Caveat Vendor. You can count on the ombudsman

Are you being treated unfairly by your bank? Is it asking you to bear an interest rate higher than what you signed up for? Is it penalising you for some carelessness on its part?

Or have you been inconvenienced by a failed banking transaction and your bank couldn’t care less? If your answer is yes to any of these questions, count on the banking ombudsman to come to your aid.

But to start with, you will have to take up your complaint with the bank concerned. If you do not hear from the bank in a month’s time or it rejects your complaint or does not suggest a satisfactory course of action, only then can you approach the ombudsman’s office.

You can file a complaint — in paper or via email — for free with the ombudsman office under whose jurisdiction the bank’s branch falls. Let’s read through some complaints that have been taken up and how these were resolved.

You approach your bank for a loan or a locker and you find the bank palming off an insurance product to you along with it. If this sounds familiar, you will relate very well to this case.

In this particular instance, a person wanting to take a housing loan was also forced to subscribe to an insurance policy by his bank. Also, while he was made to understand that he would have to pay the premium only once, the bank went on to deduct the amount from his account every year.

The bank alleged that this was done with the borrower’s knowledge. The justification offered was that the insurance would protect the borrower’s family from the burden of loan repayment in case he passed away before the loan was fully repaid. But with the bank having only verbally informed the borrower and not having taken the borrower’s consent in writing, the ombudsman asked the bank to refund the insurance charges deducted.

In another case too, a bank was asked to refund certain charges levied on a vehicle loan borrower that found no mention in the loan agreement. The bank had charged the borrower an annual inspection fee of ₹8,000 for three years.

A borrower who was sanctioned a home loan of ₹8 lakh at an interest rate of 8.25 per cent under a particular scheme was later told that the scheme had been withdrawn.

The bank then informed him about the new rate of interest of 8.75 per cent and asked him to sign a revised acceptance letter if he wanted to continue with the loan.

The person was left with no choice but to agree since he couldn’t do without the loan then.

When the matter came up with the ombudsman, it ruled in favour of the customer and asked the bank to credit around ₹21,000 to his account as adjustment for excess interest charged.

In another instance, a home loan borrower, who had regularly serviced his loan, was made to bear the brunt of a technical failure in the bank’s system.

His loan was classified as a non-performing asset.

His photographs were taken and a demand notice put up on his front door.

Thanks to the ombudsman’s intervention, the bank rectified its system and issued an apology to the customer apart from paying him ₹15,000 for the deficiency in service.

In the case of a failed ATM transaction, where the account of a customer was debited by ₹10,000 even though no cash was dispensed from the machine, the ombudsman asked the bank to refund the amount to the customer.

The decision was based on the cash verification report of the ATM that showed excess cash on the day of the failed transaction even as other documents submitted by the bank showed the transaction to be successful.