Banking Ombudsman is a forum for bank customers for resolving their complaints related to certain services offered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949, by RBI in 1995. The Banking Ombudsman official is appointed by RBI who is responsible to address customer complaints against deficiency in certain banking services.
The customers can lodge their complaints at the office of the Banking Ombudsman, under whose jurisdiction, the bank branch is situated against which the complaint is being lodged. The complaints relating to credit cards and other types of services with centralized operations, complaints may be filed before the Banking Ombudsman within whose territorial jurisdiction, the billing address of the customer is located.
In case of complaints related to credit card operations the Banking Ombudsman can award compensation not exceeding Rs 1 lakh to the complainant, for mental agony and harassment. But in this the Banking Ombudsman will not take into consideration the loss of the complainant’s time, expenses incurred by the complainant, harassment and mental anguish suffered by the complainant while passing such award.
The first attempt of the Banking Ombudsman is to settle the issue by an agreement between the complainant and the bank named in the complaint. In such case the terms of settlement offered by the bank are acceptable to one in full and final settlement of one’s complaint the Banking Ombudsman passes an order as per the terms of settlement which becomes binding on the bank and the complainant.
In case one is not satisfied with the decision passed by the Banking Ombudsman, one can approach the appellate authority against the Banking Ombudsman’s decision. Deputy Governor of RBI has an Appellate Authority.
The complainant can also move to the consumer court. The bank can also file an appeal before the appellate authority under the scheme.