The banking industry decided to set up an Ombudsman's Office in 1997 when it became clear that:

• there was a need to improve the public image of the banks;
• the industry was being criticised by government and consumer bodies regarding service;
• the industry was out of step with overseas developments to establish ombudsman schemes;
• government regulation might occur if the industry did not regulate itself.

The Banking Council appointed Mr Charl Cilliers as Ombudsman in 1997. Shortly after Mr Cilliers took office he realised that his office was open to the serious criticism that it lacked impartiality and independence. This was because he had been appointed by the industry itself. This problem of the independence of the Office is discussed in the First Report.

As a result of the concern for the independence of the office, a Commission was appointed to select a new incumbent. In May 2000, a new Office was established under new rules and under new leadership.

The new office was initially called the Office of the Banking Adjudicator (OBA) and was incorporated as a company not for gain, in terms of section 21 of the Company's Act. The powers of the Board were divided between the Board, the Commission and the Adjudicator.

The Board of the company was composed mainly of bankers and its main function was to ensure that the Office was adequately funded.

There was also a Commission that ensured the independence of the Adjudicator and the office. The two bodies were "amalgamated" into a single Board with a minority of banking representatives to ensure the independence of the scheme in 2003.

The Adjudicator was responsible for the day to day running of the office. Currently the Ombudsman is Advocate Neville Melville.