Consumer should first approach bank for redressal of complaint before Ombudsman

How many of us are aware about the process for filing complaint with the Ombudsman? It seems the percentage will be around 2-3 % only. Earlier people did not know about the Banking Ombudsman and as they know about it many of them don’t know about the conditions for governing the filing of complaint before the Ombudsman due to which large number of complaints get rejected at this stage simply.

Reason being every complaint that goes before the Banking Ombudsman has to go through the following checks to determine whether case can be taken up or not.

First it is checked whether the complaint comes under the jurisdiction of the Ombudsman.

Second is whether it is a ‘first resort complaint’ – means did the consumer first tried to approach the bank for redress of his complaint.

Third whether the complaint has been filed within the prescribed time limit- that is within one year from the receipt of a reply from the bank.

Then the other issues are (a) whether the complaint has been handled by the Ombudsman before, (b) whether it is pending before any other tribunal or forum or law court and (c) whether there has been any decision on the dispute by any other court or tribunal or forum.

The most basic thing is that the consumer should try the in-house complaint redressal forum provided by the bank. When he or she does not get any satisfactory response they should redress mechanism provided by the Ombudsman.

As consumer are not aware about this as a result many consumers complaint gets rejected from the Ombudsman.

Although they can re-send the complaint after completing the formalities and in some cases, the Ombudsmen say when it rejects the complaint, it also send a copy of the complaint as well as the rejection letter to the bank concerned and some banks do respond at this stage and sort out the problem.

However there is no statistical data available that how many such cases are resolved in this manner.

As per records in 2007-2008, as many as 7,950 complaints were sent back because they were ‘first resort complaints. The number constitutes 40 per cent of the total number of 19,735 complaints rejected.

In the next year the number was more than double- 18,187 complaints were ‘first resort ‘complaints. The total number of rejected complaints increased which shows that there is lack of consumer awareness about the scheme.

In 2008-2009 the total number of such rejected complaints stood at 43,115.

So the first step is to approach bank for redressal of complaint. When you send your complaint, give your complete address and contact details. Consumers also need to remember that they cannot file the complaint before the consumer forum as well as the Ombudsman. If you don’t find the decision given by Ombudsman satisfactory then you can file a case before the consumer court but you cannot file the complaint simultaneously before both the forums.

In one of instance the customer said that he filed his complaint related to home loan issue with Ombudsman but it was rejected by it as he had not approached the bank first. After that he has sent several e-mails to the bank, but the bank was not responding. Even his e-mails were bounced back.

In such case he should send a hard copy of the complaint to the bank’s Nodal officer.

The RBI has made it mandatory that every bank must nominate a nodal officer for redress of consumer complaints.

You can get the contact details of the Nodal officer from the bank. Send your complaint by registered post, acknowledgement due.

In case bank does not reply within a month, re-send your complaint to the Ombudsman, but while doing so, make sure that give proof of having complained to the bank first. And always remember to give your complete address and contact details, also of the bank.

Urban co-operative banks with strong corporate governance get approval to open ATMs

The urban co-operative banks with strong corporate
governance can now set up offsite ATMs as the Reserve Bank
of India (RBI) has relaxed rules for this. Before, UCB had
to take approval from RBI to set up an off-site ATM.

After relaxation in rules the banks having lower bad loans,
three consecutive years of profit and professionals on
their board can set up off-site ATM with out the prior
approval from RBI.

RBI said along with profit requirement, banks will have to
hold their net non-performing assets below 5% and must have
at least two professionals on their board to be eligible to
set up ATMs without approval.

In case a bank has ever defaulted on meeting its cash
reserve ratio or statutory liquidity ratio requirement, or
bank’s capital adequacy ratio fell below 10% in the
preceding year then also bank cannot set up off-set ATM.

According to RBI’s older guidelines, to be eligible to set
up an ATM bank must have operating profit for three
proceeding years, the net NPA should be less than 10% and
they have to maintain the minimum prescribed capital
adequacy ratio- which is 9%.

