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banking system seminar report
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Introduction
In the present banking system, excellence in customer service is the most important tool for sustained business growth. Customer complaints are part of the business life of any corporate entity. This is more so for banks because they are service organizations. Over a period of time, the number of complaints against banks with regard to deficiency of their services has been in spite of several efforts taken by the banks on the advice of the Reserve Bank of India.
Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme has been introduced under Section 35A of the Banking Regulation Act, 1949 by the Reserve Bank of India with effect from 1995
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme and the Banking Ombudsman can receive and consider any complaint relating to deficiency in banking services. One can file a complaint before the Banking Ombudsman if a reply is not received from the bank within a period of one month after the bank concerned has received one's representation, or the bank rejects the complaint, or if the complainant is not satisfied with the reply given by the bank.
CHARACTERISTICS OF BANKING OMBUDSMAN
The Banking Ombudsman is a quasi judicial authority. It has power to summon both the parties -bank and its customer, to facilitate resolution of complaint through mediation.
All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
The Banking Ombudsman has power to consider complaints from Non-Resident Indians having accounts in India in relation to their remittances from abroad, deposits and other bank-related matters.
The Banking Ombudsman does not charge any fee for resolving customers’ complaints. Complaint can be made before a Banking Ombudsman on the same subject matter for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or award or a final order, has already been passed by any such competent court, tribunal, arbitrator or forum
Need for the study
In the present scenario of competitive banking, excellence in customer service is the most important tool for sustained business growth. Customer service has been the challenging job in the banking industry, specifically, after the financial sector reforms and implementation of new age technology. Providing prompt and efficient service is on the top agenda of commercial banks to attract and retain the new customers. Making banks more customer-friendly has also been high on the agenda of the Reserve Bank of India. It is the result of RBI’s initiatives that today all commercial banks have their own grievance redressal cells to handle the grievances of their customers. However, sometimes, customers’ complaints are not handled properly by banks, which may result in dissatisfaction to the customers. At this point of time customer is in a dilemma about where to file a complaint against the deficiency in services rendered by the banks. Courts may not be the right choice because of long time involved in settling of cases and heavy costs. Here, Reserve Bank of India has provided an alternative mechanism to handle the customers’ grievances by setting up of Bank Ombudsman in India. Keeping in mind these two important aspects of Bank Ombudsman the present study has been designed i) to study the mechanism and operations of Bank Ombudsman in India and ii) to evaluate the performance of bank ombudsman
Research Methodology
The present study is based on secondary data. The secondary data were collected from articles, previous studies, committee reports, Indian Banks Association Bulletin (IBI) bulletins, RBI India website and from data relating to the banks. The present study is confined to three years i.e., from 2007-2008, 2008-2009 and 2009-2010.
Tools applied for Data Analysis
Trend Analysis is used to find out the increase/decrease from the previous year Karl Pearson’s co-efficient of Correlation is used to find out the relationship between the number of complaints handled and number of cases disposed in scheduled commercial banks on the whole and particularly at AXIS Bank
BANKING OMBUDSMAN SCHEME
The institution of banking offers opportunity for investors and channelizes the resources available for the growth and sustenance of trade, commerce and industry, and, hence, an efficient banking system is necessary for the growth of the national economy. It is necessary that in such a system checks and balances be introduced to reduce inefficiency and maladministration. Moreover, the quality of the service of the banks depends upon the service provided to the customers and same determines the reputation and growth of the bank. Banking being public utility services and in view of the deteriorating services rendered to the public and also having regard to the fact that services so rendered by banks in irresponsible manner, which are not only inefficient but deficient in character and in the said stress and strain, the public/customer is put pillar to post without having any remedy, it felt necessary to have a separate for a to receive and resolve such grievances. Of course, the Consumer Protection Act, 1986 or courts, has taken care of it but as of now consumer forum is hard pressed with the alarming rise in number of cases
APPOINTMENT AND TENURE OF BANK OMBUDSMAN
Under the 2006 Scheme, it is stipulated that the RBI may appoint one or more officers in the rank of Chief General Manager or Manager to be known as Banking Ombudsman to carry out the functions entrusted to them by or under the scheme. This appointment is made for the period not exceeding three years. For effective implementation of this scheme Reserve Bank of India has set up fifteen Bank ombudsman offices across the country.
