Commercial Banking

Session 1

Banking Regulation Act 1949

Section 5(c) :

“A banking company is a company which transacts the business of banking in India”

Section 5 (b) :

Banking means “accepting , for the purpose of lending or investment , of deposits of money from the public, repayable on demand or otherwise , and withdrawable, by cheque, draft,order or otherwise”

1. Maintaining deposit accounts

2. Issue & Pay Cheques

3. Collect cheques for the banks customers

Payments

• Traditional Options (Cheques, DD)

• Modern ( Wire transfers, ECS)

Financial Intermediation

• Take deposits

• Lend

• Address safety and liquidity, growth needs

Financial Services

• Forex

• Wealth Mgmt

• Insurance

• Investment Banking

Years : 1100-1300

Large trade volumes in agricultural commodities, cloth, leather .Trade combines

became powerful since specialization brought with it need for more investment

Various Factors : Historical crusades shaped the methods &practices

Greeks: Used credit notes Egyptians : Used Grains Romans : Coins

First known banks : Ancient Temples

Safe Places : Gold, agricultural tools & implements

1786

• General Bank of India

• Estb in Kolkatta

1809-

1843

• 3 Presidency Banks established

• Banks of : Bengal, Bombay, Madras

1921

• 3 Presidency Banks amalgamated

• Imperial Bank of India – European control.

1865

• Allahabad Bank

• Estb purely by Indians

1894

• Punjab National Bank

• Estb in Lahore

1906-1913

• BOI, CBI, BOB, Can Bank, Indian Bank established

1935

• RBI established

1949

• Banking Companies Act : changed to Banking RegAct

1955-1959

• SBI formed

• SBI Act passed enabling SBI takeover 8 subsidiaries

1969

• 14 banks nationalized

1980

• 6 more banks nationalized

• Objective: Social & rural impetus better control

1990’s

• Narasimhan Committee Reforms

• Entry of new Pvt sector, Foreign banks

Financial System

Central Banking Authority

RBI

Capital Markets Regulatory Authority

SEBI

Insurance and Pension

Regulators

IRDA

RBI

IDBISmall

Industries Dev Bank of India

NABARD Exim BankNational

Housing Bank

RBI

Commercial Banks

Public Sector

Nationalized

Banks

SBI & Assoc

Other PSU

Private Sector

Old Age New Age

Foreign

BanksRRB’s

Co-Operative

Banks

Schld Non State

District

Primary Credit

Soc

Scheduled Banks : Those listed in 2nd Schedule of RBI Act 1934.Banks need to fulfill Sec 42 (6)(a) to be incld in schedule

PSU Banks:

GOI is the majority stakeholder

27 PSU banks (19 + SBI & 6 subsidiaries)

Have taken a lead role in branch expansion – rural areas

SBI : “Banker to every Indian”

Regional Rural Banks(RRB’s):

Established 1976-1987: Develop rural economy.

Jointly owned by Central Govt + State Govt +sponsor PSU

Target customers : Farmers, artisans etc

Decline in numbers : 196 in March 2005 81 as on date.

Examples: Maharashra Gramin Bank, Saptagiri Grameena

Bank

Private Sector Banks

Majority share capital is held by corporates/pvt parties

Banks not nationalized 1969/1980 : “Old age-Pvt sector”

Post 1992-93 reforms (Narasimhan Committee) entry

permitted

7 “New age” banks & 15 “Old age” banks : March 2009

Examples: Yes Bank, Jammu &Kashmir Bank

Foreign Banks:

HO: outside India but operate through branches or rep

offices

As on June 30 2009: 28 foreign banks operating in India.

Target customers : Corporates, HNI’s, urban middle class

Examples : Standard Chartered,HSBC

Co-operative Banks:

Governed by Co-operative Society’s Act & Banking

Regulation Act.

