The Reserve Bank of India has widened the scope of its banking ombudsman platform by including issues regarding mis-selling of third-party products, and customer grievances related to mobile banking and electronic banking issues.
The new rule will be effective from July 1, and the banking ombudsmen will enjoy more power in their pecuniary jurisdiction.
Banks sell third-party insurance or MF products to earn a fee, but they were so far not liable to address customer grievances.
Now, the deficiencies arising out of sale of insurance, mutual fund and other third-party products will be looked into.
Banks would now have to take the onus of providing after-sales service on third-party products.
RBI has also simplified the process of making complaints.
Under the amended scheme, a customer would also be able to lodge a complaint against the bank for its non-adherence to RBI instructions with regard to mobile banking and electronic banking services.
The pecuniary jurisdiction of the banking ombudsman to pass an award has been increased from existing, Rs.10 lakh to Rs. 20 lakh.
Ombudsman can direct banks to pay compensation up to Rs. 1 lakh to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered.
Source: https://www.pressreader.com/india/economic-times/20170624/281930247985177