Also, earlier it was not necessary for banks to have
professional members on the board and nothing was mentioned
about defaults on maintaining CRR and SLR.


While in its new guidelines, regarding the approval RBI has
also stated that regulatory will have full say on issues
like track record of compliance with the provisions of
Banking Regulation Act, 1949, RBI Act, 1934, and the
instructions or directions issued by RBI from time to time.



A senior official from a UCB said, “The only liberalization
is that if an UCB is eligible as per new norms, it does not
have to seek prior approval from RBI to set up offsite
ATMs.”

Earlier in 2001 after Madhavpura Co-operative Bank had
suffered huge losses on account of securities scam, RBI did

not issue any issuing fresh branch license to urban

co-operative banks.



Also, these banks were not allowed to freely set up offsite
ATMs, instead it was made mandatory that all commercial
banks have to come up with an annual plan on branch and ATM
expansion.



In its April policy, RBI had stated that well-managed UCBs
will have to submit annual business plans having details
where they plan to open new branches on off-site ATMs.


In the April policy, RBI had said well-managed UCBs are
required to submit annual business plans detailing where
they plan to open new branches on off-site ATMs. The
central bank said in its policy, “In order to further
improve the banking infrastructure, it has been decided to
liberalize the approach to set up offsite ATMs by UCBs.



Accordingly, it is proposed to allow well-managed UCBs to
set up offsite ATMs without seeking approval through the
annual business plans”.

Andhra Bank to open 10 branches in Mumbai, already received license for 5 branches

Andhra Bank is doing good business in Mumbai zone. Looking at the growth bank has decided to open 10 new branches in Mumbai during the current fiscal, a senior bank official told.

"Presently, we have 86 branches in the Mumbai zone. We now plan to open 10 new branches here and we have already received licences for five branches," Andhra Bank's general manager (Mumbai Zone), M Anjaneya Prasad, told PTI here.

The five new branches for which bank has obtained license will be opened in Gandhidham, Bhavnagar, Jamnagar, Jalgaon and Sangli.

During FY 10 the bank had opened 125 branches across the country including 22 in the Mumbai zone.

Prasad said, in the current fiscal (FY 11), Andhra Bank has set a target of achieving an overall business growth of 25% from the Mumbai Zone.

In FY 10 Andhra Bank achieved a growth of 60.15% overall in its net profit at Rs1,046 crore as against to Rs653 crore in FY 09.

In the last fiscal (FY 10), bank business reported a 29.26% at Rs1,34,194 crore growth as compared to Rs1,03,818 crore in FY 09

However in FY 10 bank net NPAs stood at 0.17% while gross NPA was capped at 0.86%.

Pay charges for corrections or alterations in anything on cheque leaving date

Now if you by mistake write wrong spelling such as ‘hundered’ instead of ‘hundred’ on a cheque and just strike off the additional ‘e’ and issue the cheque then you will have to pay return charges that are Rs100-250 for public sector banks and Rs350-550 for private banks. So issue fresh leaf.

Recently the Reserve Bank of India (RBI) has issued a circular to the banks that they should not accept cheques that have corrections or alterations in anything but the date. RBI is taking this measure in order to “help banks identify and control fraudulent alterations”. However banks have started informing customers about the policy change through mails.

S Govindan, general manager (personal banking and operations), Union Bank of India said, “It is consumer protection that the RBI is looking at. Many a times cheques are stolen and encashed by other parties by making corrections.”

He said such measure is important in changing scenario where the cheques are being dealt differently. “Earlier, banks used to tell people not to issue a bearer cheque and about some basic precautions. But now cheques get couriered. Also, they are deposited in drop boxes. So the possibility of them falling into the wrong hands is high.”

The RBI is trying to reduce and, if possible, eliminate transactions through cheques. A banker pointed out, “Now that daily interest rate calculation has come in, it works in your favour to keep money in your account for as long as possible. At least three days are wasted in the issuance of a cheque. Whereas net banking is instant”.

