The quality of service provided to customers is of paramount importance in the banking system. When customer expectations are met, it contributes significantly to a bank’s growth and development. However, despite banks’ efforts, complaints from customers about defective services persist. The Reserve Bank of India (RBI) established the Banking Ombudsman Scheme to address this.
Banking Ombudsman A Judicial Authority.
The Banking Ombudsman is a quasi-judicial authority appointed by the Government of India to provide effective complaint resolution for banking customers. It acts as a senior official designated by the RBI to address grievances raised by customers.
Background and Need
In the 1960s, the lack of a proper grievance Redressal forum burdened the consumer forum with an upsurge in cases related to banking complaints. Customers expressed frustration with banks, and the RBI faced pressure to take action. Consequently, the RBI directed affected banks to devise a plan to address complaints adequately. However, this process still needed to be improved.
Establishment of the Banking Ombudsman Scheme
Under Section 35A of the Banking Regulation Act, of 1949, the RBI introduced the Banking Ombudsman Scheme. Initially, there were about 15-20 Banking Ombudsman centers. This includes all Banks in the country or all financial organizations. If a customer faces any banking-related issue then the customer can file a complaint against those financial organizations to the banking ombudsman.
How Does It Work?
- Complaint with the Bank: If a customer facing any banking-related issues with a Bank or any financial organization they must visit the relevant bank. If the banking authority cannot provide the resolution and they are not responding to the customer query and if the issue is not resolved within a month, then the customer can go to the door of the banking ombudsman.
- Contacting the Banking Ombudsman: If the bank’s response remains unsatisfactory, customers can approach the Banking Ombudsman. The Ombudsman investigates the complaint impartially.
- Appeal Process: If dissatisfied with the Ombudsman’s decision, customers have the option to file an appeal, and the RBI’s Deputy Governor acts as a supreme authority to make any decision.
Effectiveness and Customer Satisfaction
This approach has proven highly effective, benefiting numerous consumers. The Banking Ombudsman ensures that bank’s address complaints promptly and efficiently, contributing to overall customer satisfaction.
In conclusion, the Banking Ombudsman plays a crucial role in enhancing bank efficiency and meeting customer demands. By providing an accessible and impartial platform for complaint resolution, it contributes to a healthier banking ecosystem.
