the banking Ombudsman Scheme 2002. Presently the Banking Ombudsman Scheme 2006 (As amended up to July 1, 2017) is in operation.

From 2002 until 2006, around 36,000 complaints have been dealt by the Banking Ombudsmen. There are 22 regional offices of Banking Ombudsmen in India. The latest offices are opened in Jammu, Raipur, Mumbai-II & New Delhi-III.

The Banking Ombudsman is a relatively new term. To ensure you gain a better understanding of what it means and its roles and responsibilities, in this article, we will explain in detail what a Banking Ombudsman is and how it came into existence. We will also consider the purpose it was created for and the powers that it has been granted.

banking ombudsman

What is a Banking Ombudsman?

The Banking Ombudsman is a position created by the Government of India to address the issues and complaints of the customers. A senior, experienced official appointed by the Central Bank of India, that is, the Reserve Bank of India, to offer redress and offer amends, if possible, to the consumer complaints regarding the shortcomings in the banking sector. 

In simple words, Banking Ombudsman is a designation, a position created by the Government of India that works as an RBI complaint number where the customers who are dissatisfied with the services received can lodge their complaints. 

The formation of a Banking Ombudsman

The RBI Ombudsman was created in the year 2006 by the Government of India. However, the Banking Ombudsman scheme was introduced in India way back in the year 1995. The scheme that is now in power was enacted in 2006, replacing the Banking Ombudsman scheme that came into being in the year 2002. 

The 2006 RBI Ombudsman scheme has been amended till July 2017.

Where are they appointed?

Since a Banking Ombudsman redresses complaints regarding the deficiencies in the banking sector, it makes sense that they are appointed at all places where the RBI has branches. Therefore, Banking Ombudsman is appointed in all places where the Reserve Bank of India happens to have offices.

Who can act as a Banking Ombudsman?

  1. The person should be of high standing in the Legal, Banking, Financial Services, and/or Public Administration to be appointed to this post.
  2. A Banking Ombudsman is appointed for three years. In case an extension of tenure is granted, the extension cannot exceed more than two years. This extension is subject to the upper age limit of 65.

The RBI has thus appointed Banking Ombudsman at the following places:

  1. New Delhi, the national capital of India
  2. Mumbai, the financial capital of India
  3. Patna, the capital of the state of Bihar 
  4. Guwahati
  5. Chandigarh
  6. Jaipur
  7. Ahmedabad 
  8. Bengaluru 
  9. Bhopal 
  10. Bhubaneswar 
  11. Chennai 
  12. Hyderabad 
  13. Kanpur
  14. Thiruvananthapuram 

People of these cities can easily avail the services of a Banking Ombudsman who is appointed as an RBI complaint number.

The roles and responsibilities of the Banking Ombudsman

  • A Banking Ombudsman is responsible for matters relating to non-payment or delay in collection of cheques, bills, drafts, etc.
  • He/she is also responsible for matters concerning the non-acceptance of small denomination notes or coins without sufficient cause or justified reason. He is also responsible for registering complaints and ensuring action if someone is charging fees for such services.
  • Failure to issue or delay in issues of banker’s cheques, non-adherence to working hours; failure of banks in providing a banking facility promised by giving in writing; failing to honour guarantee or letter of credit commitments all fall under the ambit of the responsibilities of a Banking Ombudsman.
  • Matters relating to non-acceptance of payments towards taxes as prescribed by the RBI or the Government of India or forced closure of deposit accounts without prior notice and without sufficient justified reasons fall under the responsibilities of a Banking Ombudsman.
  • A Banking Ombudsman receives complaints regarding non-adherence to any of the banking guidelines laid down by the RBI. It also looks after matters concerning maintenance of banking records and transactions, as well as maintenance of their accounts by OCI cardholders and NRIs.

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