Discuss salient features of the 'Banking Ombudsman Scheme'. On what grounds can a customer lodge a complaint of deficiency in service with respect to loans and advances to the Office of Banking Ombudsman?

The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. This service is available for complaints against a bank's deficiency of service. A bank's customer can submit complaint against the deficiency in the service of the bank's branch and the bank as applicable, and if he does not receive a satisfactory response from the bank, he can approach Banking Ombudsman for further action. Banking Ombudsman is appointed by RBI under Banking Ombudsman Scheme, 2006. RBI as per Section 35A of the Banking Regulation Act, 1949 introduced the Banking Ombudsman Scheme with effect from 1995. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme. As regards loans and advances, a customer can also lodge a complaint on the following grounds of deficiency in service with respect to loans and advances:- Non-observance of Reserve Bank Directives on interest rates; delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan applications; Non-acceptance of application for loans without furnishing valid reasons to the applicant; non-adherence to the provisions of the fair practices code for lenders as adopted by the bank or Code of Bank's Commitment to Customers, as the case may be. Example: Mr X deposited a bank draft in his account but it was not credited to his account. After several reminder and communication to bank authorities at different level the problem was not sorted out. He decided to take shelter of judiciary but a bank manager advised him to contact the Ombudsman of banking. He did so with all documents. Within 10 days a decision was taken and he was paid the principal with 3 months interest.