The Banking Ombudsman (BO) scheme, which was launched in 2006 as part of the Reserve Bank of India’s Consumer Education and Protection Department, has released a report that details some exemplary cases of grievance redressal by the Ombudsman in favour of the bank customers.
The report published on the Reserve Bank’s website
shares in some details the various issues that the Ombudsman has resolved. This has been classified into broad categories under which customers face such hassles as ATM transaction, credit charges, deposits, electronic banking transactions, loans and advances, mis-selling, pension remittance, service deficiency, among others.
Credit Card Dues in Crores after 13 Years
In an interesting case of redressal by the Ombudsman, a customer alleged that he had paid Rs35,000 in settlement of his outstanding dues for his two credit cards. However, 13 years after paying all his dues, he received two separate notices from banks for paying Rs1.24 crore and Rs1.58 crore, respectively as outstanding amount on his credit cards.
The banks in their defence replied that their credit cards data was inadvertently sold to an asset reconstruction company (ARC) and that it had to be taken up with the ARCs to nullify the outstanding dues and carry out necessary amendments in credit status of the customer.
ARCs have been specially established for the purpose of purchasing bad assets or non-performing assets (NPAs) from banks at a negotiable price and help banks to clean up their balance sheets (by removing the NPAs).
In this case, the banking ombudsman directed the banks to settle the grievance by making outstanding dues as nil and clean up the complainant’s credit history with the credit information companies.
The banking ombudsman report also goes on to document commonplace cases such as ATM frauds where a complainant claimed that he received a call that his ATM card had been blocked and that he had to share his credentials to unblock the same.
The complainant shared his details and instantly after the call Rs53,900 were deducted from his account. He immediately informed the bank and requested that they block his card.
However the fraudulent transactions continued and the complainant faced a total loss of Rs6,88,900 from several transactions carried out from his card.
The banking ombudsman observed, “Since the complainant had reported the fraud immediately to the bank, the latter should have taken necessary action to disallow any further transaction. As such, the bank is advised to pay Rs6,35,000 or the amount which was withdrawn after reporting the first fraudulent transaction to the bank.”
The report also mentioned other such successful cases of redressal where from a complainant’s account, Rs25,000 was withdrawn from an ATM in another city even though the card was in his possession in a different city.
The banking ombudsman advised the bank to pay the amount since the bank failed to prove negligence or fault on the csustomer’s part.
This is part of the RBI’s Circular on Limiting Liability of Customers in Unauthorised Transactions where it mentions that, “Third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction
When bank deducts minimum average balance charges from a zero balance account
A customer claimed that he received an e-mail from the bank informing him that his monthly balance requirement for his newly opened savings (SB) account was Rs2,500. However, as the customer had opened a zero balance account, he took the case up with the bank and it was then that he was informed that his account was a regular savings account with a requirement of minimum average balance (MAB) and that Rs3,500 was already deducted from the account in view of the same.
The banking ombudsman in this case observed that after levying the MAB charges, the available balance in the complainant’s bank account became zero and subsequently when there was a credit entry in the account, the bank debited the complete amount towards outstanding MAB charges. The BO advised the bank to refund complete MAB charges.
This was due to an RBI guideline on the levy of penal charges on non-maintenance of minimum balances in savings bank accounts which states that, “It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance
.” and hence the banking ombudsman claimed that it was not justified in levying such charges for the period when the balance was nil.
Fraudulent Transfer through RTGS
The banking ombudsman has also received cases of forgery where a complainant claimed that an unauthorised real-time gross settlement (RTGS) transfer of Rs8.50 lakh has been done from his account using a cheque, which was neither issued nor signed by him.
Interestingly, the customer claimed that he did not even receive an SMS alert regarding the debit.
When the customer took this issue, the bank reversed Rs6.39 lakh. However, the balance amount of Rs2.11 lakh was not reversed by the bank.
On enquiry, the bank informed him that a request was received by the bank for change of the customer’s mobile number. However on further enquiry, it was observed that the signatures on the application as well as on the cheque were different from those in the bank records.
Keeping the above in mind and the fact that the bank had credited Rs6.39 lakh to the customer’s account, established that the bank had agreed to the claim of a fraudulent transaction in his account. The banking ombudsman advised the bank to pay the balance amount to the complainant.