Are you aggrieved with your bank?

RBI’s Integrated Ombudsman Scheme is a single point of reference to file complaints
Are you aggrieved with your bank?
Even as the Reserve Bank of "India (RBI) has been taking various initiatives to ensure resolution of customer complaints in a speedy and meaningful manner to promote public confidence in the financial system, the customer dissatisfaction continues to witness upward movement."[Image for representational purpose only]Pixabay [Creative Commons]

Growing customer complaints is a big challenge to the banks as it bears the power to pull a bank out of business. Even as the Reserve Bank of India (RBI) has been taking various initiatives to ensure resolution of customer complaints in a speedy and meaningful manner to promote public confidence in the financial system, the customer dissatisfaction continues to witness upward movement. It’s interesting to note that the RBI has been analyzing the customer complaints on the basis of the data which it receives through the Ombudsman channel and also through CMS portal. But the number of complaints which the RBI receives against the banks is just a fraction of the actual number of complaints as not all aggrieved customers take route to the RBI for redressal of their grievances.

Precisely, we have different categories of complainants. There’s a huge section of customers who are not satisfied with the services offered to them by their banks. Even as they raise their issues with the bank, they mostly avoid confrontation and silently shift to other banks with the hope of getting better services. Then there’s a category which gets engaged in a dispute with the bank and tries to get it resolved to their satisfaction without looking at the RBIs grievance redressal platforms. And then we have a marginal percentage of complainants who make it a point to reach to the RBI for settling scores with their bank. This negligible percentage of complainants is not the true picture of dissatisfied customers.

We have to understand that the integration of technology into the banking operations has completely changed the nature of complaints in the past one decade or so. Digital payment channels like mobile banking, e-banking, credit & debit cards, point of sale machines, electronic funds transfer through National Electronic Fund Transfer (NEFT) & Real Time Gross Settlement (RTGS) etc. are fast becoming the preferred mode of payment transactions. Resolution of customer complaints in this digital ecosystem where the volume of electronic transactions is witnessing unprecedented rise, is proving a challenging task for the banks.

Even as there is considerable reduction in human error in electronic transactions, the technology has at the same time exposed the whole financial system to borderless digital frauds. Precisely, if technology has revolutionized financial transactions, it has at the same time given rise to a new breed of fraudsters who misuse the same technology to steal identity as well as funds of people.

Unauthorized electronic funds transfer, customer’s inability to transfer the funds to bank account, not loading funds into the wallet within a reasonable period of time, failure to effect online payment or fund transfer, failure to refund your money in case of a failed transaction, and not implementing stop-payment instructions within the specified time-frame are some of the new-age complaints that have created a wedge between the customers and the banks. Lack of proper and even delayed resolution has shaken the confidence of common customers on the technology driven financial system in banks.

Traditionally, banks have a grievance redressal mechanism in place, but most of the customers don’t trust the system. Here the banks have failed to modernize the redressal system in line with the technology available. Basically, inadequate complaint management is a widespread practice in our banks. It is either caused by lack of interest, procedures or staff training. This bad complaint handling is a phenomenon that has seriously affected satisfaction and the bond with customers.

Now the good news for the bank customers is that they won’t be required to chase different complaint redressal entities as the Reserve Bank of India has placed a single point of reference to file complaints against the banks. Remarkably, on November 12, 2021, Prime Minister Narendra Modi launched the RBI’s Integrated Ombudsman Scheme via a virtual meeting. The Scheme aims to further improve the grievance redress mechanism for resolving customer complaints against entities such as banks, NBFCs and payment service operators regulated by the RBI. A complainant has to submit documents, track the status of his complaints and receive feedback through this single point. From a consumer’s standpoint, the Integrated Ombudsman Scheme is certainly a steppingstone to achieving financial consumer protection.

Who is an Ombudsman?

An ombudsman is a representative of the people who take up their complaints, conduct an investigation and resolve disputes either through recommendations or through mediations. In India, the Lokpal and Lokayukta Act, 2013 established a framework for the ombudsman. While the ‘Lokpal’ is responsible for dealing with complaints of ministers or secretaries in the Central and State Governments and the ‘ Lokayukta’, deals with the complaints of other administration officials.

What is the role of the Banking Ombudsman?

A Banking Ombudsman is handling complaints and grievances related to the services provided by the banks. The Banking Ombudsman can take up a complaint on the grounds permitted by the RBI, initiate an independent enquiry and resolve disputes between the customers and the service providers through mediation or conciliation. Consumers can seek the grievance redressal mechanism of BOs only after the rejection or unsatisfactory redressal of a complaint by the bank. If the disputed parties are not in agreement the Banking Ombudsman may pass an award or dismiss a complaint after allowing both parties to state their cases. The Banking Ombudsman can also reject a complaint at any stage subject to the grounds allowed by the RBI.

As a mediator, the Ombudsman acts as an independent third party with the objective of helping the disputing parties to reach an agreement. If the parties are unable to find a common ground then the mediation process is terminated and the ombudsman conducts a fair investigation between adjudicating on the matter.

How is the Integrated Ombudsman Scheme different from existing schemes?

The existing three ombudsman schemes of the RBI - banking ombudsman scheme of 2006, ombudsman scheme for NBFCs of 2018 and ombudsman scheme of digital transactions of 2019 - have been integrated into a single entity, Integrated Ombudsman Scheme, which will offer the benefit of a single platform to customers for getting speedy resolution of their grievances. The new scheme will provide redress of customer complaints involving deficiency in services rendered by RBI regulated entities viz. banks, NBFCs and pre-paid instrument players if the grievance is not resolved to the satisfaction of the customers or not replied within a period of 30 days.

Notably, the new scheme also includes non-scheduled primary co-operative banks with a deposit size of Rs 50 crore and above. Precisely, it’s a concept of “One Nation One Ombudsman”. How will the newly launched Integrated Ombudsman Scheme work?

It will have one portal, one email and one address for the customers to lodge their complaints. The Scheme has done away with the jurisdiction of each ombudsman office.

The responsibility of representing the Regulated Entity and furnishing information in respect of complaints filed by customers against the Regulated Entity would be that of the Principal Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent. The Regulated Entity will not have the right to appeal in cases where an Award is issued by the ombudsman against it for not furnishing satisfactory and timely information/documents.. A multi-lingual toll-free number will provide all relevant information on grievance redress and assistance for filing complaints.

How to file a complaint with the ombudsman?

You can visit https://cms.rbi.org.in to file the complaint. You have the option to send your complaint through the dedicated e-mail to email ID CRPC@rbi.org.in. For filing the complaints physically, you can send address it to ‘Centralised Receipt and Processing Centre’ set up at Reserve Bank of India, 4th Floor, Sector 17, Chandigarh - 160017 in the format available at the link https://rbidocs.rbi.org.in/rdocs/content/pdfs/RBIOS2021_121121.pdf.

A Contact Centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalised to provide information/clarifications regarding the alternate grievance redress mechanism of RBI and to guide complainants in filing of a complaint.

(Inputs from the Reserve Bank of India website)

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