Tag: ombudsman

5 changes in the ombudsman scheme

Personal Finance

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The RBI recently launched an integrated ombudsman to strengthen the existing grievance redressal mechanism for consumers of banks, NBFCs and payment system operators. Here are five things that have changed for consumers relating to the ombudsman scheme.

Single-window coverage

Earlier customers had to approach either the Banking Ombudsman, Ombudsman for NBFCs, or the Ombudsman for Digital Transactions, depending upon who they wished to raise complaints against — whether they were grieved by a bank, NBFC or Non-bank System Participants (such as issuers of Pre-Paid Instruments). But now under the integrated ombudsman scheme, the earlier three ombudsman schemes have been unified into one.

Customers can now complain against any covered financial institution on the portal (https://cms.rbi.org.in), or email to (crpc@rbi.org.in) or send physical complaints to Centralised Receipt and Processing Centre of the RBI at Chandigarh, in a prescribed format. Additionally, a contact centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalized in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course. The contact centre will provide information or clarifications regarding the alternate grievance redress mechanism of RBI and guide customers in filing a complaint.

Besides Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above have been added to the ambit of the integrated ombudsman now. The earlier schemes covered only all scheduled commercial banks, regional rural banks and scheduled primary co-operative banks (under the Banking ombudsman Scheme), all deposit taking NBFCs and non-deposit taking NBFCs with an asset size of ₹100 crore and above (under the Ombudsman Scheme for NBFCs) and non-bank system participants regulated by the RBI (under the Ombudsman for Digital Transactions).

Uniform jurisdiction

Hitherto customers were required to file their complaints under the correct scheme and with the correct ombudsman’s office, based on the territorial jurisdiction with reference to the branch of the entity being complained against, failing which the complaint would be rejected. Now apart, from integrating the schemes across regulated entities, the RBI has also done away with the jurisdiction of each ombudsman office.

The receipt of all complaints and initial processing shall be centralized at the office at Chandigarh, to impart efficiency in the process. The integrated ombudsman shall from now on act as a single point of contact for the aggrieved customer, compared to the erstwhile territorial and scheme based jurisdiction which was a usual ground for rejection of claims.

Wider grounds of complaint

Earlier the separate ombudsman schemes specified certain deficiencies in services, on which customers could lodge complaints with the ombudsman. With limited grounds of complaints specified, one could not complain against any grievance not listed under the erstwhile schemes. Now the integrated scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions ( such as dispute between regulated entities or one involving an employer- employee relationship, or relating to any service not within the purview of the RBI). Henceforth, complaints would no longer be rejected simply on account of not being covered under the grounds listed in the scheme. Customers can now through the integrated scheme, seek redressal for any deficiency in service, if the same is not resolved to the satisfaction of the customer or not replied to, within a period of 30 days by the regulated entity.

No differential compensation

The erstwhile ombudsman schemes had specified limits on the compensation provided to the complainant. The Award under the schemes were limited to the amount arising directly out of the act or omission of the regulated entity or ₹20 lakh (in the case of banks or non-bank system participant), whichever is lower. The said limit was lower at ₹10 lakh in the case of the covered NBFCs, under the Ombudsman Scheme for NBFCs.

This differential treatment has now been streamlined under the integrated scheme. Now on, for any consequential loss suffered by the complainant, the Ombudsman shall have the power to provide a compensation up to ₹20 lakh. That apart, up to ₹1 lakh can also be awarded for the loss of the complainant’s time, expenses incurred and for harassment/mental anguish suffered by the complainant, as was available in the erstwhile schemes.

Appeal

The ombudsman schemes permitted customers to appeal against the award of an ombudsman or for the rejection of a complaint, to the appellate authority within 30 days. The appellate authority was vested with the Deputy Governor of the RBI in charge of the department implementing the erstwhile schemes.

Now under the integrated scheme, customers can file the appeal using the same portal. That apart, from now on the Executive Director in-Charge of the department of the RBI administering the Scheme, shall be the Appellate Authority.

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Insurance: Now file your complaints electronically to Ombudsman

Banking & Finance

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Individual insurance policyholders may soon have a better deal when it comes to addressing their grievances around deficiencies in services on part of insurers, agents, brokers, and other intermediaries.

This is because the latest amendments to the Insurance Ombudsman Rules, notified by finance ministry on Tuesday, has enlarged the scope of complaints to Ombudsmen from only disputes earlier to deficiencies in service.

The Department of Financial Services in the Finance Ministry has brought comprehensive amendments to the Insurance Ombudsman Rules 2017 with a view to improve the working of the Insurance Ombudsman mechanism to facilitate resolution of complaints regarding deficiencies in insurance services in a timely, cost effective and impartial manner.

Also now insurance brokers have been brought within the ambit of the Ombudsman mechanism, by empowering the Ombudsmen to pass awards against insurance brokers as well.

Under the amended rules, the timeliness and cost-effectiveness of the mechanism has been substantially strengthened. Policyholders will now be enabled for making complaints electronically to the Ombudsman and a complaints management system will be created to enable policyholders to track the status of their complaints online, an official release said.