Eg: Abhudaya Co-Operative Bank, Saraswat Co-Op Bank

Co-Operative Banks:

Comprise of UCB’s: operations lmtd across one state or stretch across states

Rural Co-Operative Banks State Co-Operatives

District Co-Operatives

SCARDB’s: State Co-Op Agricultural & Rural Development Banks

PCARDB’s : Primary Co-Operative Agricultural & Rural Development Banks

Large Network: 53 scheduled UCB’s as per RBI website

30 State Co-Operative Banks

Target customers : Farmers, self employed businessmen/traders Examples : UCB’s –Rupee Co-Operative Bank, Cosmos Co-Operative Bank

SCB’s: Sikkim State Co-Operative Bank

Harshad Mehta Scam

Liberalization of the

“Banana Republic”

NarasimhanCommittee

Recommendations

• Approx Rs 4000 Croresinvolved

• Banking System misused

• Small Investors wiped out

• Rajiv Gandhi Govt

• Propogates liberalization

• Banking Sector Reforms

• Stage set for major overhaul

•Borrowing Bank gives securities to the lending bank

in return for funds

•Typically was used for short term loans (15 days)

and against govnt securities

Ready Forward

Txns

•Supposed to be used issued against Govt securities

and given by the borrowing bank to the lending

bank

•Harshad Mehta :Broker/Fee

•Misused the system and involved Bank of Karad

&Metropolitan Co-Op Bank: Fake BR’s

Bank Receipts

•Fake BR’s used to borrow funds and purchase

shares and drive up prices

•BR’s repaid by sale proceeds

•Once the scam broke banks left with worthless BR’s

•Small savings wiped out(Approx Rs 4000 crores

involved)

Banks

manipulated

1st Wave: Post nationalization -1969

19th July 1969 Govt nationalized 14 banks

Saraiya Commission appointed to examine the banking system

Recommend ways to make it work with Govt’s plan of

economic development

Sec 19 of BR Act ammended to allow formation of

subsidiaries.

2nd Wave: Narasimhan Committee Report #1

Commissioned on August 14, 1991

Set-Up to address the need for the fortification of system

Report #1 submitted on 16th November 1991

Masterprint : “First Phase” of banking reforms 1992-93

Theme : Operational Flexibility & Functional Autonomy

Country reeling under the aftermath of the Harshad Mehta

scam

Main Recommendations: Glimpse

SLR to be to 25% over a period of 5 years

CRR component to be reduced progressively

No bar to open banks in the private/foreign category

Bifurcation of Banks Investment Portfolio.

Categorization& Provisioning of loan assets Standard Assets (0.25%)

Sub-Standard (10% of total outstanding)

Doubtful(100%+ 20/30/50%depending upon age

Loss Assets : 100% outstanding

Gradual Approach: RBI-Committees

Banks have expanded their product offerings: Insurance/Wealth Mgmt etc

Lead to a healthy competition: Transformation of some PSU banks (EgBOB,SBI)

Encouragement to do something novel: Refinance of MFI loans Factoring/Forfaiting

Modern Banking Products : Internet Banking/Mobile Banking

Infusion of Capital into Banks : Capital Adequacy

Type of Bank 1969 2004 2009 Rural Branches

on June 30, 2009

Rural Branches

as % age of all

branches on

June 30,2009

SBI & Assoc 2462 13621 16294 5619 34.4

Nationalized Banks

4553 33359 39703 13425 33.8

RRB - 14486 15199 11644 76.6

Tot PSU Banks

7015 61466 71196 30688 43.1

Oth Schld Comm Banks

900 5807 8979 1126 12.5

Foreign Banks

130 218 295 4 1.4

Non Schld Comm Banks

217 32 44 11 25

Grand Total

8262 67523 80514 31829 39.5

Source: Economic Survey 2009-

Commenced operations on April 1 1935 in Kolkatta.

Constituted to take over activities being performed by the Imperial Bank &

Comptroller of Currency.

Regulate the issue of bank notes

Maintain reserves to secure monetary stability

To operate the credit and currency system efficiently

Served country’s agenda : Rural development I nstitutional

development Bank Supervision &Regulation Financial

Markets

Acts as the currency authority

Controls money supply

Manages foreign exchange

Banker to the Government

Banker to banks

Supervises banks

Holds part of the cash reserves of banks

Provides them with centralized clearing

Safe and economic remittance facilities

Controls licensing, branch expansion, amalgamation etc

Inspection: Seeks information through returns, inspections

/meetings

Intermediaries that compete /complement banks

NBFC’s

Mutual Funds

Insurance Companies

Term Lending Institutions

NBFC’s:

Compete aggressively for business with banks

Cannot

Accept demand deposits

Issue cheques - not part of the payment system

No deposit insurance cover

Main activities include loans, leasing, hire purchase

NBFC’s:

Need to be registered with the RBI.

