Thursday, February 12, 2015

Money matters, and so do your complaints

Grievance Redressal Mechanism in Banks, Insurance and Securities Markets

We are often left in a quandary when we have certain grievances related to our banking, insurance and securities & capital market investments and services. At times, even the branch managers and the sales officers at these banks and institutions are unable to resolve our grievances as we run from pillar to post seeking help and guidance.
We often get misled about the features of an investment or insurance product on account of miss-selling, get charged a fee or penalty that is exorbitant and at times the services which were promised while entering into banking relationship  never get delivered. If you are such a battered service receiver/ customer, what do you do in such a situation?
You should first approach the product or service provider. If it is not resolved to your satisfaction, your recourse is to use the grievance redressal mechanism which is set up by the regulator of that particular sector.
If you have access to internet and e-mail, then you can submit your application online also where, initially you have to register on their website first. All your complaints have to be made in the prescribed format and all the details of the case, the loss suffered, if any, and relief sought need to be furnished in the required format. It is always better to enclose all the documents which you have pertaining to your grievance. For the online submission of your complaints, once a complaint is logged, a registration number is allotted which you can use to track the case in future.
Unfortunately, as on date, we do not have any single authority to address all the complaints regarding financial products and services. So, it becomes still more relevant to know whom to approach for which product in times of need.
The following are the major complaint redressal fora available to citizens for grievance redressals:
(i)    Banking Ombudsman for Banking Related Complaints: The Banking Ombudsman is appointed by the Reserve Bank of India (RBI) to address service related complaints of bank customers, including those related to credit cards issued by banks and non-banking finance companies (NBFC). You can also approach the Ombudsman for disputes regarding receipt and payment of funds to and from your account, interest charged or credited, penalty or fees, ATM cards, debit and credit cards, loan refusal without valid reasons, or any other banking related matter.
If you had approached the bank but not received a satisfactory answer within a month, you can approach the Banking Ombudsman online at, or through an e-mail. All the banks are required to have the details, including name and address of the Banking Ombudsman of your jurisdiction and it has to be made available to you in your bank branch. If your complaint is genuine and valid, the Ombudsman will attempt a settlement between you and the bank. If a settlement does not happen within one month, then the Ombudsman will pass an award after giving both sides a chance to state their case.
Each Banking Ombudsman has a jurisdiction for operation. For customers of Sikkim the Banking Ombudsman’ office is located in RBI , Kolkata Office.

(ii)    SEBI Complaints Redress System (SCORES) for Securities Market related complaints: SEBI Complaints Redress System (SCORES) is the online mechanism set up by the Securities and Exchange Board of India (SEBI), the regulator for the securities market in India. It deals with complaints of investors related to all products and entities regulated by it. You could use SCORES to complain against a company whose securities you have bought in the primary or secondary market, or against mutual funds, providers of portfolio management schemes, venture capital funds and others. You may also complain against intermediaries such as brokers, merchant bankers, depositories and depository participants, registrars to the issue and transfer agents, distributors and financial advisers.
Apart from using the website,, you can also send the complaint physically to any of SEBI’s offices in your area. The regulator will examine its validity and then forward it to the entity concerned. If the complaint is not resolved to your satisfaction within 30 days, you can file a fresh complaint, escalate the matter to senior SEBI officials or consider legal action.
For investors in Sikkim the SEBI office in Kolkata has to be contacted.

(iii)    Integrated Grievance Management System (IGMS) for Insurance related Complaints: The Insurance Regulatory and Development Authority of India (IRDAI) has set up the Integrated Grievance Management System (IGMS) to register complaints against insurance companies, products or distributors. One can complain regarding policy servicing, claims and any other related issue. You can also send an email to , or call the toll free number on the regulator’s website, 155255.
If you have a complaint as a policyholder, first approach the grievance redressal mechanism of the insurer. If that doesn’t work, you can escalate the matter to IGMS.
You can track your complaint at A registered complaint is forwarded to the insurer as well as to IRDAI. Even if you approach the regulator without going through IGMS, the matter will still be sent to the insurer for resolution.
If a policy holder registers a complaint with the insurer’s redressal forum, it is escalated to IGMS. If the compliant comes to IGMS, it gets shared with the insurer. IRDAI’s regulations require a complaint to be resolved within 15 days. If the complainant is not satisfied with IGMS’s work, then he/she can approach the Insurance Ombudsman as well as the consumer court. The Ombudsman will pass an award within one month of considering the case and giving the insurer an opportunity to settle the issue.

(iv)    Investor grievance redressal by Stock Exchanges: Nation-wide stock exchanges such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are required by SEBI to have a mechanism to address investor complaints against a trading member or listed company.
You can register complaints such as non-receipt of funds, securities or dividends, execution of trades without your consent, charging higher brokerage than allowed, and other issues. The most important thing to keep in mind is that the person must be truly a long-term investor in shares, and not a trader or speculator. Since we say ‘share trading’, complaints regarding purchase and sale of shares and demat accounts are considered commercial transactions, which are beyond the scope of the Consumer Protection Act.
An investor can file a complaint in the district or state the company (whose shares she has transacted) is located; or in the district or state in which the stock exchange is located. Location of the depository is irrelevant unless there is some deficiency on its part.
You can register the complaint either online or physically at any investor service centres for NSE. If the complaint is not resolved to your satisfaction, it gets referred to the Investor Grievance Resolution Panel (IGRP). The IGRP gives an opportunity to both parties to present their case and tries to broker a settlement. If that fails, the complainant can seek arbitration. The best remedy would be to adopt arbitration proceedings through the stock exchange.
We have a maze of financial products and they are increasing every year, and it is important that investors and the financial service or product providers are at an equal standing. So it is very important for all of us to know about the mechanism put in place by the various regulators to address our grievances. After all it is our hard earned money which we invest for safety, security and healthy returns and it is our right to get the due from all the service and product providers.
[The writer is currently with the Govt. of Gujarat as Director (Institutional Finance) & Additional Secretary, Finance Department. The opinions expressed in this article are the author's own and do not reflect the views of the organization he is associated with]

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