Money & Banking

RBI to focus on customer rights, banking ombudsman scheme

Our Bureau Mumbai | Updated on January 23, 2018 Published on August 27, 2015

In a bid to protect consumers from mis-selling by banks, Reserve Bank of India will fully operationalise Charter of Customer Rights in banks and review the Banking Ombudsman scheme to reach out to rural areas.

“The Reserve Bank will focus on full-fledged operationalisation of the Charter of Customer Rights in banks. The Banking Ombudsman scheme is also being taken up for a complete review in 2015-16.

“Focused field visits/study over mis-selling by banks in semi urban areas and non-functioning/malfunctioning ATMs across various parts of the country have also been planned,” RBI said in its Annual Report for 2015-16.

The Charter of Customer Rights was released on December 3, 2014 for protection of bank customers highlighting their five basic rights -- Right to Fair Treatment, Right to Transparency, Fair and Honest Dealing, Right to Suitability, Right to Privacy and Right to Grievance Redress and Compensation.

For strengthening the grievance redressal mechanism available to bank customers, all public sector banks, select private sector and foreign banks were advised to appoint Chief Customer Service Officers as Internal Ombudsman in banks who should examine complaints, which remained unresolved/ partially resolved by the internal grievance redressal mechanism of the bank.

RBI would soon issue operational guidelines for appointing these officers.

As per RBI’s Deputy Governor S S Mundra, RBI had received 85,000 customer complaints through banking ombudsman last year.

“The single largest source of complaints (29 per cent of total complaints) was non-compliance with BCSBI code, followed by complaints about ATM and debit cards. These areas should become the focus for improvement.”

RBI is also reviewing its Banking Ombudsman system to see how it can be extended to non banks to make it more effective in rural areas.

Each bank has also been asked to set up an internal ombudsman system, which will examine the bank cases to see if resolution is possible before it is escalated to RBI’s ombudsman system.

Published on August 27, 2015
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