Set-up : Companies Act 1956

NBFC’s registered with other regulators exempted:

Merchant Banking Co’s-SEBI

Insurance Company-IRDA

Housing Finance Co’s-NHB

NBFC’s:

Classified under 3 categories by the RBI

Asset Finance Companies (AFC) : Birla Global Asset Finance

Investment Company (IC) :

Loan Company (LC)

Only NBFC’s holding a valid Certificate of Registration –

Accept deposits

NBFC’s:

Min / Max tenure for Dep Acceptance:12 months / 60 months

Cannot offer > 12.5% p.a – current celing.

NBFC’s (except certain AFC’s- CRAR of 15% +) – minimum investment grade rating. FA- from CRISIL, MA- from ICRA , CARE BBB, FITCH tA-)

NRE/FCNR funds out of bounds (April 2004).Only NRO funds

Default : Law, Company Law Board

Prepayment of Deposits : Not encouraged

Minimum 3 month lock-in

Possible :Death of Depositor

NBFC’s:

Examples :

Deposit Taking :

Mahindra &Mahindra Financial Services-Mumbai

Bajaj Auto Finance – Pune

NON Deposit Taking

Citicorp Finance (India)Ltd-Mumbai

IDBI Gilts-Mumbai

SKS Microfinance Ltd-Hyderabad

Insures deposits in all

◦ Commercial banks

◦ Foreign banks functioning in India,

◦ Regional Rural Banks

◦ Cooperative Banks

Maximum of Rs.1,00,000 (Rupees One Lakh) across all

branches

Deposits across different branches of the same bank are

aggregated

Deposits across banks are covered individually.

Deposits have to be held in same capacity.

Sole Proprietorship clubbed with individual account .

Deposit Insurance coverage compulsory

Term Lending Institutions:

Provide loans : Medium to Long Term maturities

Customers : Companies operating in industry, service&

infrastructure sectors

State Level:

SFC’s: State Finance Corp

SIDC’s: State Industrial Development Corporation

NEDFI : North Eastern Development Financial Institution Ltd

Term Lending Institutions:

All India Level:

EXIM Bank

SIDBI

PFC

IFCI

Typically specialize-catering to specific sectors (Refer

handout)

Central Board of Directors

Deputy Governor

(Ms Usha Thorat)

Deputy Governor

(Mr S Gokarn)

Deputy Governor

(K.C Chakrabarty)

Deputy Governor

(ShyamalaGopinath)

Governor

( Mr D Subbarao)

National Housing Bank (NHB)

National Bank for Agriculture & Development (NABARD)

Deposit Insurance & Credit Guarantee Corp (DICGC)

Bharatiya Reserve Bank Note Mudran Pvt Ltd (BRBNMPL)

RBI

Banking Operations

*Companies Act 1956

*Banking Co (Acq & Transfer of Undert)

*Bankers Book Evidence

*NI Act 1881

Umbrella Acts

*RBI Act:1934

*Banking Reg Act : 1949

Specific Functions

*Indian Coinage Act

*FEMA

*Public Debt Act

*Securities Contract Act 1956

Dept of Currency Mgmt

Urban Banks Dept

Rural Planning &Credit Dept

Foreign Exchange Dept

Financial Supervision

Dept of Banking Supervision

Dept of Non Banking Supervision

Dept of Banking Operations & Development

Dept of IT

Legal Dept

Monetary Policy Dept

Internal Debt Mgmt Dept

Dept of External Investments & Operations

Dept of Govt & Bank Accounts

Dept of Economic Analysis & Policy

Dept of Statistical Analysis & Computer Services

Dept of Payment & Settlement Systems

Funds mobilization

(Deposits)

Bank

(Financial Intermediation)

Allocation

(Lending)

Time• FD’s

• CD’s

Demand• Savings A/C’s

• Current A/C’s

Demand Deposits:

Payable on demand : Cheque /Cash

No fixed term/lock-ins

Eg: Current/Savings Account

Time Deposits:

Fixed term : Eg –Term Deposits

Functions of Various Business Units

Sales Team gets in touch withits clients to deploy the funds

Decides about deployment -

tenure, currency and rate for

fresh lending and asks business

group abt the availability of funds

BSMGDecides about

funding strategy

Inform BSMG abt

the receipt of funds

Cust. 1 Cust. 2 Cust 3

Bank Branch

Example – Raising & Deployment of Funds

Customer approaches bank to deposit funds in the form of CA/SA/Term deposits

Cust. 1 Cust. 2 Cust 3

Bank Group 2003 2008 2009

PSU Banks 79.6 73.9 76.6

•Nationalized 50.8 48.4 49.1

•SBI Group 28.8 23.8 24.8

•Others - 2.2 2.8

Private Sector 15.3 20.3 18.1

•Old Pvt Sector 6.7 5.0 4.9

•New Pvt Sector 8.5 15.3 13.2

Foreign Banks 5.1 5.8 5.3

Total SCB’s 100 100 100

Note : Data as at March

31 2010 (in percent)

