The working group headed by Suma Varma, will also take into account recommendations of the Damodaran Committee on improvement of customer services in banks and suggestions of the Rajya Sabha Committee on subordinate legislation

Mumbai: Seeking to improve banking services and ensure speedy redressal of grievances of customers, the Reserve Bank of India (RBI) has set up a working group to update the Banking Ombudsman Scheme, 2006, reports PTI.

The working group, to be headed by senior RBI official Suma Varma, will also take into account recommendations of the Damodaran Committee on improvement of customer services in banks and suggestions of the Rajya Sabha Committee on subordinate legislation.

"With a view to examine the Scheme in its entirety, an internal working group has been constituted in RBI under the Chairmanship of Suma Varma, Chief General Manager, Customer Service Department, RBI," said the Annual Report of the Banking Ombudsman Scheme (BOS), 2011-12.

The Group will include two Banking Ombudsman, representatives from regulatory wings of RBI, Indian Bank's Association (IBA) and Banking Codes and Standards Board of India (BCSBI).

The working group will identify grounds of complaints that have become redundant and add new grounds reflecting aspirations of customers.

It would also examine the possibility of extending the scheme to cooperative banks and review the grounds of appeal under the BOS.

The Damodaran Committee was set up in 2010 by RBI to look into banking services rendered to retail and small customers, including pensioners and also to look into the system of grievance redressal mechanism prevalent in banks, its structure and efficacy and suggest measures for expeditious resolution of complaints.

BOS was notified in 1995 and has been revised four times since then in 2002, 2006, 2007 and 2009 to make it more relevant and effective.

Presently, there are 15 Banking Ombudsman with specific jurisdiction covering the 29 states and seven Union Territories.

The BOS covers grievances related with credit card complaints, internet banking, deficiencies in providing the promised services by bank and its sales agents, levying service charges without prior notice to the customers etc.

Among others it also covers complaints regarding non-adherence to the Fair Practices Code adopted by individual banks, non-adherence to Banking Codes and Standards Board of India's Code of Bank's Commitment to Customers.

Presently, there are 27 grounds on which customers can approach the Banking Ombudsman citing deficiency in banking services.

As per the Annual Report, the Banking Ombudsman offices received 72,889 complaints in 2011-12 versus 71,274 complaints in the previous year.

"Kanpur and New Delhi continued to be the centres receiving the highest number of customer complaints in 2011-12, followed by Chennai and Bhopal," it said.

The rate of disposal of customer complaints by Banking Ombudsman was 94% during 2011-12, the same as that done during the previous year, it added.

The largest number (25%) of customer complaints were about failure to meet commitments/non-observance of fair practices code, followed by (21%) card related (ATM/Debit/Credit) complaints and complaints relating to deposit accounts (12%).

Card related complaints constituted the single largest ground of complaints, it said.

Out of the total 14,492 card related complaints, 9,348 complaints were related to ATM/Debit Cards.

Wrong debits to account, non-dispensation of money from ATM, skimming of cards, unsolicited cards, unsolicited insurance policies, recovery of premium, charging of annual fee despite offer of card as 'free' card, authorisation of loans over phone, wrong billing, settlement offers conveyed telephonically, non-settlement of insurance claims after the demise of the card holder, excessive charges were among the major reasons for complaints.