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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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NPA in Banking

Non-Performing Assets (NPA) in banking refer to loans or advances that are in default or arrears, meaning the borrower has not paid back the principal or interest for a specified period. An asset is classified as non-performing if:

1.  Principal and Interest Payments: The payments are overdue for a specific period (usually 90 days or more).

2.Financial Health of Borrower: The borrower’s financial condition is such that there’s a risk of not recovering the full amount of the loan.

Types of NPAs:

1.Sub-Standard Assets: Loans that have remained non-performing for less than 12 months.

2.Doubtful Assets: Loans that have been non-performing for more than 12 months.

3.Loss Assets: Loans where loss has been identified but the amount has not yet been written off.

Impact of NPAs:

1. Financial Health: High NPAs affect a bank’s profitability and financial stability.

2.Capital Requirements: Banks need to set aside provisions for potential losses, affecting their capital base.

3. Regulatory Compliance: Banks must adhere to regulatory norms regarding NPAs, which can impact their operations.

Managing NPAs involves efforts such as loan restructuring, recovery through legal means, or selling off bad loans to asset reconstruction companies.

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