Most of us consider ourselves safe by putting the most important credentials with the bank, but what if the bank executive tells you “Sir, sorry the documents were lost!!” This becomes all the more important, when the documents in bank are of property, FD or Insurance bond. This is critical question, which is getting relevant in the current scenario of banking.
While you keep full faith in the banking system and remain pretty causal towards your documents in possession of the bank, some of the banks are not taking adequate measures to ensure safety. The files are kept in a careless manner and there is every likely hood of damage in the long run.
How exposed are you towards losses?
The exposure due to natural calamity is understandable. It might happen that the bank has caught fire and the papers were damaged. But natural contingencies can be shunned. Manmade losses are lack of adequate filing system, damage due to termites, and rats etc. However, most of the banks are not taking any kind of adequate measures in this regard and therefore the risk is high.
Property papers like Registration of the house, Agreement to sale, Form 15G/H are most prone to such losses. The others can be your Fixed Deposit Certificate, Insurance documents, Saving Certificates etc.
Property papers are most important part of the real estate deal. If the seller is unable to produce genuine property papers, the deal gets cancelled. Nobody wants to buy a property whose papers are not with the seller. Selling a property with photo copy is next to impossible task. You will find a very rare chance that the purchaser will accept the fact that you have no valid document.
In case of maturity of your fixed deposit, will a financial institution accept that you don’t own a fixed deposit certificate? To issue a duplicate certificate in this case will be cumbersome, and in case of public sector banks it will be all even more tedious.
In all cases of negligence from the financial institution, Banking Ombudsman (BO) is an authority, whom you can approach. The customer will have to write to the ombudsman about the problem. Most of the time, banks have been slapped a heavy penalty for their laxity. The area and phone numbers of the authorities are mentioned in the RBI website. Total of 15 centers has been formed in India, to settle the issue. Complaints of NRI’s are also heard by BO.
When to file an appeal to BO:
The appeal is to be filed, if after one month of filing a complaint with the bank, the customer was not able to find any satisfactory answer. Generally, banks try and settle the matter in one month time, failing to do so can call for penalties. Do not file an appeal to BO if the same was not filed earlier with the bank.
Compensation amount is equivalent to the losses incurred by the consumer on account of carelessness of the bank. However, the maximum limit of compensation amount or Rs 10 lakhs, whichever is lower is given to applicant.
Another option is to file the appeal with the Appellate Authority, if the banking ombudsman rejects the decision of the aggrieved party. Appellate Authority is the Deputy Governor of Reserve Bank of India.
Please remember, all the complaints made to Ombudsman, should state the problem and should be with supporting documents. For example: If the bank has lost your NSC Certificate, you will have to produce a proof like photo copy in support to your allegations. Whenever you submit any document to the banks, don’t forget to take acknowledgment on the list of submitted documents. It can help you settle the claim easily.
Losing a document is a serious matter and has to be dealt like that. The banks should provide full security of the documents and carelessness should be avoided. Proper tracking of the documents should be done by the banks, and if possible a periodic check should be made.