THE SERIOUS FLAW IN BANKING OMBUDSMAN SCHEME OF RBI SHOULD BE RECTIFIED IMMEDIATELY IN THE INTEREST OF COMMON PEOPLE OF INDIA

 

THE SERIOUS FLAW IN BANKING OMBUDSMAN
SCHEME OF RBI SHOULD BE RECTIFIED
IMMEDIATELY IN THE INTEREST OF
COMMON PEOPLE OF INDIA

 

The Reserve Bank of India (RBI), which is the India’s Central Bank as well as the Regulator for the Banks in India, has formulated the Banking Ombudsman Scheme, 2006 ( amended up to July 01, 2017 ) in exercise of the power conferred on it under the Section 35A of the Banking Regulation Act, 1949.

The objective and purpose of the said Banking Ombudsman Scheme is to provide a grievance redressal mechanism and complaint resolution platform to the Common People ( Citizens ) of India who are Banking Customers/Consumers of the Banking Industry of India.

The Banking Ombudsman Scheme of RBI has two tiers of Complaint Resolution Platform such as :

a)   Banking Ombudsman – First Tier ( Base Tier ) of Complaint Resolution at RBI

b)    Appellate Authority – Second Tier -who can hear an appeal against the Order of the Banking Ombudsman if preferred by an Aggrieved Banking Customer/Consumer.

 

The Banking Ombudsman ( Appointed by RBI ) :

The Banking Ombudsman is primarily an Officer of RBI (under employment of RBI) who is placed in an assigned Office of the Banking Ombudsman under the aforesaid Banking Ombudsman Scheme to discharge the functions of the Complaint Resolution functions as the First Tier (Base Tier) of Complaint Resolution within RBI, as the Regulator of the Banks and Banking Industry of India. The Banking Ombudsman Scheme, 2006 ( amended up to July 01, 2017 ) which is available in the Website of RBI in public domain, in its Annex-I, shows all the Banking Ombudsmen thus appointed and placed with their Office Addresses and Contact Details throughout India in several locations with their Geographical-Territorial Jurisdictions inside India.

 The Appellate Authority within RBI :

Under the Clause: 14 of the Banking Ombudsman Scheme, a Deputy Governor of RBI, normally and usually  the Deputy Governor in Charge of the Consumer Education and Protection Department (CEPD) of RBI is appointed and designated as the Appellate Authority under the aforesaid Banking Ombudsman Scheme.


The Serious Flaw in the Banking Ombudsman Scheme and how it could affect the Common People; the Banking Customers/Consumers :

Under certain Clauses of the Banking Ombudsman Scheme, particularly under its Clause-13 and Clause-9 ; the Banking Ombudsman is allowed to reject the complaint and make its Order on the Complaint of a Common Banking Customer/Consumer Non-Appealable within RBI. That means, the Order of the Banking Ombudsman thus made Non-Appealable within RBI, can not be appealed by an Aggrieved Common Banking Customer/Consumer ( who would be, not-satisfied or aggrieved by the Banking Ombudsman Order) before the Appellate Authority ( the Dy. Governor of RBI  designated as the Appellate Authority ). The Aggrieved Banking Customer/Consumer, thus would be further forced to approach a CIVIL COURT WHICH PREFERABLY WOULD BE A HIGH COURT in case he/she would like to redress his/her grievance against such order (non-appealable within RBI ) and this process of approaching a High Court would be not only Costly but also cumbersome and lot of time taking. Therefore, most likely the genuine small amount complaints of Common Banking Customers/Consumers will thus meet natural end (death) without coming to the surface and without getting resolved and the common people in such cases have to suffer silently.

This is the SERIOUS FLAW AND THE MOST DANGEROUS FLAW in the Banking Ombudsman Scheme, 2006 ( amended up to July 01, 2017 ) where in the Banking Ombudsman is allowed to make, THE BANKING OMBUDSMAN’S OWN ORDER AS NON-APPEALABLE WITHIN RBI while a Deputy Governor is very much available and sitting within the RBI, duly appointed and designated as the Appellate Authority under the same Banking Ombudsman Scheme.

It is quite strange, surprising and flawed that; under the said Banking Ombudsman Scheme, while an Appellate Authority ( in this case the designated Deputy Governor ) is very much available within the same Regulatory Institution ( in this case the RBI ), the Banking Ombudsman ( the first level complaint handling tier ) is allowed to make its own-order non-appealable before the Appellate Authority ( the Second Complaint handling tier ). This kind of situation is not observed anywhere in the World, even in the worst administrative or complaint handling systems. Where ever, there is an Appellate Authority (the Second Tier of Complaint Resolution) available within the same institution ( like RBI), all orders of the First Tier of Complaint Resolution become Appealable before the Appellate Authority of the concerned Institution.

Even in the Courts and Judicial System, all orders of a lower court (lower judicial forum) will be appealable before a higher court (higher judicial forum). Even the orders/judgments of the Supreme Courts of the Nations are subject to appeal before the International Court of Justice.

To evidence in this case, I am mentioning without hesitation that, I had genuine grievances against ICICI Bank ( a private Bank in India ) for violation of Banking Code of Conduct, Violation of RBI-Guidelines and Regulatory-Instructions of RBI, Over-Charging and Wrong-Charging of Interest (to the tune of 35% as 10+% normal interest and over that additional penal interest of 24% charged to home loan during a moratorium announced by RBI during the demonetization and also agreed with the said bank) and wrong debit to Banking Account in the name of false credit card dues, where as four of my complaints to the Banking Ombudsman in 3-years from 2018 to 2021 were continuously rejected by the concerned Banking Ombudsman making its orders as Non-Appealable within RBI. Therefore, I had no choice but to issue appropriate legal notices both to the Governor of RBI as well as the concerned Deputy Governor (CEPD) of RBI for compliance and rectification of the above-explained flaw in the Banking Ombudsman Scheme, 2006 (amended up to July 01, 2017).

The Readers may also kindly consider, under any circumstances, being motivated by any Connivance or Collusion with any Bank Officer/Staff, under ulterior motives and even under corruptible practices, any Banking Ombudsman can exploit and misuse the facility of making his own-order Non-Appealable within RBI to avoid scrutinization by the Appellate Authority and with the intention of pushing the Common Banking Customer/Consumer to a Civil Court /High Court knowing the fact that it may be very difficult for a common banking customer/consumer to approach a Civil Court/High Court further for a small amount of genuine complaint and thus the Common Banking Customer/Consumer will suffer silently with the genuine grievance unresolved. Also it may be imagined, in Indian situation, how many Banking Customers/Consumers among the common people of India can afford to further approach a Civil Court or High Court to redress their genuine grievances of Banking ?

Therefore, in the interest of Justice, Fair and Equity and in the interest of Natural Justice, the Reserve Bank of India (RBI), the Regulator of the Banks and Banking Industry of India, should Rectify the Banking Ombudsman Scheme, 2006 (amended up to July 01, 2017 ) with Proper Orders and Notifications so as to Not-Allow the Banking Ombudsman to make its own-order Non-Appealable within the RBI and to make All Orders of the Banking Ombudsman Appealable within the RBI with immediate effect, in the interest of the Common People of India, this is a matter of National Interest for India.


About the Author : Dr. Nimain Charan  Biswal is a B.Sc.(Agri. Science and Technology), M.B.A. and Ph.D.(Management Area ) by qualifications and he has 35+ years of work experience in both  industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). Dr.Biswal is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organisations in Senior/Top Management Capacities. He is a management expert covering extensive areas from management in agriculture, industrial management, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.

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