Q.1 What do you mean by Banking Ombudsman? Explain its jurisdiction, powers and duties. 
An ombudsman (conventional English plural: ombudsmen) is a person who acts as a trusted intermediary between either the state (or elements of it) or an organization, and some internal or external constituency, while representing not only but mostly the broad scope of constituent interests.
An institution that receives and deals with disputes related to banking and financial services. Examples of complaints an ombudsman might handle include non-payment of a check and refusal to honor a duly issued letter of credit. Banking ombudsman services exist in countries like the United Kingdom and India, though other nations have similar organizations.
The Banking Ombudsman is a senior official, appointed by the Reserve Bank of India to address grievances and complaints from customers, regarding deficiencies in banking services. It covers all kinds of banks – PSU Banks, Private banks, Rural banks and co-operative banks. Even though, it was originally setup in 1995, there were major revisions in 2006 covering transactions related to complaints of ATM cards, debit cards and credit cards, deduction of service charges by banks without prior intimation, unfair practices of banks and non-compliance by direct sales agents (DSA) of banks for services promised while opening an account etc. It was last amended in Feb, 2009 to cover deficiencies arising out of internet banking too.
Today, the Banking Ombudsman covers almost all kind of complaints for banking services. To give you a brief idea about their effectiveness, Banking Ombudsmen received 79,266 complaints in the year 2009-2010 out of which around 94% were handled and just 5-6% of the complaints remained pending for more than three months as on June 30, 2010. There are a total of 15 Banking Ombudsman in our country. You complain to the one which comes under the jurisdiction of the Bank location, i.e., if your bank is in Bangalore, you can complain to the BO from Bangalore region. Incase you or the bank is not satisfied by the decision given by the Banking ombudsman, in that case within 30 days of BO decision, the complaint can be taken forward to Appellate Authority, which is a Deputy Governor of the RBI . Its just like going to supreme court if you are not satisfied by High court decision.
JURISDICTION POWERS AND DUTIES OF BANKING OMBUDSMAN GENERALThe Banking Ombudsman's powers and duties will be:-
- to receive complaints relating to the provision of banking services.
- to consider such complaints and facilitate their satisfaction, or settlement by agreement, by making a recommendation, or Award in accordance with this scheme.
SPECIFIC AMBIT OF AUTHORITYAs regards banking services, the Banking Ombudsman's authority will include:-
a) all complaints concerning deficiency in service such as:-
- non-payment/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-issue of drafts to customers and others;
- non-adherence to prescribed working hours by branches;
- failure to honour guarantee/letter of credit commitments by banks;
- claims in respect of unauthorised or fraudulent withdrawals from deposit accounts, etc.;
- complaints pertaining to the operations in any savings, current or any other account maintained with a bank, such as delays, non-credit of proceeds to parties' accounts, non-payment of depositor non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits.
- complaints from exporters in India such as delays in receipt of export proceeds, handling of export bills, collection of bills, etc. provided the said complaints pertain to the bank's operations in India; and
- Complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank-related matters.
b) Complaints concerning loans and advances only insofar as they relate to:-
- non-observance of Reserve Bank directives on interest rates,
- delays in sanction/non-observance of prescribed time schedule for disposal of loan applications and
- non-observance of any other directions or instructions of the Reserve Bank, as may be specified for this purpose, from time to time.
(c) Such other matters as may be specified by the Reserve Bank from time to time in this behalf.
OTHER POWERS AND DUTIES a) General superintendence and control
The Banking Ombudsman shall exercise general superintendence and control over his office and shall be responsible for the conduct of business thereat.
b) Power to incur expenditure
The Banking Ombudsman shall have power to incur expenditure on behalf of the office. In order to exercise the aforesaid power, the Banking Ombudsman will draw up an annual budget for his office in consultation with Reserve Bank. The Reserve Bank will indicate the shares to be borne by the concerned banks. The Banking Ombudsman shall exercise the powers of expenditure within the approved budget.
c) Annual Report On Functioning And Working Of The Banking Obdudsman's Office
- The Banking Ombudsman shall send to the Governor, Reserve Bank, in May every year, a report containing a general review of the activities of the office of the Ombudsman during the preceding financial year, and shall furnish such other information as the Reserve Bank may direct.
- The Reserve Bank may, if it considers necessary in the public interest so to do, publish in such consolidated form or otherwise as it deems fit, the report and the information received from the Banking Ombudsman.
