Reserve Bank extended the scope of Banking Ombudsman Scheme

Vastavam web:  The Reserve Bank today the extended the scope of Banking Ombudsman Scheme under which banks could be penalized for mis-selling third-party products like insurance and mutual funds via mobile or electronic banking.The pecuniary jurisdiction of the Banking Ombudsman to pass an award has been doubled to Rs 20 lakh. The RBI had widened the scope of its Banking Ombudsman Scheme, 2006, to include, inter alia, deficiencies arising out of sale of insurance, mutual fund, and other third-party investment products by banks.

Further, “the pecuniary jurisdiction of the Banking Ombudsman to pass an Award has been increased from existing rupees one million to rupees two million”, it said.Compensation not exceeding Rs 1 lakh can also be awarded by the Ombudsman to the complainant for loss of time, expenses incurred as also, harassment and mental anguish suffered by the complainant.