Making Banking Ombudsman A Party In Your Complaint Before A Consumer Forum

It is entirely possible that your genuine complaint of deficiency in service by a bank in India is rejected by a Banking Ombudsman. It is also possible that a Banking Ombudsman in India may illegally reject your citing a clause of the Banking Ombudsman Scheme that does not permit an appeal against the Banking Ombudsman's decision. It is also possible that your genuine complaint against a bank in India may not even be accepted by a Banking Ombudsman. Such times will be difficult for you. As per the Banking Ombudsman Scheme, if your complaint is pending before a Consumer Forum or a Consumer Forum has already given a decision on your complaint against a bank in India, you are not allowed to take such a complaint to a Banking Ombudsman. The reverse, however, is not true. That is, if your complaint has been rejected or not entertained by a Banking Ombudsman you are fully within your legal rights to take that complaint to a Consumer Forum constituted under the Consumer Protection Act, 1986. And when you do so, in case you are wondering, you must include the Banking Ombudsman as one of the respondents in the complaint. In other words, you must make the Banking Ombudsman a party to your complaint before the Consumer Forum. And why so, please continue to read...


The Consumer Protection Act, 1986 does not prohibit a bank customer from including the Banking Ombudsman as a respondent in the complaint. However, whenever a complainant before a Consumer Forum includes the Banking Ombudsman as a respondent, the Reserve Bank of India objects to their inclusion in the case mainly with two arguments - "The Banking Ombudsman is a quasi judicial body and that the complainant is not a customer of Reserve Bank of India." The second argument of Reserve Bank of India that the complainant is not a customer of Reserve Bank of India is technically correct but the first argument that "Banking Ombudsman is a quasi judicial body" is blatantly false.

In practice, Banking Ombudsman in India merely functions as a department under the control and supervision of Consumer Education and Protection Department which is a Central Office department of Reserve Bank of India functioning from Mumbai. A Banking Ombudsman is an officer in the regular service of Reserve Bank of India and can be transferred to or out of the office of Banking Ombudsman at any given time. On paper, a Banking Ombudsman is supposed to decide on the customer complaints keeping the provisions of the Banking Ombudsman Scheme in view. However, the reality is very different. As we have seen from the example of "Illegal Denial of Appeals Against Decisions of Banking Ombudsman", a Chief General Manager of Consumer Education and Protection Department can issue instructions to all offices of Banking Ombudsman in India to give decisions in a way contrary to the provisions of the Banking Ombudsman Scheme. Even such illegal instructions of the Central Office department are followed by the Banking Ombudsman. In reality, the annual performance appraisal and subsequent promotions within Reserve Bank of India are entirely in the hands of the Chief General Manager of the Consumer Education and Protection Department. And hence, a Banking Ombudsman never functions independently. In such circumstances, an office of Banking Ombudsman can never be given the status of a quasi judicial body.

Whenever, Reserve Bank of India claims that the Banking Ombudsman should be exempted from the process of a complaint before a Consumer Forum, the instructions given to all the offices of Banking Ombudsman in India by the Chief General Manager of the Consumer Education and Protection Department as published in my article "Illegal Denial of Appeals Against Decisions of Banking Ombudsman" may be presented before the Consumer Forum by the complainant to prove that the Banking Ombudsman is not a quasi judicial body. These instructions clearly instructed all offices of Banking Ombudsman to ignore the provisions of the Banking Ombudsman Scheme and rather give decisions contrary to the Scheme.    

Why Make Banking Ombudsman A Party?

Banking Ombudsman is a public authority in the sense that all the officials working in an office of a Banking Ombudsman including the Banking Ombudsman himself are paid salaries from the tax payer's money. The system of Banking Ombudsman is integral to the banking system in India and all the banks list the Banking Ombudsman as an authority before whom the unresolved complaints can be presented. Hence, for all practical purposes, a Banking Ombudsman is a part and parcel of the banking system and not detached from it. Being a public authority appointed to resolve the complaints of bank customers in India, the Banking Ombudsman cannot avoid taking responsibility for unresolved complaints. In this restricted sense, the bank customer is also a customer of the Banking Ombudsman which is a public authority funded by the tax payer. In short, when you know you are right and your bank is guilty of deficiency in service and still the Banking Ombudsman decided in favour of the bank, why not make the Banking Ombudsman answer to a Consumer Forum?