Banks for the first time have been made accountable for misselling third-party products like insurance policies or mutual fund schemes. Customers can also file complaints against banks for problems with mobile and digital banking services.
Following a recent amendment, the pecuniary jurisdiction of the ombudsman to pass an award has been doubled from Rs 10 lakh to Rs 20 lakh. The ombudsman has been empowered to award compensation not exceeding Rs 1 lakh for loss of time, expenses incurred and also harassment and mental anguish suffered by the complainant. There is also an option for customers to go in for appeal in respects to closed complaints which was not available earlier.
Until now, if the buyer of an insurance policy or mutual fund was miss old s/he had to seek redressal from the insurance company or the mutual fund. This was a departure from global practices. For instance, last year in UK four of the biggest banks, Barclays, HSBC, Lloyds and RBS, faced large fines for misselling payment protection insurance.
There are 20 Banking Ombudsman in India, each with a territorial jurisdiction. Aggrieved customers can lodge their complaints with the ombudsman either through an email or a post.
However, before filing a complaint with the Banking ombudsman the customer has to approach the grievance redressal department of the bank and wait 30 days for a response.
