You Can Legally Appeal Against Banking Ombudsman's Decision Rejecting Your Complaint

In this page you will read about your right to appeal against a decision of Banking Ombudsman and also about how your right to appeal is being illegally taken away. Please read the article in full. The Banking Ombudsman Scheme 2006 (updated in July 2017 and currently valid) allows you to appeal against a decision rejecting your complaint under some provisions of the clause 13 of the scheme. Let us first see what clause 13 (rejection of complaints) has to say:

"The Banking Ombudsman may reject a complaint at any stage if it appears to him that the complaint made is;


(1) The Banking Ombudsman may reject a complaint at any stage if it appears to him that the complaint made is;

a. not on the grounds of complaint referred to in clause 8; or

b. otherwise not in accordance with Sub Clause (3) of clause 9; or

c. beyond the pecuniary jurisdiction of Banking Ombudsman prescribed under clause 12 (5) and 12 (6): or

d. requiring consideration of elaborate documentary and oral evidence and the proceedings   before   the   Banking   Ombudsman   are   not   appropriate for adjudication of such complaint; or

e. without any sufficient cause; or

f. that it is not pursued by the complainant with reasonable diligence; or

g. in  the  opinion  of  the  Banking  Ombudsman  there  is  no  loss  or  damage  or inconvenience caused to the complainant.

(2) The Banking Ombudsman, shall, if it appears at any stage of the proceedings that  the  complaint  pertains  to  the  same cause  of  action,  for  which  any proceedings before any court, tribunal or arbitrator or any other forum is pending or  a  decree  or  Award  or  order  has  been  passed  by  any  such  court, tribunal, arbitrator or forum, pass an order rejecting the complaint giving reasons thereof."

Now clause 14(1) that deals with appeals against the decisions of Banking Ombudsman has the following to say:

"...Party to the complaint aggrieved by an Award under Clause 12  or rejection of a complaint for the reasons referred to in sub clauses (d) to (g) of Clause 13, may within 30 days of the date of receipt of communication of Award or rejection of complaint, prefer an appeal before the Appellate Authority; ..."

As you can read above, bank customers are entitled to an appeal against rejection of their complaint by a Banking Ombudsman only and only if their complaint is rejected for the reasons referred to in sub-clauses (d), (e), (f), or (g) of clause 13. And this is where the catch is. You cannot appeal if your complaint is closed by the Banking Ombudsman by citing clause 13(a), 13(b), or 13(c) in the closure letter issued to you.

Why Banking Ombudsman Does Not Reject Your Complaints Citing Clauses Where Appeal Is Allowed? 

Starting 19th May, 2010 the then Chief General Manager of Customer Education and Protection Department (Customer Service Department) of Reserve Bank of India (the parent department of Banking Ombudsman offices) issued a series of personal emails to all the Banking Ombudsman offices specifically telling them to minimize closure of complaints citing clauses under which an appeal was possible. The legality of those personal emails was questionable because the instructions contained in the emails were contrary to the provisions of the official Banking Ombudsman Scheme 2006. See excerpts of those emails below:

Email Dated 18th January 2011

*Click on the image below to enlarge*

"As you are aware, even now, a large number of cases are being disposed under clause 13(d) and 13(f). the procedure presumably being followed is that if a case is decided after a bank has replied or in the conciliation meeting if the BO is satisfied with the bank's reply, then we note that cases are being disposed under the above clauses. It is expected that all the cases of 13(d) and 13(f) if they clearly fall under clause 8, then their disposal if there is no loss to the customer should be under 13(a) only. Prior to the introduction of appeal cases, it was common for closing a case under multiple clauses and such cases used to be disposed under 13(a) read along with 13(d) or 13(f).

We receive several appeals disputing the single statement that there is no loss or the word 'without sufficient cause' without reference to the other aspects of the case. This causes avoidable appeals, correspondence and complaints to the top management. BO is a summary scheme, and if a BO feels that there is no sufficient cause, and in his opinion no loss to the complainant, and if the case falls within clause 8 in unambiguous terms, then the disposal may be done under 13 (a) only. You may please appreciate, that hardly any case of 13(d) or 13(f) if appealed results in benefit to the customer, on the on the hand, the appellant seeks shelter under RTI and continues with his appeals, which are difficult to handle as whether a cause fully existed or not is a matter of opinion.

BOs are requested to take note of the above, and be circumspect when applying the closure clause."

What Is Wrong With This Email

This email contains, in the most brazen language, instructions to all the Banking Ombudsmen to totally disregard the legal provisions of the Banking Ombudsman Scheme, 2006 and reject complaints citing non-appealable clauses only.  This email clearly says that even if the complaint falls within clause 8 in unambiguous terms, then the disposal should be done under 13(a) only under which an appeal would not be possible. Legally speaking, a complaint that falls within clause 8 and is admitted by a Banking Ombudsman, cannot be rejected citing clause 13(a). The BOs were told not to act judiciously and rather act in such a manner so that the work load of appeals for the top management would be kept to the minimum. BOs were also instructed to be circumspect when applying the closure clause.