RBI License required

Conditions to be satisfied:

◦ Ability to financially service clients◦ Management◦ Company Conduct◦ Capital Structure and Earning Prospects◦ Impact and justification vis a vis alternates◦ Public Interest (Foreign Banks)◦ Compliance with BR Act ( Foreign Banks)◦ Non discrimination ( Foreign Banks)

KYC:

Involves checking identity :PAN

Sources of income

Location

Rural inclusion : some relaxation

KYC:

Essence is to know the true profile and the genuineness

of the users of the banking channel.

KYC:

Method:

• Screening and verifying customers identity

• Accepting only genuine customers

• Avoid introduction of unaccounted money at all

costs into the banking system

Relaxation in KYC norms

• At bank officials discretion

• Subject to satisfactory introduction by existing account holder ( > 6 months old)

• Bal in all accounts not to exceed Rs 50K

• Total credits in all accounts not to exceed Rs 100000

KYC:

Method:

• Screening and verifying customers identity

• Accepting only genuine customers

• Avoid introduction of unaccounted money at all

costs into the banking system

• Designation of a senior officer to monitor risk

compliance

• Employee Orientation and training of employees

Avoid ……

• Records to be maintained for cash transactions of Rs 10

Lacs or more in INR or equivalent in foreign currency

• Series of cash txns connected to each other of below Rs

10 Lacs or its equivalent in fx within a month and where

the aggregate value exceeds10 Lacs

• Cash transactions in forged or counterfeit notes and

suspicious transactions

• Property derived from money laundering can be confiscated(Eg : Satyam )

• Records pertaining to money laundering need to be preserved for a period of 10 years

• FIU ( Financial Intelligence Unit) set up to track and curb such offences

• Banks/FI’s/Brokers :Report non cash trxs over Rs 1 Crore and cash txns of Rs 10 lacs

• Property derived from money laundering can be confiscated

• Records pertaining to money laundering need to be preserved for a period of 10 years

• FIU ( Financial Intelligence Unit) set up to track and curb such offences

• Banks/FI’s/Brokers :Report non cash trxs over Rs 1 Crore and cash txns of Rs 10 lacs

Eligibility

Current A/C’s :

◦ Individuals

◦ Firms

◦ HUF’s

◦ Societies

◦ Public/Pvt Ltd Companies

Minimum Balance:

Requirements vary from bank to bank

Charges levied for not meeting criteria

“No-frills Account”: special S/B Account

Account Operation

Mode of Operation

POA

Nomination

Minor’s Accounts:

Opened under guardianship of parents/legal guardian

Minor : Decide upon attaining majority

Contract with minor : Void “ab initio”

Under NIA-can bind others except self

Can be admitted to benefits of partnership-can repudiate his

liability within 6 months.

Savings Accounts (3.5% p.a)

Till March 31 2010-calculation on minimum balance between

10th to last date(30/31st)of the month

Effective April 1 interest will be calculated on daily balance

Credited twice a year :31st March / 30th Sepetmber

Cup of Cheer!

SBI-27%

Axis-22%

HDFC-

24%

Fed

Bank-

20%

Dhanalaxmi-

15%

Percentage of total customer liabilities

Date Deposit Withdrawal Balance

10th July 50,000 Nil 50,000

18th July Nil 48,000 2,000

25th July 25,000 Nil 27,000

31st July Nil 2,000 25,000

Used in the “Old” Method”

Calculation in the Old Method:

2000*3.5%*1/12=Rs 5.83

Calculation in the New Method

a) 50,000*3.5%*1/365=Rs 4.79

b) 2,000*3.5%*1/365= Rs 0.19

c) 27,000*3.5%*1/365= Rs 2.58

d) 25,000*3.5%*1/365= Rs 2.39

Total accrued –July Rs = 9.95.

