Banking Ombudsman Disposing of More Complaints Through Settlement; Issued Awards in Only 0.2% Cases in FY2017-18
The office of the Banking Ombudsman (BO) has disposed of more than 60% of the complaints through mutual settlement or agreement and has issued awards in only 0.2% or 148 cases out of the 83,532 maintainable cases, reveals a report from the Reserve Bank of India (RBI).
As per the report, during FY2017-18, the 21 offices of BO from across the country received 1.64 lakh complaints from bank customers. This ranges from non-observance of fair practices code (22.1%), ATM and debit card issues (15.1%), credit card complaints (7.7%), failure to meet commitments (6.8%), and mobile and electronic banking (5.2%).
The BO also received complaints on issues relating to pension, levy of charges without notice, loans and advances, remittance, direct selling agencies (DSAs) and recovery agents and mis-selling, each accounting for 5% or less of the total complaints received.
"Although the office of BOs handled 28% more complaints in 2017-18, the disposal rate was 96.5% as against 92% in 2016-17. There was a marked increase in the number of complaints resolved by agreement or through mediation, which rose to 65.82% in 2017-18 from 42.43% during the previous year," the report says.
RBI says the scheme promotes settlement of complaints by agreement through conciliation or mediation by BOs. If the parties fail to arrive at an acceptable conclusion by agreement, the BO gives a decision or passes an award.
However, out of the 83,532 maintainable cases, the BO issued awards in only 148 cases, out of which it was implemented in just 111 cases.
Consumers or lenders not happy with the BO award can file an appeal with the deputy governor in charge of the Consumer Education and Protection Department (CEPD) of the RBI, which is the appellate authority (AA). Due to a revision of the BO scheme, during FY2017-18, there was an eightfold increase in the number of appeals (125) compared with 15 recorded in the past year.
Of these, 115 appeals were received from complainants who were aggrieved by the decision of the respective BOs whereas 10 were filed by the banks. The AA handled 132 appeals during the year, including seven appeals that were pending at the beginning of the year. Of these, 37 appeals were disposed of as on 30 June 2018, the report shows.
The BO scheme is applicable to scheduled commercial banks, scheduled primary urban co-operative banks and the regional rural banks (RRBs), small finance banks and payment banks from across the country. The scheme is managed by RBI through 21 BO offices covering all states and union territories.
As per the revised scheme, there are no restrictions on the BO, in terms of the amount involved in the case. It is also empowered to award a compensation of up to Rs20 lakh for losses from deficiency in service. In addition, the ombudsman can give a compensation of Rs1 lakh to cover harassment and mental anguish, which was previously available only to credit card complaints.
During FY2017-18, the BO received 1,63,590 complaints with almost 16.3% or 26,653 complaints received from the Delhi office. No wonder the north zone accounted for maximum number of complaints. However, east zone accounted only for 15% of the total complaints received by the BO.
According to the report, the number of customers filing complaints online at the BO is increasing significantly. During FY2017-18, 64% of the total complaints were filed through internet, of which 49% were through emails and the rest 15% were filed on the BO portal.
During FY2017-18, the BO rejected the maximum number of cases (89% or 25114) for not being on the grounds specific to the scheme. From the rest of the complaints, majority or 8.27% (2,337) were rejected due to lack of ‘elaborate documentary and oral evidence’. However, since the revised BO scheme has allowed such rejected cases to be appealed from July 2017, there was an increase in appeals before the Appellate Authority.