YES Bank got green signal from RBI to offer mobile money service in India

In India soon you will be able to pay for your purchases using your mobile phone. This facility is available in western countries. In Pune the project was launched on a trial basis and is doing “extremely well”, thus Nokia is expecting money transfer using mobile phone is going to grow gradually. During the ‘strategy sharing session' Nokia described its vision for mobile money services launched in India, as a business with enormous revenue potential.

Yes Bank has got green signal from the Reserve Bank of India to offer mobile money services in association with Nokia. (Obopay, a California-based company, in which Nokia has a stake, offers the technology back-up for YES Bank.) The trial project in Pune will be ending in couple of months and its result will most probably provide inputs for RBI which will help it in regulating the launch of the services in India.

However Nokia is ready for roll out of services. The process would be, you go to any of the two lakh Nokia's retail outlets across the country and fill a form which acknowledges that you are an account holder with YES Bank. Nokia promises that the process will not take more than 15 minutes.

Then you can deposit the amount at the Nokia outlet and within minutes the ‘credit' will appear on your mobile phone. You are ready to make payments at shops, pay electricity and water bills and even transfer funds to another person.

At present only YES Bank has got the approval later on other banks can follow the suit. Nokia is having talks with few other banks, but it will depend on the banks that they apply for approval with the RBI, Nokia refused to disclose the names of the banks or give a timeline for the launch of the service. Obopay charges two per cent of the value of payments as commission, except for utility bills, where the payment would be between Rs 5 and Rs 10 a transaction.

You can lose money in phishing without any mistake on your part

Usually you lose money due to carelessness while doing transactions at ATM or online. But there is a case where an elderly gentleman found his money disappearing from his account without making any mistake or carelessness.

Dwarak Ethiraj is staying in Chennai and has an ICICI Bank account in Pune. Late February, this year he got a rude shock when he received an SMS from his mobile service operator, Reliance India Mobile stating that his “handset change request has been processed”. (Such request is placed with the service provider when a telecom customer loses his handset. In this the number remains the same and calls will be directed to the SIM on the new phone).

After this message, the SIM in Ethiraj's phone became invalid and he could make no more calls, except to the telecom company's customer care number. However his number remained valid but it was being used by whoever had committed this fraudulent change.

Then, on the next day he received a call from ICICI Bank on his landline number informing him that Rs 1.55 lakh had been taken out from his account and paid to four new beneficiaries across 10 transactions. The transactions were done around 11 p.m. the very day his mobile number was hijacked.

Ethiraj is confused. He says, “One, I don't know how a telecom service provider can authorise a handset change when the number is in my name, and I have not made such a request. Two, how did the perpetrator of the fraud get access to details on my ATM/Debit card and make those amount transfers?”

The victim’s puzzlement stems from this: in case you want to transfer amount from your ICICI account, you have to punch in a login and password before you access your account, also you are asked to input numbers that you find at the back of your card. This is done at random and hence it is difficult to predict what exactly the security system would ask you. For instance, it will ask you to enter the numbers placed under box A, I and N at the back of your ATM Card. In the next transaction, it might ask you for numbers in boxes C, F and G.

Then, there is another layer of security having confidential code which is sent to the mobile number registered with the bank, when you wish to add a beneficiary to whom payments could be made. In this case also, codes generated by the system at the bank will have reached the mobile number, but clearly, in the hands of the perpetrator of the fraud.

Ethiraj says he took up this matter with the Reliance Communication's call centre and then he visited the local outlet as well as to the nodal office of the telecom service provider. But nothing has been done. He is yet to hear from them. Ethiraj says that ICICI Bank is also yet to clarify as to how such confidential information, specific to his ATM card, had been compromised.

He told that in the Internet banking profile at the bank's Web site, his current e-mail ID has been replaced with a defunct ID used previously.

