Explained: RBI’s new Integrated Ombudsman Scheme; what has changed and how customers can file complaints
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The Reserve Bank of India (RBI) has introduced a revamped Integrated Ombudsman Scheme, effective from July, to streamline the resolution of customer complaints against regulated financial entities.
What is the new framework?
The new framework replaces the Integrated Ombudsman Scheme, 2021, and seeks to provide a faster, free-of-cost, and non-adversarial mechanism for resolving complaints related to deficiencies in customer service. However, complaints and appeals already filed under the 2021 scheme will continue to be dealt with under the earlier framework.
Which entities are covered?
The scheme applies to customer complaints against a wide range of RBI-regulated entities, including, banks, certain Non-Banking Financial Companies (NBFCs), Prepaid Payment Instrument (PPI) issuers, and Credit Information Companies (CICs).
What is the 'One Nation, One Ombudsman' approach?
The revamped framework continues with the 'One Nation, One Ombudsman' model.
This means complaints are processed without regard to the geographical location of either the customer or the regulated entity, ensuring a uniform grievance redressal system across the country.
When can a customer approach the RBI Ombudsman?
Customers cannot directly approach the RBI Ombudsman. They must first lodge their complaint with the concerned regulated entity. The complaint can be escalated to the RBI Ombudsman if the regulated entity fails to respond within 30 days, or within a longer period prescribed by the RBI, the National Payments Corporation of India (NPCI), or applicable card network rules; or the customer is dissatisfied with the response received.
The complaint must be filed with the Ombudsman within 90 days of the response or expiry of the prescribed response period.
What role does Deputy Ombudsmen play?
The revised scheme expands the responsibilities of RBI Deputy Ombudsmen. They are empowered to examine complaints relating to deficiencies in service and reject complaints that do not satisfy the maintainability and eligibility criteria laid down under the scheme.
The framework also specifies detailed conditions for determining whether a complaint is maintainable.
What relief can customers get?
If a complaint is found valid, the Ombudsman may facilitate a settlement between the customer and the regulated entity; or pass an award directing the regulated entity to rectify the deficiency in service or compensate the complainant.
The compensation limits under the scheme are up to ₹30 lakh for consequential financial losses or up to ₹3 lakh for loss of time, expenses incurred, harassment and mental anguish.
Can Ombudsman decisions be appealed?
Yes. Either party can appeal against the Ombudsman's award before the designated Appellate Authority within the timelines prescribed under the scheme.
To help customers and regulated entities understand the revised framework, the RBI has published a Frequently Asked Questions (FAQ) document on its website explaining the provisions and operational aspects of the revamped Integrated Ombudsman Scheme.
Why does the new scheme matter?
The revamped Integrated Ombudsman Scheme is aimed at making consumer grievance redressal more efficient and transparent. By strengthening eligibility norms, expanding the role of Deputy Ombudsmen, and providing higher compensation for proven service deficiencies, the RBI hopes to improve accountability among regulated entities while offering customers a simpler and more effective dispute resolution process.