Banks in India are technology driven in most locations. So much so that the personalized customer service which used to be a hallmark of the Indian banking set-up is almost extinct. Centralization of operations and automation of most processes which was done with the intention of maximizing the benefits of specialization, economies of scale and avoiding duplication of processes at the shop-floor- also has its own limitations.
Very often the staff in the branch (especially the new age private sector banks & foreign banks) are not operationally sound incase a technical query is raised by a customer. They may look good and speak articulately but in most cases they are left seeking the refuge of the phone in trying to connect to a ‘back-office’ person when it comes to answering simple queries. The transition in the past decade in the Indian banking system has delineated the processes from the practice. The customer is given a 1-800 number or/ and an email id where he /she is directed to contact in case of a complaint.
The assumption is that this remote customer service point will be able to solve a customer problem as effectively as it would be solved at the branch level. This model presumes that this centralized location is ‘synched-in’ with the happenings on the customer account as they transpired and have the bandwidth to tie-up various loopholes that caused customer dissatisfaction and resulted in the complaint. However in practice, getting a resolution and a timely response from banks is quite a task. This is irrespective of the pedigree- nationalized, private or foreign banks-all seem to exhibit similar lethargy levels when it comes to resolving customer complaints. It is in such situations that approaching the Banking Ombudsman ( BO ) can help get a resolution to the lack of timely and appropriate action by the bank.
Let me illustrate a live case where the BO mechanism was used by the customer when the bank failed to respond in a timely manner (more details can be obtained by clicking on the appended link which provides more details on the BO as well as the locations of the BO statewise).http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=159
Example: In a case of a failed ATM transaction, a customer’s account was debited although no cash was dispensed. The customer informed the bank about the event. Despite follow-up with the bank, the amount was not credited in a timely manner. The customer wrote to the BO. As per the BO’s orders, the amount was credited to the customer’s account but the bank did not pay the penal interest in terms of the existing RBI guidelines for the delayed period which was about 2 months. The bank was directed to pay a penalty @ Rs 100 per day amounting to Rs 6500 by the BO.
The Process getting a complaint resolved through the RBI Banking Ombudsman:
- Any person (customer) whose grievance against a bank has not been solved satisfactorily after a month can approach the BO. The customer should make the complaint ( to the bank) in writing and preferably maintain record of dispatch / delivery of the same
- There are 27 complaint areas that are handled by the BO.( these cover almost the entire gamut of areas such as credit cards, housing loans, remittances, deposit accounts etc). The details are available on page 19 of the appended RBI circular)
- The customer must write to the BO ( e-mail is also accepted in addition to regular letter format sent via post) responsible for the area where his/her bank account is maintained. For eg: A customer has an account with XYZ Bank’s Banjara Hills Hyderabad. Subsequently he moves to Mumbai and continues to use the Nariman Point (Mumbai) branch for his regular banking needs, however he does not close the Hyderabad account and transfer it to Mumbai since connectivity between various bank branches of XYZ Bank enables him to bank without having to close and transfer the account and the proceeds. If he has an unsolved grievance, he needs to write to the Hyderabad office of the BO. Its important therefore to remember to contact the BO in charge of the geographical location where the account is maintained
- The BO on receipt of the complaint will send it to the respective Banks’ Nodal Officer. Remember Every bank has a nodal officer. The details are displayed in branches of on the banks website. If you cannot find them, then please ask-it’s your right!
- The bank is given a period of one month to resolve the pending customer complaint
- The BO’s endeavor is to promote a settlement of the complaint through the process of conciliation /mediation. The BO is not bound by any legal rule of evidence and relies more on the evidence placed in the matter. The usual guiding parameters are : banking laws, RBI directives etc
- If the complaint is not resolved between both the parties within the stipulated time frame of 1 month, the BO passes an ‘Award’ (Order).This is done after giving both the parties an opportunity to present their case. Physical appearance by both the parties is not mandatory but may be required
- A copy of the order is sent to the complainant, bank and the nodal officer.
- The complainant (customer) has a time of 30 days within which to accept/reject the order. The acceptance can be indicated by submitting a letter to the bank indicating the acceptance of the order in full and final settlement of the claim.
- The bank gets a time of one month to implement the BO’s order-after getting the consent letter from the complainant (customer)
- Incase the order is not acceptable to the bank; it can file an appeal to the RBI within one month from the date that it receives the consent letter from the customer. Incase the order is unimplemented by the bank, the BO can report the same to the RBI for necessary further action
- Some important numbers: There is no monetary ceiling on the on the subject matter of the complaint that can be considered by the BO. However the value of compensation demanded for any loss suffered by a complainant in case of general complaints the compensation sought should not exceed Rs 10 lakhs. For credit card complaints the compensation sought should not exceed Rs 1 lakh ( this is in addition to the disputed amount for which there is no monetary ceiling prescribed)