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RBI Integrated Ombudsman Scheme

  • 15 Nov 2021
  • 5 min read

Why in News

Recently, the Prime Minister has launched the integrated ombudsman scheme.

Ombudsman

  • A government official who deals with complaints made by ordinary people against public organizations. This concept of Ombudsman arrived from Sweden.
  • It means an officer appointed by the Legislature to handle complaints against a service or administrative authority.
  • In India an Ombudsman is appointed to resolve grievances in the following sectors.
    • Insurance Ombudsman
    • Income Tax Ombudsman
    • Banking Ombudsman

Key Points

  • About:
    • It amalgamates three ombudsman schemes of RBI - banking ombudsman scheme of 2006, ombudsman scheme for NBFCs of 2018 and ombudsman scheme of digital transactions of 2019.
    • The unified ombudsman scheme will provide redress of customer complaints involving deficiency in services rendered by RBI regulated entities viz. banks, NBFCs (Non banking Financial Companies) and pre-paid instrument players if the grievance is not resolved to the satisfaction of the customers or not replied within a period of 30 days by the regulated entity.
    • It also includes non-scheduled primary co-operative banks with a deposit size of Rs 50 crore and above. The integrated scheme makes it a “One Nation One Ombudsman’ approach and jurisdiction neutral.
  • Need:
    • The first ombudsman scheme was rolled out in the 1990s. The system was always viewed as an issue by consumers.
    • One of the primary concerns was the lack of maintainable grounds on which the consumer could challenge the actions of a regulated entity at the ombudsman or a rejection of the complaint on technical grounds, resulting in a preference for the consumer court notwithstanding the extended timelines for redressal.
    • The move to integrate the systems (banking, NBFC, and digital payments) and expand the grounds for complaints is expected to see a positive response from consumers.
  • Features:
    • The Scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions.
      • Therefore, the complaints would no longer be rejected simply on account of “not covered under the grounds listed in the scheme”.
    • The scheme is jurisdiction neutral and a centralised receipt and processing centre has been set-up in Chandigarh for initial handling of complaints in any language.
    • RBI had created a provision for the use of Artificial Intelligence tools so that banks and investigating agencies could coordinate in a better way in the fastest time possible.
    • The bank customers will be able to file complaints, submit documents, track status, and give feedback through a single email address.
    • There will also be a multilingual toll-free number that will provide all relevant information on grievance redress.
    • The regulated entity will not have any right to appeal in cases where an award is issued by the ombudsman against it for not furnishing satisfactory and timely information.
  • Appellate Authority:
    • RBI’s Executive Director-in charge of Consumer Education and Protection Department would be the Appellate Authority under the integrated scheme.
  • Significance:
    • This will help in improving the grievance redress mechanism for resolving customer complaints against RBI's regulated entities.
    • It is expected to ensure uniformity and streamlined user-friendly mechanisms which will add value to the scheme and bring customer delight and financial inclusion.
    • 44 crore loan account holders and 220 crore deposit account holders would directly benefit from the single ombudsman, they would now be able to lodge a complaint and track their complaints on the same platform.

Source: TH

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