The victim's other question to the bank is this, “All the four beneficiaries are customers of ICICI Bank. It would be easy to locate those four with the help of Know Your Customer documentation that the bank would have.” He informed that till now bank has not shared such information with him.

On the other hand service provider’s say

Reliance Communications has not given any response to eWorld's e-mail queries. Ethiraj says, “When I make a handset change (or SIM change) request, I have to support it with documentation with regard to identity proof, address proof and the like. When I, myself, have not made such a request, how could someone else walk away with my number on another phone?”

A spokesperson for ICICI Bank replied to eWorld's e-mail saying, “... It is practically not possible to fraudulently withdraw money from (an) online account unless the personal details are compromised by customers inadvertently or otherwise. ICICI Bank sends a code (URN) by SMS on the customer's mobile phone every time a new payee has to be added. The customer needs to confirm the payee by entering this URN. In this case ICICI Bank sent the URN to the registered number of the customer as per the standard process.”

According to bank, “the mobile operator allegedly issued SIM to an imposter without duly verifying know-your-customer (KYC) documents. It is impossible for a bank to know that such a duplicate SIM has been issued by an operator because the registered mobile number in our record has not changed". Most of the banks claim that their employees can also not access the numbers given at the back of the ATM. When asked, ICICI bank repeated what it said above.

Then what has exactly happened with Ethiraj? Was Ethiraj a victim of a ‘phishing' attack? Ethiraj says he did get an e-mail, prior to his loss, which was obviously trying to ‘phish' for information. He said, “I certainly did not give out any confidential information.” He says, he had forwarded that message to ICICI Bank.

(Wikipedia describes ‘phishing' as a criminally fraudulent process of attempting to acquire sensitive information such as user names, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication.)

However, in a case of cyber crime through phishing, the Adjudicating Officer in Tamil Nadu, the state's IT Secretary, PWC Davidar, last fortnight passed an order against the bank. In the case the defendant was ICICI Bank which has been ordered to pay nearly Rs 13 lakh against the original loss of Rs 6.5 lakh to a customer, including interest costs and other expenses.

Although, in that case, the customer had accidentally, given out his details during a ‘phishing' attack. The officer told that the list of instructions on phishing put by the banks on their website and sent to the customers, were of a “routine nature” and did not help a customer distinguish between an e-mail from the bank and an e-mail sent by somebody suspect.

He also said that the banks are taking shelter behind routine instructions on phishing and had avoided taking steps that would benefit the customer. Davidar, in his verdict, said that the bank's actions indicated it had “washed its hands off the customer,”

Ethiraj says that though bank is investigating to find out what had happened, “The bank should pay me back the money I have lost.” The present status of Ethiraj's case is that his complaint against the telecom and banking institutions is with the Cyber Crime Branch of the TN police in Chennai. The Branch has asked the two companies to provide the details.

Indian Bank launched Visa Business cards and ATM cards for RRBs

Indian Bank is offering Visa business cards to its corporate and SME clientele segments. Bank is offering the cards with an interest-free period of maximum 45 days and revolving credit on payment of minimum amount of 10 per cent of the outstanding.

Bank has also launched ATM cards for its sponsored regional rural banks (RRBs). The cards were launched by CK Ranganathan, director, Indian Bank, and chairman and managing director of Cavin Kare Ltd, in the presence of MS Sundara Rajan, chairman and managing director, Indian Bank.

The three RRBs of the bank are Saptagiri Grameena Bank (Chittoor, Andhra Pradesh); Pallavan Grama Bank (Salem, Tamil Nadu) and Puduvai Bharathiar Grama Bank (Puducherry) with a total number of 234 branches and over 1.3 million depositors.

Rajan informed all the three RRBs has achieved 100 per cent CBS, therefore Indian bank has launched the co-branded ATM cards. He said, “This will enable rural customers to avail of 24x7 services. Our RRB customers can transact in all the ATMs of Indian Bank.”