Final decision on customer complaints should be communicated in 30 days: RBI tells Banks, NBFCs

Regulated entities (REs) and their Internal Ombudsmen (IOs) should ensure that a final decision is communicated to customers within a period of 30 days from the date of receipt of complaint, RBI said.

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This directive is aimed at improving consumer grievance redress within the regulated entities, besides improving customer service standards.

Further, REs (banks, Non-Banking Financial Companies, Non-bank System Participants and Credit Information Companies) may appoint one or more Internal Ombudsman (IO) and Deputy Internal Ombudsman (DIO) depending on the volume of complaints received by them.

IOs usually deal with customer complaints related to deficiency in service.

In its Master Direction on “Internal Ombudsman for Reglated Entities”, RBI said a RE should establish a fully-automated Complaints Management Software wherein all complaints that are partly or wholly rejected by the RE’s internal grievance redress mechanism are auto-escalated to the IO within 20 days of receipt for a final decision.

The IO and RE have to ensure that the final decision is communicated to the complainant within a period of 30 days from the date of receipt of complaint by the regulated entity.

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REs have to provide “read-only” access to their Complaint Management Software so that all complaints are accessible to the IO who will follow up cases of delayed escalation with the concerned department in the RE.

The RE should also provide access to the IO in its Complaint Management Software, for adding his / her decisions on complaints escalated to the Internal Ombudsman.

The regulated entity has to furnish all records / documents sought by the Internal Ombudsman to enable him / her to redress / resolve customer grievances expeditiously, per the Directions.

The decision of Internal Ombudsman will be binding on the regulated entity, except in cases where the latter has obtained approval for disagreeing with such decision.

Where the IO upholds the decision of the RE to reject or partly reject a complaint, the reply to the complainant has to explicitly state the fact that the complaint has been examined by the IO and for the reasons stated in the reply, the decision of the RE has been upheld.

Where the Internal Ombudsman overrules the decision of the regulated entity to reject or partly reject the complaint, the reply to the complainant shall explicitly state the fact that the complaint was examined by the IO and the decision of the RE was overruled by the former in favour of the complainant. However, the RE, with the approval of the Competent Authority, has disagreed with the decision of the Internal Ombudsman.

RBI said the IO/DIO, whose appointment in a RE is of a contractual nature, should not be over 70 years of age before the completion of the tenure.

The tenure of the IO / DIO in the regulated entity has to be a fixed term of not less than three years, but not exceeding five years. Further, they are not be eligible for reappointment or for extension of term in the same regulated entity.

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