What is the Banking Ombudsman Scheme ?

The Banking Ombudsman Scheme is a speedy and low-cost means for bank clients for solving their complaints about the services provided by banks. The Banking Ombudsman Scheme has introduced RBI in the year 1995.

The Banking Ombudsman Scheme was set up in the year 2006 and was amended in July 2017 that is now in operation.

Banking Ombudsman ?

A Banking Ombudsman is a higher ranked Bank executive chosen by RBI to settle customer complaints inadequate in the banking services. The Banking Ombudsmen are positioned in state capitals. All Banking institutions are covered under the Scheme.

What are the Grounds for Complaints ?

The Banking Ombudsman receives complaints from the public on the following absence in banking services:

  • Delay in the payment of cheques etc.
  • Refusing to accept smaller denomination notes and coins
  • Delay in making inward payment
  • Delay in issue of demand drafts
  • Not following bank working hours
  • Failure to provide any banking facility
  • Delay or non-payment of deposit
  • Not following Reserve Bank directives concerning the rate of interest payable by the bank;
  • Delay in attending to the NRI accounts concerning the remittances from abroad
  • Refusing to open deposit accounts
  • Charging fees without advance notice
  • Not following the Reserve Bank directives on Debit or credit cards
  • Disregarding Reserve Bank instructions concerning digital Banking services
  • Delay in the payment of pension
  • Refusal to accept payment of taxes
  • Forced closure of deposit accounts without giving advance intimation to the customer
  • Deficiency in service concerning loans and advances

Where has the First Complaint to be Filed ?

Initially, the complaint has to be filed with the bank, where the account is in operation. If the customer is not satisfied with the reply given by the bank, or if the response is not received from the bank within one month, he can file a complaint with the Banking Ombudsman scheme.

When will the Ombudsman not Consider the Complaint ?

  1. a) If the customer has not approached his bank branch first for addressing his grievance.
  2. b) If the complaint is made after a lapse of one year from the date of receipt of the reply of the bank.
  3. c) If the complaint has been handed over to the court of law, consumer court etc.
  4. d) If the complaint is for fun

Filing of the Complaint with the Banking Ombudsman

The complaint has to file at the office of the Banking Ombudsman scheme under whose control, the bank is functions.  The complaint can be given by writing on plain paper or by sending an email to the Banking Ombudsman.   However, there are no fees to be paid for filing the complaint.


The compensation amount, if any, to be paid by the bank to the person who has complained about any loss suffered is a maximum of ₹ 20 lakhs or whichever is lower.

Compensation Towards Mental Agony

In the Banking Ombudsman scheme may grant a compensation limited to ₹ one lakh to the person who has complained towards harassment and mental agony after considering the expenses incurred by the complainant, the time spent, and mental suffering undergone by the complainant.

Details Required at the Time of Complaining

  • Name and address of the complainant,
  • Name and address of the branch or office of the bank against which the complaint is made,
  • Facts giving rise to the complaint supported by documents, if any,
  • Nature and extent of the loss caused to the complainant,
  • Relief sought from the Banking Ombudsman scheme and
  • Declaration about the compliance with conditions, in line with the Banking Ombudsman Scheme.

Action on the Complaint by the Banking Ombudsman

The Banking Ombudsman scheme makes an effort to support, through discussions or negotiation, a settlement between the complainant and the said bank. If the complainant accepts the payment, then the Banking Ombudsman will issue an order that becomes compulsory on the bank and the complainant to follow.

Rejection of a Complaint by the Banking Ombudsman

The Banking Ombudsman scheme may decline a complaint if the complaint is:

  • Not genuine
  • Compensation asked from the Banking Ombudsman is more than ₹ 20 lakh
  • Documents and evidence are not suitable for settlement of the complaint
  • If the Banking Ombudsman believes that there is no loss or damage to the complainant.

Unsettled Complaint

If an agreement within one month does not settle a complaint, the Banking Ombudsman proceeds to decide the compensation.

The Banking Ombudsman scheme gives enough chance to both the complainant and the bank, to present their case before deciding the compensation. The complainant has the option to accept the compensation or to reject it.

Alternative Action to the Banking Ombudsman’s Decision

Any person unhappy with the compensation given by the Banking Ombudsman scheme can approach the Appellate Authority who the Deputy Governor of the RBI authorizes. Similarly, the bank also can file an appeal before the Appellate Authority under the Scheme.

The Time Limit For Filing an Appeal

One has to file the appeal against the decision of the Banking Ombudsman scheme within 30 days of the date of receipt of the compensation.

Action by the appellate authority handling the appeal

The appellate authority may:

  • May reconsider the appeal; or
  • Modify the compensation, or pass any other order as it may consider fit, or
  • send the claim back to the Banking Ombudsman for fresh consideration, or
  • Reject the appeal.


The Banking Ombudsman scheme has settled about 72% of the complaints through mutual agreement and issued awards in 68 cases during 2019-20, as made known by a report from the Reserve Bank of India.

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