UPSC Prelims 2010 · General Studies

Question 137: Economy and Social Development

With reference to the institution of Banking Ombudsman in India, which one of the statements is not correct ?

aThe Banking Ombudsman is appointed by the Reserve Bank of India

bThe Banking Ombudsman can consider complaints from Non-Resident Indians having accounts in India

cThe orders passed by the Banking Ombudsman are final and binding on the parties concerned

dThe service provided by the Banking Ombudsman is free of any fee

AnswerThe answer is (c).

Under the Banking Ombudsman Scheme, 2006, run by the RBI, the Ombudsman is appointed by the RBI, complaints can be filed free of charge (including by NRIs with accounts in India), and an award binds the bank if the complainant accepts it. The orders are not final and binding on both sides, because a complainant who is unhappy can still go to a court or another forum. Hence (c) is the incorrect statement.

Why each option is right or wrong

(a) Correct: the RBI appoints the Ombudsman.
(b) Correct: NRIs with accounts in India can complain.
(c) Right (the incorrect statement): the orders are not final and binding on both sides.
(d) Correct: the service is free of fee.

Worth knowing: The Banking Ombudsman Scheme was replaced in November 2021 by the RBI Integrated Ombudsman Scheme.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.