Here Is All You Need to Know About RBI’s Integrated Ombudsman Scheme

December 6, 2021 Mutual Fund

Honourable Prime Minister Shri Narendra Modi has launched ‘The Reserve Bank – Integrated Ombudsman Scheme 2021’ via a virtual meeting on 12th November 2021. The scheme aims to resolve the uneven grievance redressal across customers of RBI-regulated entities.

Prime Minister Narendra Modi refers to The Reserve Bank – Integrated Ombudsman Scheme as ‘One Nation, One Ombudsman System’, which will provide cost-free redressal to the customer complaints involving deficiency in services rendered by entities regulated by the Reserve Bank of India (RBI), if not resolved to the satisfaction of the customers or not replied within a period of 30 days by the regulated entity.

This new scheme integrates the RBI’s three existing ombudsman schemes, namely:

1. The Banking Ombudsman Scheme, 2006

2. The Ombudsman Scheme for Non-Banking Financial Companies (NBFCs), 2018

3. The Ombudsman Scheme for Digital Transactions, 2019

Moreover, the new scheme also includes under its ambit Non-Scheduled Primary Co-Operative Banks with a deposit size of Rs 50 Cr and above.

The RBI says, “The Scheme adopts ‘One Nation, One Ombudsman’ approach by making the RBI ombudsman mechanism jurisdiction neutral.” The biggest benefit to the customers of financial institutions is that there will be faster redressal of their complaints due to the single point contact for all the complaints and complaint rejections will be lesser.

What are the features of the Integrated Ombudsman Scheme?

1. It will no longer be necessary for a complainant to identify under which scheme he/she should file a 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 office.

4. 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.

5. The Principal Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent will be responsible for representing the Regulated Entity and furnishing information in respect of complaints filed by customers against the Regulated Entity.

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.

How would The Reserve Bank’s – Integrated Ombudsman Scheme benefit the depositors/investors?

1. The most important benefit of the new integrated scheme to the depositors and investors at large is that now there is a single point of interface to file complaints, submit documents, track the complaint status, get relevant information, etc.

2. The new scheme will increase the confidence of depositors and investors in the apex level complaint resolution, which will ensure increased participation in the digital payment process.

3. The existing three ombudsman schemes covered 1,091 entities, whereas the new ombudsman scheme will cover 1,975 entities, extending the overall coverage of the ombudsman.

4. The new scheme will ensure the quick resolution of complaints as there will be a reduction in the number of rejections due to out-of-coverage reasons.

How to file a complaint to The Reserve Bank – Integrated Ombudsman Scheme?

1. A customer can file an online complaint on https://cms.rbi.org.in

2. A customer can write an email to CRPC@rbi.org.in

3. A customer can send a postal mail to the 'Centralised Receipt and Processing Centre' set up at the Reserve Bank of India, 4th Floor, Sector – 17, Chandigarh, 160017 in this format.

4. A customer can also call a Contact Centre with a toll-free number – 14448 from 9.30 am to 5.15 pm.

Read on to know the basics of the Integrated Ombudsman Scheme and the components of it:

Who is the Ombudsman?

The Ombudsman is a senior official appointed by the RBI to redress customer complaints against the bank or NBFC or System Participants (as defined in the scheme) for deficiency in certain banking related services covered under the grounds of complaint specified under the Clause 8 of the scheme.

Click here to find the copy of The Reserve Bank – Integrated Ombudsman Scheme available on the official website of the RBI.

What are the existing Ombudsman Schemes?

1. The Banking Ombudsman Scheme, 2006

The Banking Ombudsman Scheme was launched under the Banking Regulation Act 1949 by the Reserve Bank of India with effect from 1995. It was implemented to redress the complaints of customers on certain types of banking services provided by banks and to facilitate the settlements of those complaints. All the Regional Rural Banks, Scheduled Commercial Banks, and Scheduled Primary Co-Operative Banks are covered under the Banking Ombudsman Scheme.

Here are some of the areas of customer redressal available with the banking ombudsman mechanism:

• Non-payment or inordinate delay in the payment or collection of cheques, drafts, bills, etc.

• Non-payment or delay in payment of inward remittances.

• Failure or delay to issue drafts, pay orders, or banker's cheques.

• Non-adherence to prescribed working hours.

• Refusal to open deposit accounts without any valid reason for refusal.

• Levying of charges without adequate prior notice to the customers.

• Refusal or delay in closing the accounts.

• Non-observance of the RBI's guidelines on engagement of recovery agents by banks.

