Banking Ombudsman in Banking

The Banking Ombudsman is an independent authority set up by the Reserve Bank of India (RBI) to resolve customer complaints against banks. The Banking Ombudsman Scheme was introduced in 1995 to provide a quick and inexpensive mechanism for resolving customer complaints.

The Banking Ombudsman can be approached by any customer of a bank who has a complaint against the bank. The complaint can be about any matter related to the bank’s services, such as:

  • Non-payment of money
  • Wrongful debit of money
  • Unfair or discriminatory treatment
  • Deficiency in service

The Banking Ombudsman can award a maximum compensation of ₹ 1 lakh to the customer. The decision of the Banking Ombudsman is binding on the bank.

Multiple Choice Questions

  1. Which of the following is not a function of the Banking Ombudsman?
    • To resolve customer complaints against banks
    • To award compensation to customers
    • To inspect banks
    • To recommend disciplinary action against bank officials
    • To promote customer awareness
    • The answer is To inspect banks. The Banking Ombudsman does not have the power to inspect banks. This power is vested with the RBI.
  2. Which of the following is the most important function of the Banking Ombudsman?
    • To resolve customer complaints against banks
    • To award compensation to customers
    • To inspect banks
    • To recommend disciplinary action against bank officials
    • To promote customer awareness
    • The answer is To resolve customer complaints against banks. This is the primary function of the Banking Ombudsman.
  3. What is the maximum compensation that the Banking Ombudsman can award to a customer?
    • ₹ 10,000
    • ₹ 50,000
    • ₹ 1 lakh
    • ₹ 2 lakh
    • There is no maximum limit
    • The answer is ₹ 1 lakh. The Banking Ombudsman can award a maximum compensation of ₹ 1 lakh to the customer.

Conclusion

The Banking Ombudsman is a valuable resource for customers who have complaints against banks. The Ombudsman provides a quick and inexpensive way to resolve customer complaints. By approaching the Banking Ombudsman, customers can get their grievances addressed fairly and expeditiously.