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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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Loan Restructuring & Willful defaulter

Benchmark Parameter for Restructuring 

  • Viability - Within 5 Years
  • Repayment - Within 10 Years
  • Promoter Contribution - 20%  

Classification 

Additional Loan - Remain Standard for One Year
Existing Loan - Upgraded to Standard category after regular repayment for 1 year


Willful Defaulter - RBI Guidelines (Based on Kohli Comittee)
One who has defaulted in loan payment and 
1) he has the the capacity to pay the loan or
2) loan used for different purpose
3) fund used for unrelated to the business (Shiphon-Off)
4) unauthorized sale of loan security
 
Committee headed by ED in a bank declares willful defaulter after giving an opportunity to the borrower and he gets 15 days to respond.

CMD has to review before declare of willful defaulter

If loan amount is greater than or equal to 25 lac,  report has to made to all credit information companies for suit filed. 

If loan amount is less than 25 lac, reporting to Credit Information companies is not required.

Action by Other Bank of Willful Declaration 
1. No Additional Loan
2. No Loan to new project of defaulter for 5 years

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