ISSUE There are remedial systems in place, but banks must treat customers with a little more care

Increased penetration of the banking system in the country, technology upgradation and migration to core banking solution have changed the face of the banking sector — this is apparent in the various transformational developments of the recent past.

However, customer services have not improved as much. It is important that the service delivery model is improved so that there are substantial reductions in the number of customer complaints.

Recently, my father, a senior citizen, was perturbed on his return from a bank, where he had gone to open a new savings bank account. The bank had refused to open the account as he was required to be introduced by an existing account holder. And, he did not know anyone who had an account with the bank.

The account opening form had clearly mandated the need, either for introduction by an account holder or for submission of proof of identification. My father had taken the latter with him; yet, the bank insisted on the introduction.

On my advice, my father sent a complaint letter to the bank demanding that they allow him to open the account based on the identification proof, as was required, failing which, he would approach the appropriate Fora to seek remedy. Only then was he able to open an account.

In another instance, the complainant had pledged her gold ornaments in a bank and taken a loan to meet personal commitments. She did not close her account within the specified time and the bank auctioned her ornaments without prior notice.

Need for prior notice

Only when she went to settle the dues did she know that the gold had already been auctioned. She wrote to the bank that not informing her about the auction amounted to dereliction of duty. However, the bank failed to respond to this. Aggrieved, the complainant approached us for assistance.

In an earlier decision of the Appellate Authority of the Banking Ombudsman's Office on a similar issue, the complainant had pledged gold ornaments to avail of an agricultural loan, payable after one year. The borrower did not turn up after the said period for renewal or closure of the loan, and the bank auctioned the gold after serving a notice. However, the notice had been returned with the endorsement “Door Locked” by the post office, and the branch admitted to having received the endorsement before it auctioned the gold.

The Appellate Authority observed that due notice should have been given to the borrower before auctioning the gold, and as this was not done, the bank was directed to return the auctioned gold by crediting the difference between the market value and auctioned value. A compensation of Rs. 5,000 was also awarded. Based on this, we advised the complainant to approach the Office of the Banking Ombudsman for redressal of her grievances.

Forum for resolution

The Banking Ombudsman Scheme was introduced by the Reserve Bank of India in 1995 to provide bank customers an expeditious and inexpensive forum for resolution of their complaints relating to deficiency in banking services. This also reduces the burden on the Courts to a great extent.

We also asked the complainant to approach the Ombudsman within 12 months as it would otherwise be time-barred. Of course, the option of approaching the Consumer Forum to seek remedy for deficiency in services is always available to the consumer.

Notwithstanding the remedial options available, it is important that banks be more proactive, transparent, consumer friendly and accountable in order to ensure that their loyal consumers get fair treatment.

(The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details/queries, contact 24914358/24460387 or