Unit 3
Why in News?
On November 12, 2021, Prime Minister Narendra Modi launched the Reserve Bank Integrated Ombudsman Scheme via a virtual
meeting.
Background:
• It was launched on November 12, 2021.
• The Scheme simplifies the grievance redress process at RBI by enabling customers of Regulated Entities (REs) like banks,
Non-Banking Financial Companies (NBFCs), Payment System Participants (PSPs), and Credit Information Companies to
register their complaints at one centralised reference point.
• The objective of the RB-IOS is to provide cost-free redress of customer complaints involving ‘deficiency in service’ on the
part of entities regulated by the RBI, if not resolved to the satisfaction of the customers or not replied to within a period
of 30 days by the regulated entity.
• It integrates the erstwhile three Ombudsman schemes of RBI namely, (i) the Banking Ombudsman Scheme, 2006; (ii)
the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital
Transactions, 2019.
• In addition to integrating the three existing schemes, the Scheme also includes under its ambit additional REs, namely,
Non-Scheduled Primary (Urban) Co-operative Banks with a deposit size of ₹50 crore and above and Credit Information
Companies.
• The Scheme adopts the ‘One Nation One Ombudsman’ approach by making the RBI’s Ombudsman
mechanism jurisdiction neutral.
What is new in this scheme?
To get citizens’ financial grievances addressed will no longer have to chase different entities regulated by RBI
There will be a single point of reference to file complaints, submit documents, track the status of complaints and receive feedback.
The Reserve Bank-Integrated Ombudsman Scheme aims to further improve the grievance redress mechanism for resolving
customer complaints
Who is Ombudsman?
Ombudsman is an appellate body where customers can escalate complaints if the financial institution fails to address the complaint
within 30 days.
Even when customers are not satisfied with the resolution offered or explanation given by the financial institution they can
approach the ombudsman.
How will this scheme work?
The central theme of the scheme is based on ‘One Nation-One Ombudsman’.
It will have one portal, one email and one address for the customers to lodge their complaints.
There will be a single point of reference for customers to file their complaints, submit the documents, track status and provide
feedback.
How grievances are redressed presently?
The Banking Ombudsman Scheme (BOS) was launched in 1995.
It has undergone five revisions and also forms the basis for the launch of the Ombudsman Scheme for Non-Banking Financial
Companies (OSNBFC) in 2018 and the Ombudsman Scheme for Digital Transactions (OSDT) in 2019.
Prepared on the basis of the Recommendations of an RBI’s Integral Working Group:
The Committee made some major recommendations with the most prominent one being the convergence of the existing
Ombudsman Schemes – the BOS (as amended up to July 1, 2017), the OSNBFC, 2018 and the OSDT, 2019 – into a single integrated
”RBI Ombudsman.”
To increase transparency and consumer awareness it had also suggested broad-base the grounds of complaints and incorporating
only a detailed ‘negative’ or ‘exclusions’ list for rejection of a complaint.
The time taken in resolving the complaint was also an area of concern for the committee which recommended a reduction in the
turnaround time (TAT) for complaint resolution to 30 days in a phased manner over a period of two years.
Possible Benefits of the New Scheme:
The strength of a democracy lies in how easy and quick the grievance redressal mechanism is. In that aspect, the RBI’s integrated
ombudsman scheme is a major step.
No matter the nature of the financial grievance, the complainant can lodge it online, and track it online for a time-bound resolution
process.
This one nation –one ombudsman scheme will directly help 440 million loan accounts and 2.2 billion deposit account holders, he
said.
All RBI regulated entities will be covered by this.
Any complaint by account holders can be resolved through this one platform.
In case of online fraud, cyber fraud, etc., the RBI will massively use artificial intelligence.
