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BANKING OMBUDSMAN AND ITS ROLE

  The Banking Ombudsman is an authority created by the Reserve Bank of India (RBI) to address customer grievances regarding banking services. It provides a cost-free, quick, and impartial resolution process for complaints against banks.  Customers can file complaints if they are dissatisfied with the services of a bank or have not received a satisfactory response from the bank within 30 days of lodging a complaint. Complaints given to Ombudsman Cover  -  Non-payment or delay in payment of cheques, drafts, or bills. Issues related to loans or advances. Non-adherence to fair practices code. Unauthorized debits or service charges. Complaints regarding internet banking or mobile banking. Delay in providing banking services. Unauthorized ATM withdrawals. Wrongful Charges. Ombudsman cannot accept complaints those are  handled by a court, tribunal, or arbitrator. Cases older than one year from the cause of action also do not entertained by Ombudsman.  How to File ...
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MCLR (Marginal Cost of Funds based Lending Rate)


1. New Lending Rate effective from April 2016.​
2. To improve the efficiency of monetary policy transmission.​
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Following are the main components of MCLR - 

 1. Marginal cost of funds;​
2. Negative carry on account of CRR;​
3. Operating costs;​
4. Tenor premium.​
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The main components of base rate system are - 
• Cost of funds (interest rates offered by banks on deposits)​
• Operating expenses to run the bank.​
• Minimum Rate of return ie margin or profit​
• Cost of maintaining CRR (Cash Reserve Ratio).​
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Marginal Cost of funds (MCF): The marginal cost that is the novel element of the MCLR. It has 2 components 
(a) Marginal cost of Borrowings 
(b) Return on Networth​

 Negative carry on account of CRR is the cost that the banks have to incur while keeping reserves with the RBI. The RBI is not giving an interest for CRR held by the banks. The cost of such funds kept idle can be charged from loans given to the people.​

 Operating cost: is the operating expenses incurred by the banks​

 Tenor premium: denotes that higher interest can be charged from long term loans​
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As per the new guidelines, banks have to set five benchmark rates for different tenure or time periods ranging from overnight (one day) rates to one year i.e overnight, one month, three month, six month and one year.​

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