Dear Readers,

The annual report of the Banking Ombudsman Scheme for 2014-15 was released on November 26, 2015 and the findings of the report are important for your upcoming exams. In this article, we will discuss the background of the scheme and the highlights of the recent report.

Banking Ombudsman Scheme,
1995

1. The word ombudsman has Swedish origin and refers to “an
official appointed to investigate individuals’ complaints against a company or
organization, especially a public authority.” Thus, in banking parlance s/he acts
as a mediator to settle problems between customers and banks.

2. The Reserve Bank of India (RBI) notified this scheme under
section 35A of the Banking Regulation Act, 1949. The aim was to create an efficient
and inexpensive grievance redressal system for complaints against services provided
by banks.

3. It is applicable to both private and public sector banks,
RRBs and cooperative banks. There are 15 ombudsmen with state-wise jurisdiction
covering the 29 states and seven UTs.

4. After several amendments, the current scheme in operation is
the Banking Ombudsman Scheme, 2006 as amended in February 2009.

5. It specifies 27 categories of complaints that pertain to ATM/debit/credit
cards, recovery agents, failure of banks to provide promised services, levying
service charges without prior notice, non-adherence to the fair practices
code/Banking Codes and Standards Board of India (BCSBI) Codes, internet banking, etc.

Highlights of the BOS
annual report for 2014-15

1. As compared to the year ago, the number of complaints
increased 11.2% to 85,131.

2. Banking Ombudsmen offices addressed 96% of the complaints.

3. Out of 43,035 maintainable complaints under the BOS, only
0.2% or 87 were disposed off with an award unlike in the last fiscal when 207
awards were given.

4. The Appellate Authority (authority beyond the ombudsman, held
by a Deputy Governor of the RBI) received 73 appeals this year.

5. Complaints
related to failure to meet commitments, non-adherence to fair practices code,
both Banking Codes and Standards Board of India (BCSBI) Codes constituted the
largest chunk-29.2%.-of complaints.

6. Complaints related to ATM/Debit card and credit card operations
comprised 12.5% and 8.8% of the total complaints respectively.

7. Other important areas of complaints include: levy of charges
without prior notice (6.5 per cent), loans and Advances (5.7 per cent), Remittances
(3.2 per cent), Deposit Accounts (5.5 per cent).

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