2. The Ombudsman Scheme for Non-Banking Financial Companies, 2018

The Reserve Bank of India introduced the Ombudsman Scheme for Non-Banking Financial Companies on 23rd February 2018 for the customers of NBFCs. It is an expeditious and cost-free apex level mechanism for the resolution of complaints of customers of NBFCs, relating to certain services rendered by NBFCs.

Here are some of the areas of customer redressal available with the NBFCs ombudsman mechanism:

• Non-payment or inordinate delay in the payment of interest on deposits.

• Non-adherence to the Reserve Bank directives, if any, applicable to rate of interest on deposits.

• Non-repayment or inordinate delay in the repayment of deposits.

• Non-presentation or inordinate delay in the presentation of post-dated cheques provided by the customer.

• Failure to convey in writing, the amount of loan sanctioned along with terms and conditions including annualised rate of interest and method of application thereof.

• Failure or refusal to provide sanction letter or terms and conditions of sanction in the vernacular language or a language as understood by the borrower.

• Failure or refusal to provide adequate notice on proposed changes being made in sanctioned terms and conditions in the vernacular language as understood by the borrower.

• Failure or inordinate delay in releasing the securities or documents to the borrower on repayment of all dues.

• Levying of charges without adequate prior notice to the borrower or customer.

• Failure to provide legally enforceable built-in repossession clause in the contract or loan agreement.

• Failure to ensure transparency in the contract or loan agreement regarding (i) notice period before taking possession of security; (ii) circumstances under which the notice period can be waived; (iii) the procedure for taking possession of the security; (iv) provision of final chance to be given to the borrower for repayment of the loan before the sale or auction of the security; (v) the procedure for giving repossession to the borrower; and (vi) the procedure for sale or auction of the security.

• Non-observance of directions issued by the Reserve Bank to the NBFCs.

• Non-adherence to any of the other provisions of Reserve Bank Guidelines on Fair Practices Code for NBFCs.

3. The Ombudsman Scheme for Digital Transactions, 2019

The Reserve Bank of India had launched The Ombudsman Scheme for Digital Transactions on 31st January 2019. It is an expeditious and cost-free apex level mechanism for resolution and complaints regarding digital transactions undertaken by the customers of the System Participants as defined by the scheme.

Here are some of the areas of customer redressal available with the Digital Transactions Ombudsman mechanism:

• Prepaid Payment Instruments: Non-adherence to the instructions of the Reserve Bank of India by System Participants about Prepaid Payment Instruments on any of the following:

  • Failure in crediting merchant's account within a reasonable time.

  • Failure to load funds within a reasonable time in wallets or cards.

  • Unauthorised electronic fund transfer.

  • Non-Transfer or Refusal to transfer or delay/failure to transfer within a reasonable time, the balance in the Prepaid Payment Instruments to the holder's 'own' bank account or back to source at the time of closure, expiry of validity period etc., of the Prepaid Payment Instrument.

  • Failure to refund within reasonable time or refusal to refund in case of unsuccessful / returned / rejected / cancelled / transactions.

  • Non-credit or delay in crediting the account of the Prepaid Payment Instrument holder as per the terms and conditions of the promotions offer(s) from time to time, if any.

  • Non-adherence to any other instruction of the Reserve Bank on Prepaid Payment Instruments.

• Mobile or Electronic Fund Transfers: Non-adherence to the instructions of the Reserve Bank of India on Mobile or Electronic fund transfers by System Participants on any of the following:

  • Failure to effect online payment or fund transfer within a reasonable time.

  • Unauthorised electronic fund transfer.

  • Failure to act upon stop-payment instructions within the time frame and under the circumstances notified to the customers within the prescribed timeline.

  • Failure to reverse the amount debited from customer account in cases of failed payment transactions within the prescribed timeline.

  • Non-adherence to any other instruction of the Reserve Bank on Mobile or Electronic fund transfers.

• Non-adherence to instructions of the Reserve Bank or respective System Provider to System Participants, on payment transactions through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code on the following grounds:

  • Failure in crediting funds to the beneficiaries' account.

  • Failure to return within a reasonable time the payment to the originating member in case of failure to credit the funds to the beneficiary's account.

  • Failure or delay in refund of money back to account in case of transaction failure or declined transactions (i.e. failed transactions)

  • Non-adherence to any other instruction of the Reserve Bank on payment transactions or through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code.

• Non-reversal or delay/failure to reverse the funds that is wrongly transferred to the beneficiary account due to lapse at the end of System Participant.

• Any other matter relating to the violation of the directives including on fee or charges, if any, issued by the Reserve Bank of India in relation to digital transactions.

This article first appeared on PersonalFN here