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The Reserve Bank of India (RBI) introduced its Banking Ombudsman (BO) scheme as an expeditious and inexpensive forum for bank customers for the resolution of complaints relating to certain services rendered by banks.
However, over the years, the BO is also proving to be a white elephant living in an ivory tower and more interested in protecting banks at the cost of customers. One reason could be the lack of power with the BO to act against wrongdoings of banks. However, in many grievance redressal cases, it is found that there was complete lack of interest or understanding of issues raised by consumers in the BO offices. In fact, the BO even bars customers from filing an appeal or raising the grievance again. But more about it later.
The customer’s bank tried again, and the overseas bank asked for an indemnity if it was to return the money, against the possibility that its customer would claim against it for releasing the funds back to the New Zealand business without authority. The New Zealand bank was not willing to do this because it thought that the indemnity was too broad. It told its customer it could not help get the money back. It did not mention that the money was available but the bank wanted an indemnity first. The overseas bank contacted its New Zealand counterpart several times over the next four months, reminding it that the money was there and would be returned when an indemnity was provided.