Banks and investigative agencies will coordinate in the shortest time possible to resolve a fraud.
features of RB-IOS:
o The Scheme will have one portal, one email, and one address for the customers to lodge their complaints.
o It has done away with the jurisdiction of each ombudsman office.
o The Scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions. A
deficiency of service is a shortcoming or an inadequacy in the financial service or some other service related to it that the
RE is supposed to provide.
o It will no longer be necessary for a complainant to identify under which scheme he/she should file a complaint with the
Ombudsman.
o A Centralised Receipt and Processing Centre has been set up at RBI, Chandigarh, for receipt and initial processing of
physical and email complaints in any language.
o The responsibility of representing the RE and furnishing information in respect of complaints filed by customers against
the RE would be that of the Principal Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent.
o The RE will not have the right to appeal in cases where an Award is issued by the ombudsman against it for not
furnishing satisfactory and timely information/documents.
o The Executive Director-in charge of Consumer Education and Protection Department of RBI would be the Appellate
Authority under the Scheme
Some of the salient features of the Scheme are:
1. It will no longer be necessary for a complainant to identify under which Scheme he/she should file complaint with the
Ombudsman.
2. 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’.
3. The Scheme has done away with the jurisdiction of each Ombudsman oce.
4. A Centralised Receipt and Processing Centre has been set up at RBI, Chandigarh for receipt and initial processing of physical and
e-mail complaints in any language.
5. The responsibility of representing the Regulated Entity and furnishing information in respect of complaints filed by customers
against the Regulated Entity would be that of the Principal Nodal Ocer in the rank of a General Manager in a Public Sector Bank
or equivalent.
6. The Regulated Entity will not have the right to appeal in cases where an Award is issued by the Ombudsman against it for not
furnishing satisfactory and timely information/documents.
7. Reserve Bank of India has established the Centralised Receipt and Processing Centre (CRPC) at Chandigarh for receipt of the
complaints Pan India.
8. A copy of the Scheme is available on the RBI website and on the CMS portal
A complaint under the Scheme shall not lie unless:
(a) the complainant had, before making a complaint under the Scheme, made a written complaint to the Regulated Entity
concerned and –
i. the complaint was rejected wholly or partly by the Regulated Entity, and the complainant is not satisfied with the reply; or the
complainant had not received any reply within 30 days after the Regulated Entity received the complaint; and ii. the complaint is
made to the Ombudsman within one year after the complainant has received the reply from the Regulated Entity to the complaint
or, where no reply is received, within one year and 30 days from the date of the complaint.
(b) the complaint is not in respect of the same cause of action which is already –
i. pending before an Ombudsman or settled or dealt with on merits, by an Ombudsman, whether or not received from the same
complainant or along with one or more complainants, or one or more of the parties concerned; ii. pending before any Court,
Tribunal or Arbitrator or any other Forum or Authority; or, settled or dealt with on merits, by any Court, Tribunal or Arbitrator or
any other Forum or Authority, whether or not received from the same complainant or along with one or more of the
complainants/parties concerned;
(c) the complaint is not abusive or frivolous or vexatious in nature;
(d) the complaint to the Regulated Entity was made before the expiry of the period of limitation prescribed under the Limitation
Act, 1963, for such claims;
(e) the complainant provides complete information as specified in clause 11 of the Scheme;
(f) the complaint is lodged by the complainant personally or through an authorised representative other than an advocate unless
the advocate is the aggrieved person.
No complaint for deficiency in service shall lie under the Scheme in matters involving:
(a) commercial judgment/commercial decision of the Regulated Entity;
(b) a dispute between a vendor and the Regulated Entity relating to an outsourcing contract;
(c) a grievance not addressed to the Ombudsman directly;
(d) general grievances against Management or Executives of the Regulated Entity;
(e) a dispute in which action is initiated by the Regulated Entity in compliance with the orders of a statutory or law enforcing
authority;
(f) a service not within the regulatory purview of the Reserve Bank;
(g) a dispute between Regulated Entity; and
(h) a dispute involving the employee-employer relationship of a Regulated Entity.
