Personal Finance

5 changes in the ombudsman scheme

Keerthi Sanagasetti BL Research Bureau | Updated on November 20, 2021

Now, a single point of contact for customers against all grievances with expanded scope

The RBI recently launched an integrated ombudsman to strengthen the existing grievance redressal mechanism for consumers of banks, NBFCs and payment system operators. Here are five things that have changed for consumers relating to the ombudsman scheme.

Single-window coverage

Earlier customers had to approach either the Banking Ombudsman, Ombudsman for NBFCs, or the Ombudsman for Digital Transactions, depending upon who they wished to raise complaints against -- whether they were grieved by a bank, NBFC or Non-bank System Participants (such as issuers of Pre-Paid Instruments). But now under the integrated ombudsman scheme, the earlier three ombudsman schemes have been unified into one.

Customers can now complain against any covered financial institution on the portal (https://cms.rbi.org.in), or email to (crpc@rbi.org.in) or send physical complaints to Centralised Receipt and Processing Centre of the RBI at Chandigarh, in a prescribed format. Additionally, a contact centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalized in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course. The contact centre will provide information or clarifications regarding the alternate grievance redress mechanism of RBI and guide customers in filing a complaint.

Besides Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above have been added to the ambit of the integrated ombudsman now. The earlier schemes covered only all scheduled commercial banks, regional rural banks and scheduled primary co-operative banks (under the Banking ombudsman Scheme), all deposit taking NBFCs and non-deposit taking NBFCs with an asset size of ₹100 crore and above (under the Ombudsman Scheme for NBFCs) and non-bank system participants regulated by the RBI (under the Ombudsman for Digital Transactions).

Uniform jurisdiction

Hitherto customers were required to file their complaints under the correct scheme and with the correct ombudsman’s office, based on the territorial jurisdiction with reference to the branch of the entity being complained against, failing which the complaint would be rejected. Now apart, from integrating the schemes across regulated entities, the RBI has also done away with the jurisdiction of each ombudsman office.

The receipt of all complaints and initial processing shall be centralized at the office at Chandigarh, to impart efficiency in the process. The integrated ombudsman shall from now on act as a single point of contact for the aggrieved customer, compared to the erstwhile territorial and scheme based jurisdiction which was a usual ground for rejection of claims.

Wider grounds of complaint

Earlier the separate ombudsman schemes specified certain deficiencies in services, on which customers could lodge complaints with the ombudsman. With limited grounds of complaints specified, one could not complain against any grievance not listed under the erstwhile schemes. Now the integrated scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions ( such as dispute between regulated entities or one involving an employer- employee relationship, or relating to any service not within the purview of the RBI). Henceforth, complaints would no longer be rejected simply on account of not being covered under the grounds listed in the scheme. Customers can now through the integrated scheme, seek redressal for any deficiency in service, if the same is not resolved to the satisfaction of the customer or not replied to, within a period of 30 days by the regulated entity.

No differential compensation

The erstwhile ombudsman schemes had specified limits on the compensation provided to the complainant. The Award under the schemes were limited to the amount arising directly out of the act or omission of the regulated entity or ₹20 lakh (in the case of banks or non-bank system participant), whichever is lower. The said limit was lower at ₹10 lakh in the case of the covered NBFCs, under the Ombudsman Scheme for NBFCs.

This differential treatment has now been streamlined under the integrated scheme. Now on, for any consequential loss suffered by the complainant, the Ombudsman shall have the power to provide a compensation up to ₹20 lakh. That apart, up to ₹1 lakh can also be awarded for the loss of the complainant’s time, expenses incurred and for harassment/mental anguish suffered by the complainant, as was available in the erstwhile schemes.

Appeal

The ombudsman schemes permitted customers to appeal against the award of an ombudsman or for the rejection of a complaint, to the appellate authority within 30 days. The appellate authority was vested with the Deputy Governor of the RBI in charge of the department implementing the erstwhile schemes.

Now under the integrated scheme, customers can file the appeal using the same portal. That apart, from now on the Executive Director in-Charge of the department of the RBI administering the Scheme, shall be the Appellate Authority.

Published on November 20, 2021

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