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Want to be a troubleshooter?

If you know general banking by heart and are good at solving bank customers’ problems, then you’re going to make a good Banking Ombudsman, says Pranab Ghosh.

education Updated: Jun 02, 2010 09:45 IST
Pranab Ghosh

Case I: After the implementation of the Sixth Pay Commission, many pensioners who draw their pension from banks did not get their arrears in time. The matter was sorted out after the intervention of the Banking Ombudsman. Not only did the pensioners get the arrears, the banks also paid them two per cent compensation over and above the applicable interest for the period delayed.

Case II: There have been cases in which customers did not get money out of ATM machines but found the amount had been debited from their accounts. On receipt of complaints a Banking Ombudsman looked into the documents, and as per his instructions the banks reversed the transactions. A compensation of Rs 100 per day was also paid for the period that lapsed before the account was set in order.

The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. The word ‘Ombudsman’ in general means a public official appointed to investigate citizens’ complaints against the administration. “He is to intervene for the ordinary citizen in his dealings with the complex machinery of the establishment,” says H Kulshrestha, chief general manager and Banking Ombudsman (New Delhi).

“In India any person whose grievance against a bank is not resolved to his satisfaction by the bank within one month, can approach the Banking Ombudsman, if his/her complaint pertains to any of the matters specified in the Banking Ombudsman Scheme 2006.”

The scheme envisages expeditious and satisfactory disposal of customer complaints in a time-bound manner. The Banking Ombuds- man on receipt of the complaint works to promote a settlement of the complaint by agreement between the complainant and the bank through conciliation or mediation. “ The Banking Ombud- sman is a quasi-judicial authority,” says Kulshrestha. If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint he may pass an award after granting the parties reasonable opportunity to present their case. “He will be guided by the evidence placed before him by the parties, the principles of banking law and practice, directions, instructions and guidelines issued by the Reserve Bank of India from time to time and such other factors, which in his opinion are necessary in the interest of justice,” elaborates Kulshrestha.

The Banking Ombudsman can award a compensation for the actual loss suffered by the complainant as a direct consequence of the act of omission or commission by the bank or Rs 10 lakh, whichever is lower. And in case of complaints arising out of credit card operations, he can award compensation not exceeding Rs one lakh to the complainant.

The popularity of the scheme has grown over the years. While, in 2005 the Banking Ombudsman, New Delhi, which covers Delhi NCR, J&K and Haryana (excepting Panchkula, Yamunanagar and Ambala districts), received only 800 customer complaints, the number is expected to cross 13,000 this year.

And the scheme, according to P Shimrah, secretary, Banking Ombudsman, New Delhi, has benefited the banking sector a lot. Agrees Kulshrestha. “In many of the cases, but for the Banking Ombudsman, the complainants would have gone to a consumer forum or other courts of law,” he points out.

What's it about?
The Banking Ombudsman Scheme outlines the grievance redressal mechanism for complaints against deficiencies in services of banks. The RBI, with effect from 1995, introduced the scheme under Section 35A of the Banking Regulation Act, 1949. It covers scheduled commercial banks, RRBs and scheduled primary co-operative banks in the country. The scheme was amended in 2002 and then in 2006. It is essentially an inexpensive and expeditious mechanism to resolve disputes. It ensures that bank customers are treated fairly.

Clock Work
10 am: Reach office
11 am: Check e-mail
12 o’clock: Scrutinise complaints received from customers, send reply to banks and take decisions.
2 pm onwards: Attend the conciliation meetings to mediate between the complainant and the bank to reach a solution. There are, generally eight such meetings fixed for the day. However, all of them may not actually take place. The meetings could also begin before 2 pm
4 pm: Go for bank inspection
6 pm: Call it a day

The Payoff
. A Banking Ombudsman operating in major metros like Delhi and Mumbai should be in the rank of a chief general manager (CGM), RBI. In smaller centers like Guwahati and Jaipur he should be in the rank of a senior general manager (SGM), RBI. And they draw same salary as other CGMs and Senior GMs of the central bank.
. On average a CGM gets around Rs 88,000 + perks. The existing pay scale would be revised soon.

Skills
.
Good knowledge of general banking
. Good knowledge of matters related to foreign exchange
. Good supervisory knowledge like conducting inspection of a bank branch
. Good listening skills
. Ability to handle disputes

How do I get there?
You need to be either a CGM or a SGM of the Reserve Bank of India (RBI) to become a Banking Ombudsman. The RBI Services Board recruits officers who can, with experience, rise to the position of a Banking Ombudsman. The minimum qualification for selection as an officer in grade ‘b’ is graduation with a minimum of 60 per cent marks or an equivalent grade. You will have to qualify a three-tier examination to become an officer. Phase I, comprising of objective type questions, and Phase II, comprising of descriptive type questions, of the exam are written tests, which are to be followed by an interview.

Institutes & urls
There is no institute that trains you to become a Banking Ombudsman. However, to crack the recruitment test, meant for an officer, you can enroll with an institute imparting coaching for competitive examinations, albeit after carefully examining their faculty strength and success rate.

Pros & cons


.

One is satisfied solving problems faced by a common man, who could be a senior citizen/a pensioner/a widower/ a defence personnel/a farmer


.

Satisfaction derived from implementing fair practices in keeping with the banking laws


.

One is satisfied working as an independent authority


.

One can feel handicapped at times because the scheme does not provide one the opportunity to embark on a detailed investigation, as a case of forgery may warrant


.

One can feel pressured as there are tight deadlines for decision-making


Only RBI appoints Banking Ombudsman

A senior practitioner gives a ringside view of the profession

Please trace the evolution of the Banking Ombudsman Scheme in India?
The Banking Ombudsman Scheme was introduced in 1995 under Section 35A of Banking Regulation Act, 1949 and covers scheduled commercial banks, RRBs and scheduled primary co-operative banks in the country. The scheme was amended in 2002 and then in 2006. The present scheme, amended in 2006, is significant because instead of appointing retired eminent persons holding high offices in government/ banks, etc., it was decided to appoint in-service chief general managers/senior general managers of the Reserve Bank of India. The 2006 amendment also envisaged that the staff of the Banking Ombudsman office would be from the Reserve Bank only and not from commercial banks.

Are there adequate numbers of skilled Banking Ombudsmen in the country today?
There are 15 Banking Ombudsmen in the country and the number, as of now, appears to be adequate.

Does every bank have a Banking Ombudsman? Who appoints a Banking Ombudsman?
As already mentioned, Banking Ombudsmen are appointed by the top management of the Reserve Bank. Individual banks do not have a Banking Ombudsman.

Who are the leading employers (of a Banking Ombudsman) - in India and globally? Are they appointed anywhere other than the banking sector?
In India, the Reserve Bank is the only employer of a Banking Ombudsman. In many countries, they are even independent of the Central Bank of that country and are also entrusted with disputes related to insurance. In India, other than a Banking Ombudsman, we have separate Ombudsmen for Insurance, Income Tax and even electricity disputes.

H Kulshrestha, chief general manager and Banking Ombudsman Interviewed by Pranab Ghosh