The Hindu Business Line : Beef up grievance redressal, banks told

WEAKEST LINK: Ms Usha Thorat, Deputy Governor, RBI, and Mr U. K. Sinha, MD, UTI AMC, at the Financial Planning Congress 2006 in the Capital on Monday. - Kamal Narang

New Delhi , May 29

Banks must urgently strengthen their own internal machinery for customer grievance redressal, as this was perhaps the weakest link in the banking system, the Deputy Governor of the Reserve Bank of India (RBI), Ms Usha Thorat, said here today.

Inaugurating the Financial Planning Congress 2006, Ms Thorat asked banks to set up nodal offices and give them wide publicity at various centres so that a member of the public knew whom to approach in the event of a grievance.

The theme of the congress was "establishing a consumer centric financial service delivery infrastructure". The congress was organised by Financial Planning Standards Board (FPSB) India.

Complaints double

The RBI Deputy Governor highlighted that the number of complaints received by the banking ombudsman offices had more than doubled to 13,483 during the quarter ended March 31, 2006, which was the first quarter after the revised banking ombudsman scheme came into force from January this year.

"This increase could be attributed to the fact that very often the complainants approach the banking ombudsman office directly or send complaints to the RBI directly instead of first approaching bank's own internal machinery for grievance redressal," she said.

India has about 15 banking ombudsmen at all state capitals and they go into individual grievances relating to the banks in that region. The Banking Ombudsman Scheme was revamped this year to enlarge the extent and scope of the authority and functions to specifically cover redressal of grievances against deficiency in banking services.

This included a variety of banking products/services such as loans and advances, credit cards, non-payment/inordinate delay in the payment or collection of cheques, drafts, bills, non-issue of drafts to customers, non-adherence to prescribed working hours by branches etc.

A banking ombudsman functions as an arbitrator of any dispute with mutual consent of both the parties so long as the value of the claim does not exceed Rs 10 lakh. Under the new scheme, the complainants would be able to file their complaints in any form, including online.