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  Business   Economy  24 Jun 2017  Banking Ombudsman can now slap Rs 20 lakh fine

Banking Ombudsman can now slap Rs 20 lakh fine

PTI
Published : Jun 24, 2017, 9:28 am IST
Updated : Jun 24, 2017, 9:28 am IST

Banks could be penalised for mis-selling third-party products like insurance and mutual funds via e-banking.

RBI governor Urjit Patel.
 RBI governor Urjit Patel.

Mumbai: The Reserve Bank today the extended the scope of Banking Ombudsman Scheme under which banks could be penalised for mis-selling third-party products like insurance and mutual funds via mobile or electronic banking.

The pecuniary jurisdiction of the Banking Ombudsman to pass an award has been doubled to Rs 20 lakh. "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/ electronic banking services in India," the central bank said.

 

The RBI had widened the scope of its Banking Ombudsman Scheme, 2006, to include, inter alia, deficiencies arising out of sale of insurance, mutual fund, and other third-party investment products by banks.

Further, "the pecuniary jurisdiction of the Banking Ombudsman to pass an Award has been increased from existing rupees one million to rupees two million", it said.

Compensation not exceeding Rs 1 lakh can also be awarded by the Ombudsman to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered by the complainant.

Banking Ombudsman is a quasi judicial authority functioning under the Banking Ombudsman Scheme, 2006. The authority was created to enable resolution of complaints of customers of banks relating to services rendered by the lenders.

 

Tags: banking ombudsman scheme, rbi, bad loans, banks, banking sector, reserve bank, urjit patel, rbi governor
Location: India, Maharashtra, Mumbai (Bombay)