Reserve Bank of India- credit card complaint

CONSUMER NOTES
Helping tackle complaints against banks
S PUSHPAVANAM

The word ‘ombudsman’ means a ‘grievance man’, a public official who is appointed to investigate complaints and intervene for the ordinary citizen in his dealings with public bodies. The Scandinavians were the first to innovate the concept of an ombudsman. But it was the British who first established the Banking Ombudsman (BO) in 1986, covering private sector business. The Reserve Bank of India (RBI) introduced BO in 1995. As expectation grew, the scheme was amended in 2002 and again in 2006 and credit cards were included in the scheme.
All commercial banks, including rural and primary cooperative banks, come under this ombudsman. He is appointed by the RBI which fully funds this scheme. He can be work from anywhere in the state although his office is in Chennai. There are 15 such BOs in India.
You can complain directly or through an authorised representative, like a consumer organisation, either online, by e-mail (bochennai@rbi.org.in) or in writing against the deficiency, failure or delay to provide the promised banking facilities services. The new grounds added include credit card issues, non-adherence to fair practices code and levying of excessive charges without prior notice. But one must give the bank a month to solve the dispute and, within a year, approach the BO. The ombudsman will send a copy of the complaint to the bank concerned and attempt conciliation. If it fails, the ombudsman will give its award or reject the complaint.
The ombudsman may order compensation for the loss suffered by the complainant as a direct consequence of the commission or omission of the bank or may give a direction to the bank. It will not exceed Rs 10 lakhs.
If it is a credit card complaint, the ombudsman can take into account the loss of complainant’s time, expenses incurred by the complainant and also the financial loss, harassment and mental anguish suffered by the complainant while giving the compensation. The Appellate Authority for BO is the Deputy Governor of RBI.
The consumer may state in plain paper or in the form downloaded from www.rbi.org, the name and address of the bank or branch, his own name and address, then state the grievance in detail with supporting documents, if any, of the nature and extent of loss and specifying the relief he seeks.
After the amendment in 2006, the complaints increased four-fold. In 2006-07, BO all over the country has received nearly 40,000 complaints and the Chennai BO, 2387. The online submission and inclusion of credit cards have boosted the figure.
In one case, for damaging a card holder’s reputation by wrongly classifying him as a defaulter, the BO directed the
credit card issuer to pay Rs 25, 000 as compensation for the inconvenience, mental agony and loss of prestige caused by their error in reporting. The BO should look at complaints as feedback and not as workload.
In the UK, the financial services ombudsman has replaced the BO, covering mortgage endowments, insurance, and other financial services in 1999. Out of over six lakh queries received over phone, mail and in writing, one-sixth became cases and 94% of them were settled informally. For compensations including repayment of deposits, there is a separate scheme.
The BO is inexpensive and an expeditious mechanism compared to consumer fora. If non-banking finance companies are also covered, as in the UK, it would offer better protection to unwary consumers.

Source : Times Of India - 03.10.2008
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