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Banking Awareness: Banking Ombudsman Scheme and Ombudsman Scheme for Digital Transactions

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Banking Ombudsman Scheme and Ombudsman Scheme for Digital Transactions: Do you know about the Banking Ombudsman Scheme of the RBI and the recently introduced Ombudsman Scheme for Digital Transactions. If you know then just go through the post for a quick revision. If you don’t then read this article thoroughly. We have covered all the important aspects of the two schemes. It would be beneficial for Banking Exams like IBPS, SBI, RBI, RRB and also for Insurance exams.

Banking Ombudsman Scheme, 2006

Banking Ombudsman Scheme Introduction: The Banking Ombudsman Scheme of the Reserve Bank of India provides the Customers of Commercial Bank a forum to lodge complain relating to certain services provided by bank.

Section of Banking Ombudsman Scheme  : The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

Current Banking Ombudsman Scheme in Force: The Banking Ombudsman Scheme 2006

Banks covered:  under the Banking Ombudsman Scheme, 2006: All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.

Banking Ombudsman Scheme 2006

Types of complaints dealt by Banking Ombudsman:

Click Here to know the types of complaint
  • non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
  • non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for charging of commission in respect thereof;
  • non-acceptance, without sufficient cause, of coins tendered and for charging of commission in respect thereof;
  • non-payment or delay in payment of inward remittances ;
  • failure to issue or delay in issue of drafts, pay orders or bankers’ cheques;
  • non-adherence to prescribed working hours ;
  • failure to provide or delay in providing a banking facility (other than loans and advances) promised in writing by a bank or its direct selling agents;
  • delays, non-credit of proceeds to parties’ accounts, non-payment of deposit or non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits in any savings, current or other account maintained with a bank ;
  • complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank related matters;
  • refusal to open deposit accounts without any valid reason for refusal;
  • levying of charges without adequate prior notice to the customer;
  • Non-adherence to the instructions of Reserve Bank on ATM / Debit Card and Prepaid Card operations in India by the bank or its subsidiaries
  • Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on credit card operations
  • Non-adherence to the instructions of Reserve Bank with regard to Mobile Banking / Electronic Banking service in India by the bank
  • Non-disbursement or delay in disbursement of pension (to the extent the grievance can be attributed to the action on the part of the bank concerned, but not with regard to its employees);
  • Refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government;
  • Refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government securities;
  • Forced closure of deposit accounts without due notice or without sufficient reason;
  • Refusal to close or delay in closing the accounts;
  • Non-adherence to the fair practices code as adopted by the bank;
  • Non-adherence to the provisions of the Code of Bank’s Commitments to Customers issued by Banking Codes and Standards Board of India and as adopted by the bank ;
  • Non-observance of Reserve Bank guidelines on engagement of recovery agents by banks;
  • Non-adherence to Reserve Bank guidelines on para-banking activities like sale of insurance / mutual fund /other third party investment products by banks
  • Any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking or other services. 

When can you file a complaint in Banking Ombudsman:

You can file a complaint with the Banking Ombudsman only after

  • You have filed your complaint with the bank concerned and 1 month has elapsed after filing the complaint with the bank and you have either not received a reply from the bank, or
  • the bank rejects the complaint, or
  • if the complainant is not satisfied with the reply given by the bank.

Please note you cannot directly lodge a complaint with Banking Ombudsman without first filing a complaint with your bank.

  • So the minimum time is 1 month after filing the complaint with your ban and the maximum time is 1 year counted from the date of receiving the reply from your bank and in case the bank has not replied then 1 year and 1 month from the date of filing the complaint.

Fees for filing complaint with Banking Ombudsman: No fees is charged.

Compensation under the Banking Ombudsman Scheme: Maximum Rs 20 lakh or the amount of loss suffered by the complainant arising directly out of the act or omission of the bank, whichever is lower.

Compensation for Mental Agony: Maximum Rs 1 lakh (The Banking Ombudsman may award compensation not exceeding ₹ 1 lakh to the complainant for mental agony and harassment faced by him from his bank.

