 "Will ombudsmen help bank customers?")
According to the Charter of Consumer Rights, banks cannot discriminate a customer based on gender, religion, caste and physical ability. Also, customers should not be subject to coercive contractual terms or misleading representations. Banks should only offer financial products that are suitable to a customer. Banks should also communicate their compensation policy if there are mistakes, lapses in conduct, or non-performance. To protect customer’s privacy, banks are not allowed to share customers’ details with anyone without consent.
At a recent event, S S Mundra, deputy governor of RBI, said: “Very often we found the fair practices code adopted by banks/financial institutions is observed more in breach than in practice.”
RBI has asked all public sector banks to appoint internal ombudsmen, also called as chief customer service officers (CCSOs). The regulator, however, asked only top private and foreign banks for this based on different parameters such as their asset size and business mix. Some of these include ICICI Bank, HDFC Bank, Standard Chartered Bank and Citibank.
The growing number of banking complaints clearly shows the reason for RBI’s concern. In 2014-15, RBI received 85,131 complaints through 15 offices of its banking ombudsmen. This was a 11.2 per cent rise compared to the previous year. Of these, 26,529 complaints were against State Bank of India and its associate banks (an increase of nine per cent), 28,891 were against other public sector banks (18 per cent increase) and 19,773 were against private banks (16 per cent increase).
Individually, complaints lodged with the banks are much higher. In 2015-16, for example, top private sector banks such as HDFC Bank received 1,65,369 complaints, ICICI Bank got 1,91,453 and Axis Bank received 227,676, according to the banks’ website.
Consumer activists feel that this additional layer of grievance redressal might not be too helpful. “RBI’s own Banking Ombusdsman is not too effective if you look at the ratio of maintainable complaints and non-maintainable complaints,” says Jehangir Gai, a consumer activist. According to RBI’s report of the total complaints filed with the Banking Ombudsman in 2014-15, nearly 50 per cent were non-maintainable. A year before that, 43 per cent of the complaints were non-maintainable.
Sharing his views, Arun Saxena, president of International Consumer Rights Protection Council, says that he, too, doesn’t see much changing in the quality of service or customer redressal system, as there already many existing redressal systems starting at branch level. But these don’t help.
Gai says approaching ombudsman would help if the customer only wishes to resolves an issue like cash not dispensed from the ATM or extra charges levied by bank.
A chief manager with a Chennai-headquartered public sector bank says many banks have appointed a retired general manager as internal ombudsman. These officials go through the complaints independently and in detail before taking a call on the matter. “He acts as an independent arbitrator,” says the chief manager. If the customer is still unsatisfied with the decision or if the CCSO doesn’t act for 30 days, a customer can approach the RBI’s Banking Ombudsman. Before the internal ombudsman was created, all banks were required to have a nodal officer. RBI has left the decision on the bank to segregate the duties of nodal officer and internal ombudsman.
Approaching a bank's internal ombudsman is similar to reaching out to RBI's banking ombudsman. You have to give bank a month to resolve the query. If you are not satisfied you can approach CCSO. You can get all the details of a CCSO on a bank's website - these include name of the officer, address, phone number and email address.
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