The Few Cases Where Customers Got Justice from the Banking Ombudsman
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.
 
ATM Frauds
 
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.  
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    COMMENTS

    GLN Prasad

    3 months ago

    Maybe, they preferred to quote one favorable decision for 1000 denials, as their performance was published in several newspapers. Ombudsman works for the bank and not for the public.

    P M Ravindran

    3 months ago

    Good to know that there are still ombudsmen who can take fair decisions. But I have enough of experiences with them, not only banking but insurance and local self government too, that I believe that these are also sold offices. In one case I had written to the CPPC of SBI at Thiruvananthapuram regarding the arrears due and when there was no reply for over a month I had approached the Banking OM only to get a reply that it doesn't come under the purview of the BOM Act and there was no provision for appeal either. That was when I wrote to the then Governor RBI, Raghuram Rajan, narrating the facts and exposing the fraud. I got my arrears within the next one month. But horror of horrors. after another couple of months I got a letter fro a Director in RBI (the appellate authority) that the (non existent) appeal was not sustainable!

    VASANT KULKARNI

    3 months ago

    EYEOPENER FOR BANKS WHO NEGLECT CUSTOMERS.

    Harish

    3 months ago

    The headline of the article says it all.

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  • Hospital, Doctors To Compensate Patient with Rs5.66 Lakh for Hepatitis C Infection after Surgery
    Mumbai – A lady patient who said she contracted the incurable Hepatitis C virus following a surgery at a reputed hospital in Mumbai was granted Rs 5.66 lakh compensation by the South Mumbai District Consumer Disputes Redressal Forum that includes reimbursement of hospital and litigation charges. 
     
    The lady, 52-years old in 2007 and healthy, was recommended surgery for hysterectomy by the doctors she consulted after she underwent one month of heavy bleeding. Upon admission at Bombay Hospital, her body and blood tests showed normal parameters before the surgery. 
     
    The surgery was conducted on 24 July  2007 "only after receiving a clean chit from the Hospital that she had none of the viruses such as Hepatitis B, C or E or HIV."  
     
    However, within one month the lady, "found her skin was itching, her eyes were turning yellow, her urine had turned dark, her stools had become pale and she started suffering from influenza, aching joints and muscles, extreme tiredness, fever, lack of appetite and pain in the stomach,’’ the Redressal Forum said in its order. 
     
    She was asked by her family physician Dr Prashant T Mane to get complete blood count, liver function tests, routine urine analysis, Australia Antigen and a few other tests. Since these tests didn’t reveal any abnormality, the patient consulted Dr Amarapurkar at Bombay Hospital, who suggested additional tests, which tested positive HCV (i.e., virus of Hepatitis). 
     
    The presence of Hepatitis C in her body would bring down her immunity level and make her prone to contracting all kinds of dangerous diseases, including contagious diseases. 
     
    The patient suspected she may have contracted Hepatitis C virus from the hospital since all her tests showed normal status when she came for the surgery. She was not tested by the hospital for Hepatitis C before the operation. 
     
    Presence of Hepatitis C would dramatically alter her normal life, interaction with close family members, including her husband, need separate common household items including towels, and require her to take periodic medical check-ups, and regular medicines for the rest of her life. This could also lower her immunity to several other diseases. 
     
    The hospital, doctors and other technicians "have caused grave, irreversible and irreparable physical, emotional, psychological, financial and moral harm to her,’’ the complainant said in her application to the Forum. 
     
    The hospital and other defendants in turn said the lady was suffering  "heavy vaginal bleeding for over a period of one month and the root cause of which was presence of intra uterus tumours called fibroids which were pressing the inner lining of the uterus and causing extensive life threatening loss of blood.’’
     
    The infection may have been contracted after the surgery, the hospital and doctors said in their reply. They explained certain situations in which Hepatitis C virus can be contaminated in the body of the patient. Those situations include: a. Injecting narcotic drugs b. Use of tattoos c. Body piercing d. Transfusion of infected blood e. Sexual intercourse with infected person f. Use of unsterile needles and syringes g. Dental treatment h. Unsterile medical treatment i. Nasal inhalation of cocaine j. Manicure/pedicure k. At beauty saloon l. endoscopy m. French kiss n. Any form of body fluid exchange. 
     
    The lady patient, who has three healthy and grown up children aged 22, 28 and 32 years, and is herself employed for 34 years at a five-star hotel, denied the possibility of her contracting the virus from any other avenue. Her lawyers asked for Rs19.71 lakh as compensation as cost of damages, compensation, mental agony. The jurisdiction of the Forum is to grant up to Rs20 lakh.
     
    The Forum also pointed out that "the surgery can be performed for removing the uterus from the abdomen of the patient or from the vaginal cavity. In the present case, the said surgery is performed by giving her general anaesthesia & through her vaginal cavity and not from the abdomen, hence the possibility of use of unsterilised equipment or machinery or needles at the time of surgery cannot be fully ignored.’’
     
    The Forum granted her compensation of Rs5 lakh as token compensation for the grave irreversible and irreparable mental agony, life-long restrictions, financial losses, loss of reputation in society and risk to the family members of the patient. It also permitted reimbursement of Rs56,000 spent on the hospital expenses and Rs10,000 as litigation costs by a consumer court. The order was read on 24 April, 2019 in Mumbai. 
     
    A full copy of judgement can be read by clicking the following link
     
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