Ombudsman can’t be the first option

Pushpa Girimaji

I had sent a complaint against my bank to the Banking Ombudsman, hoping for a resolution of my grievance. However, the Ombudsman has rejected it on the ground that it was a ‘first resort complaint’. Is this rejection valid? What do I do now?

The Banking Ombudsman Scheme says: ‘No complaint to the Banking Ombudsman shall lie unless the complainant had, before making a complaint to the Ombudsman, made a written representation to the bank and the bank had rejected the complaint or the complainant had not received any reply within one month after the bank received his representation or was not satisfied with the reply given by the bank.’

In other words, you can approach the Ombudsman only after exhausting the grievance redress mechanism with the bank. Unfortunately, consumers are not aware of this pre-condition and, as a result, many a complaint before the Ombudsman are rejected. 

During 2014-15, 14 per cent of the complaints received by the Ombudsmen were ‘first resort complaints’ or complaints sent to the Ombudsman without first complaining to the bank. Under the Banking Ombudsman scheme, you can send your complaint by snail mail or online. Among the complaints received online during 2014-15, 10,317 complaints were first resort complaints.

The annual report of the Ombudsman scheme says that even though the Ombudsmen rejects these complaints, they do forward them to the bank concerned for required action. So it is possible that your bank is already aware of your problem.

I would suggest that you first write to the nodal officer of the bank and see if it will be resolved at that level. If not, re-send your complaint to the Ombudsman along with a copy of the letter of the nodal officer’s reply.

Having said that, I must also point out that the banks ought to inform customers about the grievance redress system available to them. In fact, every statement of account issued by the bank or the pass book provided should contain information on the contact details of the grievance redress officer or the nodal officer of the bank. In fact, the Reserve Bank had once commented in one of the annual report on the Banking Ombudsman scheme that the large number of ‘first resort’ complaints reflected the lack of awareness of the bank’s grievance redress mechanism among the customers or inept handling of customers by front line staff or inaccessibility of the staff. It’s time banks remedied this.

 My grievance pertains to certain irregularities in the rate of interest charged by the bank on a loan that I have taken. Does this issue come under the jurisdiction of the Ombudsman? I also want to know whether there is any appeal provision against the decision of the Ombudsman?

Yes, it does come under the purview of the Ombudsman. I would suggest that you look up the annual report of the Banking Ombudsman scheme. You can find it on the website of the Reserve Bank. You will get lot of information about the scheme in it. But more importantly, it gives in brief certain exemplary cases decided by the Ombudsman and the appellate authority. If you see those cases, I am sure you will find complaints similar to yours. That will also help you better understand how the complaints are resolved by the Ombudsmen.

To answer your second question, you can appeal against the decision of the Ombudsman, but must do so within 30 days of receiving a communication from the Ombudsman. The appellate authority is the deputy governor, in charge of the department of RBI administering the Ombudsman scheme. During 2014-15, 85,131 complaints were received by the 15 offices of the Ombudsmen in the country. The appellate authority received 73 appeals during this period. 

The Ombudsmen organise consumer awareness programmes through innovative ways — one of them during the year was a permanent, prominent display of the salient features of the Banking Ombudsman scheme and the contact details of the Ombudsman on a train plying between Secunderabad and Balarsha. One can gauge the grievances that consumers have against banks from the fact that the office of the Ombudsman received a number of calls complaining about banks in response to this advertisement. In fact, a number of them called from the running train itself!