RBI to banks: Ap­point in­ter­nal om­buds­man

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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.

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