The Hindu Business Line : Ombudsman gets good response from foreign bank customers

COMPLAINTS about foreign banks constitute the single largest block of grievances lodged with the banking ombudsman under the revised Banking Ombudsman Scheme, 2002.

Data on the general trend of complaints, released by the office of the local banking ombudsman, suggest that customers of foreign banks are quite receptive to the idea of approaching the authority instituted by the Reserve Bank of India. Complaints about private sector banks come next, followed by those against nationalised banks, including SBI.

While complaints originate with respect to a number of areas, an overwhelming number (nearly 30 per cent) related to deposit accounts maintained with banks. Some of the other key issues are collection of instruments, failure to honour guarantees or letters of credit, and fraudulent withdrawal of money.

Mr P.K. Sarkar, Banking Ombudsman in-charge of select States in the eastern region, said commercial banks had generally responded promptly to references made by his office. Around 700 complaints have been received in 2003-04; all, except seven, have been disposed of. Between April and August 2004, more than 250 complaints have been received; 56 of these are yet to be disposed of.

Complaints are often being received alleging deficiency in banking services. These range from delays in collecting outstation cheques to non-issue of demand drafts to fraudulent encashment of cheques. However, most of these have come from Kolkata and Howrah.

The Banking Ombudsman is not in a position to deal with complaints relating to credit cards and lending products (such as home/auto loans). Also, claims against notional loss or civil damages are not compensated under the scheme.

Complaints, it is pointed out, may appear in the context of operation in savings/current accounts and term deposits maintained with banks. There may be delays, non-credit of cash deposits and even non-compliance with the RBI directives applicable to rates of interest on deposits.

`Customer beware'

AN individual who wishes to open a savings or current account with a bank must fully familiarise himself with the charges that the bank may levy, Mr P.K. Sarkar, Banking Ombudsman in-charge of select States in the eastern region, told newspersons in reply to a query.

"Customers must be aware of changes in service charges, which are fixed by the bank, before accounts are opened", he said, adding that complaints regarding such issues are not uncommon.

He, however, said that banks must try to raise the level of awareness among its clients, especially when it comes to matters such as a sudden increase in minimum balance requirement.