October 12, 2010 / 8:44 AM / 7 years ago

All about the banking ombudsman

Banking is an integral part of modern day life. Depositing money, making payments, receiving money from others, making a fixed deposit, taking a loan etc are everyday banking chores that a common man accomplishes on an ordinary day.

A man walks past a bank advertisement for four wheeler vehicle loans in Mumbai March 22, 2010. REUTERS/Arko Datta/Files

Banks offer several services to their customers and are expected to deliver quality services. What do you do if the banking system fails to meet your expectations? How can you improve the way in which your bank conducts its business? Where do you lodge your complaint against poor services of your bank?


The Banking Ombudsman Scheme is designed to improve weaknesses in your bank’s operations. The Banking Ombudsman Scheme was launched in the year 1995 to address consumer grievances against the banks in India. Since then it has been modified from time to time to improve its efficiency.

The Banking Ombudsman is a quasi judicial authority. The offices of the Ombudsman are located throughout the country. A single office caters to multiple areas.

For example, the office of the Ombudsman at Mumbai caters to the whole of Maharashtra and Goa. So if your bank in Panjim bounced your cheque in error and fails to make good its error, you can file a complaint with the Ombudsman in Mumbai. You can get the details of the jurisdiction of the Ombudsman here

Anybody who has a grievance against a bank can lodge a complaint with the Banking Ombudsman in whose jurisdiction the branch of the bank complained against is located.

In cases where the bank has centralized some of its operations, like housing loans, credit cards, etc. and the complaint relates to any such centralized operation, the complaints would have to be made to the Banking Ombudsman in the State in which the bank customer receives the bill.

Further, all regional rural banks, commercial banks and even scheduled primary cooperative banks having business in India are covered by the Scheme. Internet banks too come under the net of the Ombudsman scheme.


It is a simple and hassle free process. One has to file a written and signed complaint with the office of the Ombudsman under whose jurisdiction the defaulting branch of the bank is located. The complaint does not have to be in any specific format. If one does not know how to go about his/her complaint, the scheme provides a standard format for lodging complaints.

The form is relatively easy to understand. However, one may also use his/ her own format to file a complaint. You may also file your compliant electronically.

The Banking Ombudsman will provide the opportunity to settle the dispute by agreement. In the event of failure to resolve the issues by the parties between them, the banking Ombudsman will hear each side, assess the documents and pass an Award.

If either party to the dispute does not agree with the Award and wants to pursue the matter further, they can file an appeal before an Appellate authority. The Appellate Authority is the Deputy Governor in charge of the Banking Ombudsman Scheme. The Ombudsman also has the powers to reject a complaint.

For more information on the process of filing a complaint and the powers of the Ombudsman visit here


The Ombudsman can address several issues. Failure of the bank to render services as promised is the primary reason behind most grievances. For example, if the bank fails to honour a cheque issued by an account holder in spite of having sufficient funds in his account, the account holder can complain to the ombudsman.

In a similar case of Ishwar Prakash Chopra Vs. State Bank of India, CPR 1995(1) 429 (SCDRC - Maharashtra), a complaint was filed for deficiency in service of the bank for dishonouring the plaintiff’s cheque by bank despite sufficient balance in the bank account. It was held that dishonoring cheque despite sufficient funds due to negligence is a deficiency in service on part of the bank of the opposite party.

In another instance, in the case of Narayan Rao Mahadeo Manjrekar Vs.Sangli Bank Ltd.& another, CPR1995 (1) 582 (SCDRC - Maharastra), a complaint was filed for default in service for charging of interest at higher rate than that agreed upon in the loan agreement with the bank. It was held that the charging of the interest by a bank contrary to the stipulation of loan is deficiency in banking service and the complainant was entitled to get Rs.5 L as compensation.

Complaints related to interest rates, cheques, demand drafts, bank guarantees, loans, liens, fixed deposits, lockers etc can be filed with the banking Ombudsman. You can approach the banking Ombudsman for your complaints related to credit cards and internet banking as well. To make the working of the ombudsman effective the RBI funds the office of ombudsman entirely. A comprehensive list of the complaints that can be filed with the Ombudsman can be found here#2

Under the Ombudsman scheme amended in 2006, a customer can file a complaint against the bank in the event of failure of the bank to follow the provisions of the fair practices code for lenders or the Code of Bank’s Commitment to Customers issued by the Banking Codes and Standards Board of India (BCSBI). The rising complaints received against banks recovery techniques, non-observance of the RBI’s guidelines on engagement of recovery agents by banks has also been specifically brought under the scope of the Ombudsman Scheme.

However, no complaint can be filed unless the complainant has approached the bank first to resolve the issue. Also, the complaint should be filed within a year from which the complainant received any communication from the bank on the subject matter. In order to keep the process fast and efficient, the scheme also requires that subject matter of the complaint should not be one that had previously been dealt with by the Ombudsman or any court of law.


Statistics show the banking Ombudsman Scheme has been effective in dealing with customer complaints efficiently and in reasonable time. To give an example, during the year 2007-08, the Banking Ombudsmen received 47887 complaints. There was a 24 percent rise in the number of complaints filed in the previous year (38,638). The Banking Ombudsman could settle 89 percent of the total complaints as against 84 percent in the previous year. Further, of the 11 percent of complaints carried forward to the next year, only as little as 6 percent were more than 2 months old.

However, the scheme is not entirely error free and some consumers have complaints against the Ombudsman’s office. In some instances, impolite behaviour and delay in responding to customers has been a common cause of distress. You can get a list of deficiencies in the services of the Ombudsman at www.customercomplaint.in


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