Mumbai, Oct 1 (IANS) Reserve Bank Governor Sanjay Malhotra announced on Wednesday that in order to enhance consumer protection, the RBI has decided to equip Internal Ombudsman (IO) of banks with compensation powers and allow them access to the complainant, aligning the role of IOs more closely with that of the RBI Ombudsman.

The Reserve Bank has institutionalised the Internal Ombudsman (IO) mechanism in select Regulated Entities (REs) such as banks and NBFCs which enables an independent apex level review of complaints that are being rejected by the RE. The step to give more mower to the Internal Ombudsman will further improve upon the efficacy of this mechanism.

Additionally, a two-tiered structure may be introduced within REs for grievance redress prior to escalation to the IO. These measures aim to provide meaningful and timely resolution of customer grievances within the REs, thereby improving service standards and consumer confidence. A draft of the Master Direction, outlining these revisions, is being released shortly for public feedback, the RBI Governor said.

The Reserve Bank – Integrated Ombudsman Scheme (RB-IOS) (the Scheme), 2021 launched on November 12, 2021, provides customers of Regulated Entities (REs) a speedy, cost-effective and expeditious alternate grievance redress mechanism.

The REs currently covered under the Scheme include Commercial Banks, Regional Rural Banks, Scheduled Primary (Urban) Co-operative Banks, Non-Scheduled Primary (Urban) Co-operative Banks with deposits size of ₹50 crore and above, select Non-Banking Financial Companies and Credit Information Companies, Malhotra further states.

To enable the customers of the rural co-operative banks to access the mechanism of RBI Ombudsman, it has been decided to bring State Co-operative Banks and District Central Cooperative Banks, hitherto with NABARD, within the scope of the RBI Ombudsman Scheme. A notification will be issued shortly in this regard.

Moreover, based on the operational experience, stakeholder feedback, and global best practices, the Reserve Bank has undertaken a comprehensive review of the scheme.

The review seeks to enhance clarity, simplify procedures and reduce timelines to further improve timely, fair, and effective redress. The draft scheme shall be placed on the Reserve Bank’s website shortly for seeking feedback from stakeholders, he added.

–IANS

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