Reserve Bank – Integrated Ombudsman Scheme (RB-IOS)

Ombudsman

• An ombudsman is an official of the government who deals with complaints made by ordinary citizens against public organizations. This concept originated in Sweden.
• It refers to an officer appointed by the Legislature to handle complaints against a service or administrative authority.
• Need for an ombudsman in an organisation:
  • Address concerns: Ombudsman gives an opportunity for the public to express their grievances against an organisation. This feedback will help in improving service to the public.
  • Impartial working: Ombudsman works in an impartial, confidential and independent manner. They function independently without the influence of the organisation.
  • Avoid duplication of work: The ombudsman can carry out a single investigation into multiple complaints about the same topic, which avoids duplication and excessive cost.
  • Streamlining complaints: Ombudsman will establish a procedure for taking and resolving complaints from the public.

The Integrated Ombudsman Scheme of the RBI

Launch

• The Reserve Bank – Integrated Ombudsman Scheme (RB-IOS) was launched in November 2021 after integrating three erstwhile ombudsman schemes of RBI.
• These included the Banking Ombudsman Scheme, 2006; the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and the Ombudsman Scheme for Digital Transactions, 2019.
• The scheme will also bring under its ambit Non-Scheduled Primary Co-operative Banks with a deposit size of Rs 50 crore and above.

Legality

RBI framed the scheme by exercising powers under:

• Section 35A of the Banking Regulation Act, 1949 (10 of 1949)
• Section 45L of the Reserve Bank of India Act, 1934 (2 of 1934)
• Section 18 of the Payment and Settlement Systems Act, 2007 (51 of 2007)

Objectives

• The scheme will provide cost-free redressal of customer complaints involving deficiency in services provided by entities regulated by RBI, which have not been resolved within a period of 30 days by the regulated entity.

Appellate Authority

• Executive Director-in charge of Consumer Education and Protection Department of RBI.

Filing Complaints Under the Scheme

• Visiting the website
• Through a dedicated email id
• Physical application directed to ‘Centralized Receipt and Processing Centre’ in Chandigarh
• Contacting a dedicated toll-free number

Features of the Scheme

• Category neutral: Complainant need not identify under which scheme he/she should file complaint with the Ombudsman.
• Narrowing grounds for rejection:  ‘Deficiency in service’ has been provided as the ground for filing a complaint, with a specified list of exclusions. Hence, complaints would no longer be rejected simply on account of “not covered under the grounds listed in the scheme”.
• Jurisdiction neutral: The scheme operates on a ‘One Nation One Ombudsman’ approach, making it jurisdiction neutral.
• Usage of technology: RBI will make use of Artificial Intelligence tools so that regulated entities and investigating agencies could coordinate in a better way in the fastest time possible.
• Representing regulated entity: 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.
• Single email id: Customers can file complaints, submit documents, track status, and give feedback through a single email address.
• Right to appeal: Regulated entity will not have the right to appeal against the order in cases where the ombudsman has ruled against it for not furnishing satisfactory and timely information/documents.

Significance of the Scheme

• Customer satisfaction: The ombudsman scheme is expected to enhance grievance redressal mechanism against RBI’s regulated entities and improve customer satisfaction.
• Uniform standards: The scheme will ensure uniformity and streamline user-friendly mechanisms across the country.
• Easy access to services: The integrated platform allows for easy lodging and tracking of complaints by customers. This will benefit bank customers from rural areas.

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