Further, the Ombudsman may use video-conferencing for hearings. To enable access to relief through the Ombudsman mechanism even when there is vacancy in the office of a particular Ombudsman, provision has been made for giving additional charge to another Ombudsman, pending the filling of the vacancy, the release added.

A number of amendments have been made for securing the independence and integrity of the Ombudsman selection process, while also building in safeguards to secure the independence and impartiality of the appointed persons while serving as Ombudsmen. Further, the selection committee will now include an individual with a track record of promoting consumer rights or advancing the cause of consumer protection in the insurance sector.

The Ombudsman mechanism was administered by the Executive Council of Insurers, which has been renamed as the Council for Insurance Ombudsmen, the release added.

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RBI report, BFSI News, ET BFSI

Banking & Finance

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Consumer complaints about banking services jumped 57 per cent to 3.08 lakh for the year to June 30, 2020, the Reserve Bank said on Monday. In its annual report on Ombudsman Schemes, the central bank said over a fifth of the complaints were about services at ATMs or with debit cards, followed by mobile or electronic banking at 13.38 per cent. Non-observance of Fair Practices Code (FPC) was at third place.

Complaints received regarding credit cards, failure to meet commitments, levy of charges without notice, loans and advances and non-adherence to the Banking Codes and Standards Board of India (BCSBI) norms increased this year as compared to previous year.

The number of complaints pertaining to ‘Direct Sales Agent (DSA) and recovery agents’ increased from 629 complaints in 2018-19 to 1,406 this year, it said.

The disposal rate declined marginally to 92.36 per cent, as against 94.03 per cent in 2018-19 as the surging complaints had to be handled by the same number of staff, it said.

On the non-bank finance companies front, there was a 386 per cent jump in the number of complaints received by the Ombudsman Scheme for Non-Banking Financial Companies at 19,432 and the disposal rate stood at 95.34 per cent.

The Ombudsman Scheme for Digital Transactions handled 2,481 complaints during the year with a maximum 43.89 per cent being related to non-adherence of RBI code for payment transactions.

Deputy Governor M K Jain said the year was a challenging one for the financial consumers vulnerable to the adverse consequences of the pandemic and commended the Ombudsmen offices for being functional through the difficult period.

He also said the RBI will strive to improve the disposal rate going forward.

Governor Shaktikanta Das had last week announced a plan to integrate all the three offices (banks, NBFCs, digital payments) into a single ombudsman for the country.

The share of SBI and nationalised banks in the consumer complaints decreased to 59.65 per cent as against 61.90 per cent, on the back of a surge in the share of private banks.

SBI had the largest share among lenders in the number of maintainable cases disposed at 48,333, followed by HDFC Bank at 15,004, ICICI Bank at 11,844 and Axis Bank at 10,457.

The turnaround time for complaints went up to 95 days from the 47 days in the year-ago period, and stood at 45 days for the January-June 2020 period, it said.

The Chandigarh office led when it came to maintainable complaints in 2019-20 with 30,574 concerns as against under 21,000 complaints across two ombudsmen offices in Mumbai and about 29,000 in New Delhi.



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Tax ombudsman on the cards: Will it have adequate teeth?

Personal Finance

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If you are a taxpayer, you sure would have a tale to tell about your tryst with the tax department. While there are some mechanisms to help taxpayers resolve their grievances, the Economic Survey offers a new ray of hope by emphasising on the need for reintroducing the tax ombudsman, independent of tax administration, to fulfil taxpayers’ rights. It states that a dedicated institution to take up issues from taxpayers’ perspective helps in developing trust of the taxpayers.

Background

For direct taxes, the Institution of Income-Tax (I-T) Ombudsman was created in the year 2003 to deal with grievances related to settlement of IT complaints.

Issues that were allowed to be filed with the ombudsmen include delay in issue of refunds beyond the time limits prescribed by law, lack of transparency in identifying cases for scrutiny, non-communication of reasons for selecting the case for scrutiny, non-adherence to prescribed working hours and unwarranted rude behaviour by tax officials. The ombudsman aimed to deal with cases independent of the jurisdiction of the income-tax department.

However, in February 2019, the institutions of Income-Tax Ombudsman as well as Indirect-Tax Ombudsman were abolished on the grounds that they failed to achieve their objectives. A possible reason may have been inadequate independence from the tax department.

Existing alternatives

Taxpayers can currently use ‘e-Nivaran’, a single window to address all grievances received through various channels. Through e-Nivaran, taxpayers can submit grievances related to e-filing, TDS, refunds, differences with the assessing officer and other partner institutions such as NSDL.

The other option is to approach Aaykar Sewa Kendras (ASK) centres, which provide taxpayer-related services, including grievance redressal in several towns and cities. Applications to the centre can be filed in person as well as through a drop-box facility.