PROCEDURE OF FILING COMPLAINT
1. Any person who has a grievance against a bank relating to the banking services as enumerated under Clause 12 of the Scheme, may himself or through his authorized representative make a complaint to the Banking Ombudsman within whose jurisdiction the branch or office of the bank complained against is located.
2. The complaint shall be in writing duly signed by the complainant or his authorised representative (other than an advocate) in a form specified in Annexure-A of the Scheme and shall state clearly the name and address of the complainant, the name and address of the branch or office of the bank against which the complaint is made, the facts giving rise to the complaint supported by documents, if any, that are desired to be
REJECTION OF COMPLAINT
The Banking Ombudsman may reject a complaint at any stage if it appears to him that a complaint made to him is: i) frivolous, vexatious, mala fide or without any sufficient cause or ii) that it is not pursued by the complainant with reasonable diligence or iii) in the opinion of Banking Ombudsman there is no loss or damage or inconvenience caused to the complainant or iv) beyond the pecuniary jurisdiction of Banking Ombudsman or v) in the opinion of the Banking
Ombudsman the complicated nature of the complaint requires consideration of elaborate documentary and oral evidence and the proceedings before him are not appropriate for adjudication of such complaint
CASE STUDIES IN BANKING COMPLAINTS AND REDRESSAL
The AGM, State Bank of India, Pondicherry & Ors V/s N.Ganesan The complainant’s son remitted an amount on 5.04.1997 from abroad to be credited to his NRI account with appellant bank. The remittance was not confirmed till 22.04. 1997. Appellant bank pleaded that non- confirmation was due to failure of computers. The issue is whether this belay on the part of the bank amounted to deficiency in service. The Commission in appeal observed that bank officials could have verified vouchers and cheques received by post or confirmation and could have given correct reply within a reasonable time. It was held that failure of the bank to confirm remittance received from outside country within a reasonable period amounts to deficiency in service.
PROFILE OF AXIS BANK
Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporate, SME, Agriculture and Retail Businesses.
With its 1446 branches (including extension counters) and 7,594 ATMs across the country, as on 30th September 2011, the network of Axis Bank spreads across 953 cities and towns, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Bank also has overseas offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai and Abu Dhabi.
The Bank's website www.axisbank.com offers comprehensive details about its products and services. For further information please contact
Mr. V Srinivasan, Executive Director (Corporate Banking) – Axis Bank said at the Awards ceremony, “Despite a difficult economic landscape, India is amongst the fastest growing economies of the world. Infrastructure sector has remained one of the key drivers of economic growth. The D&B – Axis Bank Infra Awards 2011 is our attempt to recognize the illustrious projects and honor corporate who have been leading infrastructure development in the country.”
He went on to add, “The XIth five year plan estimates 43% of total debt requirement (Rs. 4.20 lakh cores) in infrastructure financing to be raised from banks. We see huge growth potential in the sector. Axis Bank has been one of the leading arrangers of the infrastructure finance and we would continue to partner in the sector’s growth
History of axis bank
Axis Bank was formed as UTI when it was incorporated in 1994 when Government of India allowed private players in the banking sector. The bank was sponsored together by the administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation of India (LIC) and General Insurance Corporation ltd. and its subsidiaries namely National insurance company ltd., the New India Assurance Company, the Oriental Insurance Corporation and United Insurance Company Ltd. However, the name of UTI was changed because of the disagreement on terms and conditions of the bank authority over certain stipulations including royalty charged over the name from UTI AMC. The bank also wanted to have a new name from its pan-Indian as well as international business perspective. So from July 30, 2007 onwards the UTI bank was named as Axis Bank.
