As of 1 January 2006 the Reserve Bank of India (RBI) says banking ombudsmen will have more power to summon bank officials and issue directives to resolve customer complaints, including those concerning letters of credit (L/Cs).

The ombudsmen's extended powers are a result of recent revisions to India's ombudsman scheme.

RBI operated

One of the main changes aimed at increasing the effectiveness of India's ombudsmen provides for the revised scheme to be fully staffed and funded by the RBI rather than the banks.

Other changes allow complainants to file their complaints in any form, including online, while bank customers will be able to appeal to the RBI against the awards given by the ombudsmen.

L/C brief

There is no change to L/C brief for ombudsmen who can call banks to account if they fail to honour commitments related to L/Cs or guarantees.

The RBI introduced the Banking Ombudsman Scheme in 1995 and first revised it in 2002. Banking ombudsmen currently have their offices in 15 centres.

The RBI says it is at an advanced stage of setting up an independent Banking Codes and Standards Board of India to ensure that comprehensive codes of conduct for fair treatment to customers are formulated by banks and adhered to.

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