Will be applied = Sept 30

Incremental Gain = Rs 4.1

Minimum tenor: 7 days

Banks free to decide interest rates

Discrimination on rates : Not possible on dep< Rs 15

lacs

Above Rs 15 Lacs : Differential rates ok

Savings Accounts (3.5% p.a)

Till March 31 2010-calculation on minimum balance between

10th to last date(30/31st)of the month

Effective April 1 interest will be calculated on daily balance

Credited twice a year :31st March / 30th Sepetmber

Tool for deposit mobilization

Minimum amount Rs 1 Lac and multiples

Can be issued by scheduled commercial banks except RRB’s

and Local Area Banks (LAB’s)

Issued only in Demat form : Negotiable instrument

No loan possible against CD’s

Premature withdrawal : Not allowed

Interest Rate : At bank discretion

Due Diligence Process:

◦ Compliance with KYC guidelines

◦ Involves the bank having adequate knowledge about a

customers :

Identity

occupation

sources of income

address / location

◦ KYC norms have been “relaxed” to promote financial

inclusion in rural /BPL areas

Minimum Balance :

◦ Usually stipulated as part of terms & conditions of opening

a bank account

◦ “No Frills” accounts are special savings bank accounts

where no minimum balance reqd

◦ Banks may place restriction on number of withdrawals,

transactions during a period

Satisfactory Conduct :Customer &Bank

◦ Customer should ensure that the account is conducted as per

the banks specifications

◦ Bank should safeguard the customers interest and any

information used for cross selling etc must be with express

consent

◦ Operation of the accounts must be as per mandate specified

Types :

Non-resident Ordinary account (NRO)

Non-resident External account (NRE)

FCNR-B

As per FEMA 1999 an NRI means :

Non-Resident Indian National (i.e Non-resident

holding Indian passport.

Eg: 1) Mr X working in the USA on a Green card.

2) Ms Y deputed to Infosys USA from the Indian office.

Working on a work/business visa.

Persons of Indian Origin ( Non-residents holding

foreign passports)

Eg: 1) Mr X is born in the USA. His parents moved to the USA

from Haryana twenty years ago.

2) Mr Y moved to the USA after his B.Tech. After living there

for nearly 10 years, he applied for and is a naturalized US

citizen .

The definition includes

a) Indians going abroad for business/work /vocation indicating an indefinite period of stay.

b) Indian citizens working abroad on assignment with Foreign Governments, Govt. agencies or in UNO and its affiliates IMF,IBRD etc.

c) Govt. officials (both central and state) and other officials of PSU's deputed abroad on assignments or posted abroad including Diplomatic Missions

PIO (Person of Indian Origin)is defined as a citizen of any

country except Bangladesh or Pakistan if :

a) He/she has, at any time held an Indian passport. OR

b) He /she or either of his parents or any of his grand parents was a

citizen of India OR

c) The person is a spouse of an Indian citizen or a person referred to

in a) or b)

NRE Accounts : ( held in INR)

Need to be opened with funds remitted from abroad

Fully repatriable : P+I

Minimum Tenor: 7 Days

Transfer to another NRE Act/FCNR

Local payments can be made

Local credits not permissible (eg: rental income)

Interest rates on NRE accounts(Savings+Term Dep) : RBI controlled

Exchange Risk

FCNR(B) Accounts : ( held in FX)

USD,GBP,CAD,AUD,EURO,JPY

Fully repatriable : P+I

Transfer to another NRE Act/FCNR and vice-versa.

Opened only as term deposits

No Exchange Risk since deposits held/repaid in Fx.

Tenor: 1 -3 years

NRO Accounts : ( held in INR)

When a resident becomes a non resident-account

converted into NRO account.

Legitimate Credits accrued in India-Rent, Income from

investments

Can be opened as Savings, Current,Term Deposit

Principal non repatriable. Interest earned is repatriable

Upto US$ 1 million per financial year can be repatriated.

Permissible Credits/Debits:

Credits:

• Proceeds of inwards remittance into India through normal banking channels

• Legitimate income in India : Rent, pension, interest etc

• Sale proceeds of assets (including immovable property)acquired out of rupee/foreign currency funds or any inheritance.

Credits:

• Any foreign currency which is freely convertible tendered by the

account holder during his/her temporary visit to India

• Foreign currency exceeding USD 5000 or its equivalent in cash should

be supported by a CDF (Currency Declaration Form)

• Rupee funds should be supported by an encashment certificate , if they

represent funds brought from outside.

