RBI to banks: Appoint internal ombudsman

The Reserve Bank of India has asked all public sector banks and some private sector and foreign banks to appoint an internal ombudsman. RBI had introduced the Banking Ombudsman Scheme (BOS) in 1995 to provide an expeditious and inexpensive forum to bank customers for resolution of their complaints relating to deficiency in banking services.

The internal ombudsman, to be designated as chief customer service officer (CCSO), should not have worked in the bank in which he/she is appointed as CCSO, the RBI said. “The Reserve Bank has taken this initiative to further boost the quality of customer service and to ensure that there is undivided attention to resolution of customer complaints in banks,” an official statement said.

While all public sector banks will have to appoint a chief customer service officer, the private sector and foreign banks that have been asked to appoint a CCSO are ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Standard Chartered Bank, Citi Bank N.A. and HSBC. “These banks have been selected on the basis of their asset size, business mix, etc.,”RBI said.

From a total of 11 grounds of complaints when the BO Scheme was introduced in 1995, it now provides for 27 grounds of complaints/deficiencies in bank services.

The RBI operates the BOS free of cost, so as to make it accessible to all. The bank’s internal ombudsman will be a forum available to bank customers for grievance redressal before they need to approach the banking ombudsman.

Insurance firm told to pay Rs 3 lakh for denying mediclaim

A consumer forum in New Delhi has pulled up an insurance firm for denying a man his mediclaim amount. It has directed the company to pay over Rs 3 lakh as compensation to his widow for unfair trade practices and causing mental harassment.

The complainant, Sangeeta Saadh, approached the forum after Reliance General Insurance Company Limited failed to reimburse the medical costs of her husband, who died of multiple organ failure during his treatment at a city hospital. She approached the firm with a claim of Rs 2.82 lakh in June 2009 but the company did not reimburse the amount in the past six years.

“Private insurance companies, in order to augment their business, are indulging in malpractices. They issue insurance covers and collect premium from people and thereafter repudiate their claim if the same is filed by the insured within a short span of time after taking the policy, by taking refuge under the exclusion clauses forming part of the terms and conditions of the policy,” the East District Consumer Disputes Redressal Forum said.

The forum also asked the central government to immediately take action against such companies by cancelling their licenses or prosecuting them for cheating consumers. “These malpractices need to be taken care of by Insurance Regulatory and Development Authority and other authorities, besides the Indian government of India,” the bench presided by NA Zaidi said.

The bench rejected the insurance firm's claim that the complainant Sangeeta was rightfully not given the cost of medical treatment of her husband on account of ‘exclusion clause 10’ of their policy, which stated that treatment for alcoholism and related disorders was not payable under its policy. The bench noted that the complainant’s husband was in good health and had no pre-existing disease when he bought the policy, adding that there was no ground for the insurance firm to reject the claim. Her husband had taken the policy from the firm for Rs 3 lakh. The bench ordered the firm to give the entire medical expenses and a compensation of Rs 30,000 to Sangeeta.