Number of Banking Ombudsman/Offices: Presently there are 22 Banking Ombudsman Offices in India

Appellate Authority: Deputy Governor

Extra: If you have faced some issues with your bank and want to lodge a complaint with either your bank or with the banking ombudsman you can do so via this link. Click Here

Summary (Quick Revision):

  • The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949.
  • Introduced with The Banking Ombudsman Scheme 2006.
  • All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
  • You can file a complaint with the Banking Ombudsman only after you have filed your complaint with the bank concerned and 1 month has elapsed.
  • Compensation under the Banking Ombudsman Scheme: Maximum Rs 20 lakh
  • Compensation for Mental Agony: Maximum Rs 1 lakh
  • Number of Banking Ombudsman/Offices: 21
  • Appellate Authority: Deputy Governor

Ombudsman Scheme for Digital Transactions

Please Note: Both the schemes are very similar. If you learn one the another will be prepared automatically.

Introduction: The Ombudsman Scheme for Digital Transactions, 2019 has been introduced by the Reserve Bank of India w.e.f January 31, 2019 to deals with complaints regarding digital transactions undertaken by customers.

Section and Act: The Scheme is being introduced under Section 18 Payment and Settlement Systems Act, 2007, with effect from January 31, 2019.

Name of Scheme: Ombudsman Scheme for Digital Transactions, 2019

Complaints to be handled by Ombudsman for Digital Transactions

Any person may file a complaint free of cost with the Ombudsman for Digital Transactions having any one of the following grounds alleging deficiency in service:

  • Prepaid Payment Instruments
  • Mobile / Electronic Fund Transfers
  • Relating to Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code
  • Non-reversal / failure to reverse within reasonable time, funds wrongly transferred to the beneficiary account due to lapse at the end of System Participant (relating to digital payment)
  • Any other matter relating to the violation of the directives including on fees / charges,4 if any, issued by the Reserve Bank in relation to digital transactions.

When can you file a complaint with Ombudsman for Digital Transactions:

You can file a complaint with the Ombudsman for Digital Transactions only after:

  • You have filed your complaint with the bank concerned and 1 month has elapsed after filing the complaint with the bank and you have either not received a reply from the bank, or
  • the bank rejects the complaint, or
  • if the complainant is not satisfied with the reply given by the bank.
  • Please note you cannot directly lodge a complaint with Ombudsman for Digital Transactions without first filing a complaint with your bank.
  • So the minimum time is 1 month after filing the complaint with your bank and the maximum time is 1 year counted from the date of receiving the reply from your bank and in case the bank has not replied then 1 year and 1 month from the date of filing the complaint.
  • The complaint should not fall under the disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007

Ombudsman Scheme for Digital Transactions 2019 byscoop

Fees: Nil

Maximum Compensation: Maximum Rs 20 lakh or the amount arising directly out of the act or omission or commission of the System Participant whichever is less.

Compensation for mental agony: Maximum Rs 1 lakh

Number of Ombudsman for Digital Transactions: 22

Appellate Authority: Deputy Governor

Note: One can file appeal against the Award or the decision of the Ombudsman rejecting the complaint, within 30 days of the date of receipt of communication of Award or rejection of the complaint. (Applicable to both the schemes.)

Summary

  • The Ombudsman Scheme for Digital Transactions, 2019 has been introduced by the Reserve Bank of India w.e.f January 31, 2019.
  • The Scheme is being introduced under Section 18 Payment and Settlement Systems Act, 2007, with effect from January 31, 2019.
  • You can file a complaint with the Ombudsman for Digital Transactions only after you have filed your complaint with the bank concerned and 1 month has elapsed.
  • Compensation under the Ombudsman Scheme for Digital Transactions: Maximum Rs 20 lakh
  • Compensation for mental agony: Maximum Rs 1 lakh
  • Number of Ombudsman for Digital Transations: 21
  • Appellate Authority: Deputy Governor

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