Meanwhile, Taxpayer Charter, introduced in 2020, lists out a taxpayer’s rights and obligations. As per this, there should be a courteous, fair and reasonable treatment to taxpayers. Taxpayers who are unhappy or perceive the handling of their assessment proceedings to be contrary to the Taxpayer Charter can approach the Principal Chief Commissioner of Income Tax in their respective zones.

While the above are for grievance related to income tax, for GST complaints, the government has established an online grievance redressal system through the GST Portal (selfservice.gstsystem.in).

Finally, one can also file a complaint through Centralised Public Grievance Redress And Monitoring System (CPGRAMS), an online web-enabled system, that aims to enable submission of grievances by the citizens to Ministries/Departments/Organisations who scrutinise and take action for speedy and favourable redress of these grievances.

Possible framework

The grievance mechanisms stated above are not independent (entirely) of the tax jurisdiction.

Thus, to avoid conflict of interest, ensure fair dealings and consequently build the trust between taxpayers and the concerned tax authority, the Economic Survey suggests that it is imperative to have a redressal organisation with adequate teeth and which is independent of the tax department..“The earlier Ombudman framework was ineffective. One hopes the new framework provides enough power and independence for it to be effective in resolving taxpayers complaints,” says Sunil Gidwani, Partner, Nangia Andersen.

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How to get your insurance complaints addressed

Personal Finance

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Insurance products, be it life, health or motor-related can be somewhat difficult to understand in terms of coverage, exclusions and other aspects such as sub-limits, co-payments and no claim bonus. While the awareness about insurance products is slowly improving, it is still low compared to the same in developed nations. This leaves room for misrepresentation, mis-selling and sometimes even fraud.

For instance, recently some “policyholders” of Bajaj Allianz General Insurance company tried to make a claim on their motor insurance policy. But the insurer didn’t settle their claims as the policies held by them were fake. Though the insurance company claims to have taken the necessary steps against the fraudsters, it was the “policyholders” who were left in the lurch. While these individuals will have to fight it out in court, others who hold a genuine policy have recourse in case of any issues.

So, if you are an aggrieved policyholder, here is how you can file a complaint.

First step

If you have any issue or a complaint against an insurer, the first step is to inform the respective insurance company’s grievance redressal cell. All life and general insurance companies provide details contact personnel (phone number and email address) on their website and the policy document. You can reach out to insurers through their digital platforms as well. With offices/branches of insurers temporarily were closed or working at minimum capacity, post pandemic , insurance companies have taken initiatives to encourage policyholders to access their services through digital touch points such as WhatsApp, mobile apps, chatbots and e-mails.

Alternatively, you can directly connect with the insurer and raise a complaint by calling the toll-free number provided on the website and in the policy document.

Insurers update you on the status of the complaint through SMS or email.

Time limit

The insurer should acknowledge the complaint within three days and provide a solution within 15 days or as per the time limit set by the insurance regulator, IRDAI. The regulator has defined the maximum turnaround time (TAT: time taken for completing a task or process) for different services provided by the insurers. For instance, the maximum TAT for life insurers when it comes to settlement of maturity claim or survival benefit or penal interest not paid is 15 days. Similarly, TAT is 30 days for settlement of death claims without investigation requirements and is six months in cases with investigation. You can get the details on TAT from the websites of the respective insurers or IRDAI.

A few insurers such as Digit Insurance provide detailed TAT for each of their services. For premium-related issues, the maximum TAT is 10 days. These issues include premium paid but the receipt not received by the policyholder or premium charged wrongly by the insurer.

If your issue is unresolved at these levels, you can write to the grievance redressal officer of the respective insurer. Again, the contact details (email/phone) will be available in your policy document and on the insurer’s website.

Escalation

If your complaint is still not addressed within the time limit or you are not satisfied with the resolution offered, you can contact IRDAI directly. You can register your complaint in one of the three ways.

First, call the toll free number (details available on the IRDAI website as well on the insurers’ websites). Two, send an e-mail along with the resolution offered by the insurer, if any, along with your policy document or policy number and other relevant supporting documents, if any. Three, you can register your complaint online and keep track of it using Integrated Grievance Management System (IGMS). Alternatively, you can write to the regulator’s grievance cell along with the requisite documents. For this, you need to fill the complaint registration form (available online on IRDAI’s website) and post the same to the Consumer Affairs Department- Grievance Redressal Cell, IRDAI.

Beyond this, you have the right to lodge your complaint with the insurance ombudsman or a consumer/civil court. The details of the insurance ombudsman are available on the respective insurers’ websites and your policy document. You can approach the office nearest to you.

If both parties agree for mediation, the ombudsman gives a recommendation within one month from the date of complaint. Otherwise, the ombudsman passes judgement within three months from the date of receipt of all requirements from the complainant. Keep in mind that you must approach the ombudsman within a month from the date of sending a written complaint to the insurer (to which there is no reply) or within one year from rejection by the insurer.

However, before you escalate the matter with IRDAI or the ombudsman, you must first write to your insurer.

Do note that, you don’t have to pay a fee for making a complaint.

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