Other Personal Emails Sent By The Same Chief General Manager To BOs

Email Dated 19th May 2010

Among other things, this email directed Banking Ombudsman offices as under:

"Please minimize closure under 13-d as the complainants are deeply upset when informed that their complaint is without cause. Instead close it under 13-a if the BO is convinced that the bank has followed all the rules laid down in DBOD/Bank's internal circulars. For example, if the pricing is freed under DBOD guidelines, then if a Bank's board has approved a certain policy, and in the said transaction if the Board policy is adhered to, then there is no violation of DBOD guidelines and hence the disposal is under clause 13-a provided disclosure norms have been followed".

Email Dated 1st October 2010

"...If a case involves a customer disputing what he had signed in the agreement and which is as per the policy of the bank, such a case should be disposed off under 13 (a) and not 13 (d) or (f). Some BOs have stated that in their opinion the customer did not incur any loss, but this decision is reached only after the conclusion that the bank had met its part of the commitment as per the rules. In such a case, the disposal should be under 13(a) only. We are finding it difficult to justify to AA (Appellate Authority) several appeals being made by customers for disposal under 13(d) or (f) as in the opinion of the AA, the BO should be able to categorically tell as customer that the bank had met its commitment, in case there is a deficiency of service, the BO should be able to redress the grievance instead of creating an opening for the customer to knock at the doors of the AA for grievance redressal..."

Email Dated 6th October 2010

"We are receiving many appeals from customers whose cases have been disposed under 13(d).. without sufficient cause, and 13(f).. No loss or damage or inconvenience to the complainant. It is observed that in all these cases, BO after consideration has come to a decision that the bank was not at fault, in which case, the case should be disposed under 13(a) indicating the reason Viz., mention what is in the agreement, due notice was given etc., etc., Please hold a meeting of all the officers and inform them accordingly so that frivolous appeals are avoided..."

Email Dated 3rd December 2010

"We have discussed the issue of disposal under 13(a), 13(c), 13(d), 13(f) etc., at length in the various Regional BO conferences. However, we still find a large number of disposals done incorrectly. A number of appeals are received on disposals under 13(d) and 13(f) where invariably the BO argued that the bank had followed its internal procedures, rules and also RBI guidelines. However, as the customer has not incurred any loss, the disposal is being done under 13(d) and 13(f). You may well appreciate that no value addition is possible at Appellate level in such cases as all such cases should only be disposed under 13(a), and if the evidence is complicated or oral the disposal should be under 13(c). If the BO is in doubt about the bank having followed the guidelines then he has to give either a decision under 12 or conciliation under para 11. It is becoming increasingly difficult to convince the appellants that the BO had satisfied himself that the bank had followed all the rules..."

Email Dated 16th March 2011

"I have in the recent past sent a few updates on the importance of closing a case under the correct BOS clause. This month I noticed in all the appeals received by us that cases should have been closed under 13(a) were closed under 13(d) stating that the complainant did not have sufficient cause. In fact some of the appeals questioned the BO for feeling that they did not have sufficient cause. In all the cases, BO agreed with the bank as what the customer was disputing was present either in the letter of sanction or agreement, and was duly accepted by the complainant at the time of sanction of the facility. If the BO does not agree with the bank, an award should be given in favour of the customer. 13(d) clause is operated only when the BO is having doubt but is unable to favour the customer as he is not convinced that a sufficient cause exists for the complainant. There is little possibility of the BO decision to be overturned by AA when a bank produces all the relevant papers in support of its argument and also when BO agrees with it. Appeals of this nature indicate that while the logic in the case papers is good, the closure of the case has been done in a routine manner giving rise to unnecessary appeals..."

Were These Emails Followed By The Banking Ombudsmen

Most certainly. You need to know that the annual performance appraisal (for promotion, etc.) of each and every Banking Ombudsman is in the hands of the Chief General Manager of Customer Education and Protection Department (Customer Service Department) of Reserve Bank of India. These emails are still being followed by all the BO offices in India.

What To Do If You Are A Victim Of These Emails

If you feel that your legal right to appeal against the decision of a Banking Ombudsman has been denied by Reserve Bank of India, you may submit a complaint enclosing copies of all the papers to:

The Governor
Reserve Bank of India
Shahid Bhagat Singh Marg
Fort, Mumbai - 400 001

Make sure to send your complaint via Speed Post or Registered Post only and 30 days after sending your complaint, send an application under RTI Act seeking to know what action has been taken on your complaint. You may read more details on this topic: How to file appeals against decisions / Awards of Banking Ombudsman and How To Get Justice From Banking Ombudsman In India