The Reserve Bank of India (RBI) logo is displayed on a gate outside the central bank’s headquarters in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

RBI Directs Banks With Over 10 Branches To Have An Internal Ombudsman

The Reserve Bank of India today asked all scheduled commercial banks with more than 10 branches to appoint an internal ombudsman. The apex bank has excluded regional rural banks from its directive.

The internal ombudsman scheme was introduced by RBI to strengthen the internal grievance of banks and to ensure that the complaints of the customers are redressed. In order to further enhance the independence of the internal ombudsman and to strengthen the monitoring system, the central bank said it has reviewed the arrangement in the form of the ‘Internal Ombudsman Scheme, 2018’.

The Internal Ombudsman shall examine customer complaints which are in the nature of deficiency in service on the part of the bank,that are partly or wholly rejected by the bank.
RBI Press Release

The scheme covers, appointment, tenure, roles and responsibilities, procedural guidelines and oversight mechanism for the internal ombudsman.

The central bank further said as the banks shall internally escalate all complaints, the customers need not approach the internal ombudsman directly. The implementation of scheme will be monitored by the bank’s internal audit mechanism apart from regulatory oversight by the RBI itself.

In May 2015, the RBI had advised all public sector and select private and foreign banks to appoint an internal ombudsman as an independent authority to review complaints that were partially or wholly rejected by the respective lenders.