AXIS Bank is one of the fastest growing banks in private sector. The Bank operates in four segments, namely treasury, retail banking, corporate/ wholesale banking and other banking business. The treasury operations include investments in sovereign and corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange operations on the account, and for customers and central funding. Retail banking includes lending to individuals/ small businesses subject to the orientation, product and granularity criterion. It also includes liability products, card services, Internet banking, automated teller machines (ATM) services, depository, financial advisory services, and nonresident Indian (NRI) services. The corporate/ wholesale banking segment includes corporate relationships not included under retail banking, corporate advisory services, placements and syndication, management of publics issue, project appraisals, capital market related services, and cash management services. The Bank's registered office is located at Ahmedabed and their Central Office is located at Mumbai. The Bank has a very wide network of more than 1042 branches (including 56 Service Branches/ CPCs as on June 30, 2010). The Bank has a network of over 4,474 ATMs providing 24 hrs a day banking convenience to their customers. This is one of the largest ATM networks in the country. The Bank has five wholly-owned subsidiaries namely Axis Securities and Sales Ltd, Axis Private Equity Ltd, Axis Trustee Services Ltd, Axis Asset Management Company Ltd and Axis Mutual Fund Trustee Ltd. Axis Bank was incorporated in the year 1993 with the name UTI Bank Ltd. The Bank was the first private banks to have begun operations after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd, The New India Assurance Company Ltd, The Oriental Insurance Company Ltd and United India Insurance Company Ltd. In the year 2001, the bank along with Global Trust Bank (GTB) had a merger proposal to create the largest private sector bank, but due to media's issues both the banks withdraw the merger proposal. In the year 2003, the Bank was given the authorized to handle Government transactions such as collection of Government taxes, to handle the expenditure related payments of Central Government Ministries and Departments and pension payments on behalf of Civil and Non-civil Ministries such as defense, posts, telecom and railways. In December 20003, the Bank launched their merchant acquiring business
AXIS Bank Customer Care Grievance Redressal Complaint Management Team
Generally, most of the requests, queries, information, complaints (If, any) are sorted out by Axis Bank’s multi-layered customer care system. But there are times when High Networth Clients (HNIs as they are called), Large Corporate Clients who conduct many thousand transactions of various nature within a span of single day, have unresolved issues of Complex Nature.
In order to provide a forum that can effectively address such issues, Axis Bank has a dedicated team called complaints Management Team. Under such situations, you can escalate your complaint to the Complaints Management Team, at Central Office by mailing to cmt.co[at]axisbank.com.
Conclusion
Though the Banking Ombudsman Scheme was introduced in the year 1995,witha viewto do away with the banking customer complaints, the scheme was amended in subsequent years of 2002 and 2006. But the banks do not seem to have adopted the norm s for their efficient functioning that is the reason behind the increasing consumer cases against the banks, which are governed under the scheme. Thus, it can be seen that the Ombudsman scheme is a boon and a very important channel for redressal of grievances by the general public against banks and banking services. It is framed in such a manner that it does not oust the jurisdiction of other courts, and hence, aggrieved people do not hesitate in using the banking ombudsman as a primary forum for resolution of disputes regarding banks. To instill consumer confidence in the scheme, the RBI has to ensure that the awards of the ombudsman are implemented by the banks. Decline in duration of pending complaints also narrates the efficiency of ombudsman in disposal of complaints. Another step taken by RBI to allow the complainant to file the complaint through online mode seems to be successful as more than one-fourth of total complaints are filed through this mode. Though there is an increase in number of complaints from the rural areas but it does not seem to be up to the mark. Improving accessibility of the scheme to the rural poor by having more offices in rural areas is need of the day. Further the scope of Bank Ombudsman is limited to twenty seven grounds on which a customer can file a complaint against bank. Apart from above BO’s offices and Reserve Bank of India also have also started outreach activities for creating awareness among customers like interface with banks, organizing awareness camps, personal/ village visits, participation in exhibitions, responding to readers’ queries in newspapers, broadcasting advertisement