Debits:

All local payments in rupees including payments for investments in India

(s.t compliance with RBI)

Remittance outside India of current income like rent, dividend, pension ,

interest in India of the account holder

Remittance upto USD 1 million per financial year (April-March)for all

bonafide purposes s.t approval by the AD.

Remittance of Assets

By NRI/PIO:

• Can remit an amount not exceeding USD 1 million per financial year out

of balances held in NRO account/sale proceeds of assets/assets in

India acquired by way of inheritance

• Document Required : Paperwork supporting the acquisition or any

inheritance along with an undertaking by the remitter duly certified by a

C.A in the format prescribed by CBDT(Central Board of Direct Taxes)

Remittance of Assets

By NRI/PIO:

• Can remit an amount not exceeding USD 1 million per financial year

from the sale proceeds of immovable property purchased as a resident or

as an NR/PIO without any lock-in period

• This facility not available to citizens of Pakistan,

Bangladesh,SriLanka,China,Afghanistan,Iran,Nepal and Bhutan

Foreign nationals on a visit to India (non-Indian origin)

• NRO ( Current/Savings) account can be opened

• Funds to open the account can be remitted from outside India through

banking channels or sale of foreign exchange brought to India.

• The funds in such accounts can be converted back into foreign currency

at the time of departure of the foreign national ( provided account less

than 6 months old) and no local funds have been credited

• If account tenure > 6 months –RBI approval required

Resident to Non-Resident:

• When a individual leaves the country(except Nepal/Bhutan) for an

overseas job business etc indicating intention to stay outside – account to

be converted to NRO.

• If the destination is Nepal/Bhutan : The account will continue as

resident

• When such a person working abroad, carrying on business etc comes to

India:

temporarily – account remains NRO

For good : Re-designate account to resident

Resident to Non-Resident :

• Loans Given: While resident but becomes non resident.

Bank discretion and judgement to continue the arrangement

Can allow payment of interest and loan either through local

sources or through inward remittance

Non resident nominee : Credit NRO Account of nominee

Resident nominee: Credit resident account of nominee

POA holder can be a resident.

POA holder can make following payments:

• All local payments including payments for eligible investments

• Remit outside India the current income of the NR after taxes

• POA can remit only to account holder and cannot repatriate funds to any

other account

• POA holder cannot gift any funds from NR account to a

resident on behalf of the NR.

• Cannot transfer funds to another NRO account.

Can be issued to NRI/PIO without RBI approval

Payments can be settled by inward remittance or out of

balances in NRE/NRO/FCNR accounts

Domestic/NRO Accounts:

• Minimum tenor is 7 days

NRE/FCNR(B) Term Deposits:

• Minimum tenure is 1 year

• Maximum tenure is 3 years

• Banks can accept NRE deposits of tenure greater than 3

years but the rate of interest will be capped at the rate for 3

years

NRE term deposit into FCNR (B) and vice versa before

maturity subject to penalty

NRSR/NRNR into NRO deposit before maturity subject to

penalty

If NRE term deposit withdrawn prematurely for conversion

into RFC Account – NO PENALTY.

If such a deposit has remained with the bank for a period less

than 1 year , interest can be paid at savings bank rate provided

such a request is made by the NRE account holder

immediately on return to India.

Since NRNR / NRSR schemes have been discontinued

effective April 1 2002,maturity proceeds of NRNR deposits

can be credited to NRE Accounts on maturity but not

FCNR(B) accounts

Maturity proceeds of NRSR deposits to be credited to NRO

accounts only.

Premature withdrawals of NRNR / NRSR deposits to be

credited to NRO accounts only

Satisfied : Growth of the Bank

Dissatisfied : Look for a resolution

Internal : Complaint to the Bank

External : RBI

Banking Ombudsman

•Came into effect on Jan 1 2006

•The aggrieved customer or his representative can file a complaint

• Written or via E mail

• A complaint was made to the bank and no response

received within a month

• Non satisfactory response received

• Complaint should not pertain to the a matter pending or

dealt by the Ombudsman or which proceedings are pending

before a court

• Complaint is within the limitation period under the Indian

Limitation Act 1963

Process

• Aggrieved customer contacts ombudsman

• Ombudsman sends the complaint to the bank for redressing

• If not settled within a month of receipt, ombudsman awards / rejects

• Customer can appeal to the Appellate (Dy Governor) if dissatisfied

• Banks can appeal after taking consent from CMD