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Money Aug 6, 2012

How to make the most of banking ombudsman system

By Bindisha Sarang

Picture this: You slip your debit card in an Automated Teller Machine (ATM), hoping that it will spit out cash. After making the usual noise- which every ATM makes - all you get is an ATM slip, stating the amount withdrawn, but the money never came. You contact your bank's call centre, but for some reason the voice on the other side is of no help and the visit to your bank is equally futile.

While you've been getting verbal assurance that the money will be credited into your account, it still remains an empty promise. Finally, with revenge on your mind you decide to approach the banking ombudsman.

Stories like these are not uncommon, be it an unsolicited credit card, or dispute over a wrong bill, or even a delay in getting your credit card statement on time. At times, we all face these small irritating issues with our banks, but fail to get their response on time. If you are in such a place, the Reserve Bank of India's (RBI) banking ombudsman system can come to your rescue. Here's a step by step guide to the banking ombudsman system.

Step 1: Approach your own bank first.

71,274 is the number of complaints which were received by the banking ombudsman system as per RBI's annual report for 2010-2011. The number is larger, but that does not mean you should approach the ombudsman, for every compliant. First and fore most you need to approach your bank. S Govindan, General Manager- Operations, Union Bank of India, says, "First approach your own bank. Every bank has a Nodal officer to look into complaints or grievance redressal. Banks get three weeks to look into the complaint." Once you've lodged the complaint you will need to wait for a month to get a resolution. A senior official of State Bank of India, who did not want to be named in media, says, "If you have lodged a complaint with the bank and it hasn't replied within a month, or if you are not satisfied with its reply, or the bank rejects your complaint, only then you should approach the ombudsman."

Here's a step by step guide to the banking ombudsman system.

Step 2: Visit the ombudsman website.

You can write the complaint on a paper and send it to the ombudsman under whose jurisdiction, the bank branch complained against is situated. You can get the details at the bank branch or visit http://tinyurl.com/blmmgsp to get the mailing address of your respective ombudsman office. Alternately, you could simply visit the apex bank's website and lodge the complaint online at http://tinyurl.com/bmstczp .You don't need to pay a fee to file a complaint, it's a free service.

Step 3: Gather details and relevant documents.

The complaint form needs to be filled in detail. You need to provide your personal details, along with the bank details. So, do keep your bank branch address, account number and copies of correspondence you've received from the bank, regarding the specific complaint handy. Also provide facts along with the relevant documents. Mention the nature and extent of the loss caused to you and the relief you expect the ombudsman to provide. You will also need to mention that you will comply with required conditions.

Step 4: Mediation.

SBI senior official says, "The ombudsman will then look into your complaint and the resolution provided by the bank. They will try and intervene a resolution by agreement between you and the bank." If both parties are satisfied with the terms of the settlement, the ombudsman will pass an order. Once you agree with the order, neither you nor the bank can refuse to abide to it later. But don't just assume that the ombudsman will always work in your favour; banks have an equal right to defend themselves. And the ombudsman can even reject the complaint based on their assessment of the complaint.

Step 5: Award.

Even after a month if there no settlement by agreement, the ombudsman will pass an award. You have a choice to accept the award as a full and final settlement of your complaint or reject it and proceed to the next step.

Step 6: Appellate Authority.

Govindan says, "If you are not happy with the award, you will then need to approach the appellate authority. The deputy governor of RBI is the appellate authority." Keep in mind, that even banks can approach the appellate authority against the award passed by the ombudsman. You usually get 30 days to get in touch with the appellate authority from the date of receipt of the award. The appellate authority can dismiss or allow your appeal to stand or even change the award amount.

As per RBI's annual report on Banking Ombudsman Scheme 2010-2011: The ombudsman issued 278 awards during the year. And, around 30% of the complaints dealt with were settled by way of mutual settlement or by issue of awards.

The award can be in the range of few hundred rupees and even got to lakhs, depending upon the case.

Of course, you will need patience to deal with the ombudsman system. But a lot of good changes have happened in the past, only because customer have lodged complaints with ombudsman and followed through.

by Bindisha Sarang

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