Ombudsman scheme for deposit-taking NBFCs comes into effect

Our Bureau The Reserve Bank of India has issued a notification stating that its Ombudsman Scheme for deposit-taking Non-Banking Financial Companies, to provide a cost-free and expeditious complaint redressal mechanism for deficiency in services, came into effect on Friday.

Any person can file a complaint with the Ombudsman on grounds of: non-payment or inordinate delay in the payment of interest on deposits; non-adherence to RBI directives, if any, applicable to rate of interest on deposits; non-repayment or inordinate delay in the repayment of deposits.

Some of the other grounds on which a person can file a complaint include 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/terms and conditions of sanction in vernacular language or a language as understood by the borrower.

The Ombudsman will also take up complaints against NBFCs relating to failure or refusal to provide adequate notice on proposed changes being made in sanctioned terms and conditions in vernacular language as understood by the borrower; failure or inordinate delay in releasing the securities documents to the borrower on repayment of all dues; levying of charges without adequate prior notice to the borrower/customer.

The offices of the NBFC Ombudsmen will function at four metro centres — Chennai, Kolkata, Mumbai and New Delhi and will handle complaints of customers in the respective zones. Based on the experience gained, the RBI would extend the scheme to cover NBFCs having asset size of ₹100 crore and above with customer interface.

The Ombudsman will not entertain a complaint unless: the NBFC had rejected a customer’s written complaint or the complainant had not received any reply within a period of one month after the NBFC received his representation or the complainant is not satisfied with the reply given to him by the NBFC; the complaint is made not later than one year after the complainant has received the reply of the NBFC to his representation.

The RBI said it will be the obligation of the NBFC concerned to implement the settlement arrived with the complainant or the Award passed by the Ombudsman when it becomes final and send a report in this regard to it within 15 days of the award becoming final.

In the event of non-implementation of settlement or the Award, the complainant may represent to the Reserve Bank and the latter may initiate such action under the provisions of Reserve Bank of India Act, 1934 as it deems fit.

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