- The Reserve Bank of India (RBI) has announced that banks and non-banking financial companies (NBFCs) need to implement a fully automated complaints management system.
- This system should provide access to the Internal Ombudsman (IO) and the Deputy Internal Ombudsman (DIO).
- Any unresolved grievances must be automatically escalated to the IO’s office for review.
- According to the regulator, the IO should have a minimum of 10 days to review complaints that fall under the timelines set by the RBI, the National Payments Corporation of India, or card network guidelines.
- For all other complaints, a 20-day period from the date of receipt has been established.
The Reserve Bank of India (RBI) has announced that banks and non-banking financial companies (NBFCs) need to implement a fully automated complaints management system. This system should provide access to the Internal Ombudsman (IO) and the Deputy Internal Ombudsman (DIO). Any unresolved grievances must be automatically escalated to the IO’s office for review.
According to the regulator, the IO should have a minimum of 10 days to review complaints that fall under the timelines set by the RBI, the National Payments Corporation of India, or card network guidelines. For all other complaints, a 20-day period from the date of receipt has been established.
In the draft guidelines released on October 7, it was specified that complaints rejected by regulated entities must be transferred to the IO’s office within 20 days. For credit information companies, these complaints should be referred to the internal ombudsman within 25 days of being received.
The guidelines also state that the IO’s office should not accept complaints directly from the public. Instead, it should only handle complaints that have already been reviewed by the bank but were either partially resolved or completely rejected.
Banks are required to categorize complaints in their Complaint Management System as ‘fully resolved’, ‘partially resolved’, or ‘wholly rejected’ before escalating them to the IO’s office.
Additionally, banks must ensure that the final decision regarding a complaint is communicated to the complainant within 30 days of receiving the complaint. These regulations will apply to banks with 10 or more branches in India as of March 31, 2025.
RBI emphasized that a complaint should not be closed by the same branch, unit, or other contact points, regardless of whether it has been resolved (fully or partially) or rejected.
The regulator has made it clear that complaints about corporate fraud, misappropriation, and similar issues involving the bank, which don’t affect customers in any way, won’t fall under the jurisdiction of the Internal Ombudsman (IO).
The final guidelines are designed to enhance oversight at the board level, assigning responsibilities to the Customer Service Committees (CSCs) of banks’ boards. These responsibilities include deciding on the number of Internal Ombudsmen and Deputy Internal Ombudsmen. Additionally, management can only override the IO’s decision with the approval of a competent authority, such as a whole-time or executive director.
The RBI stated, “All cases where the internal ombudsman’s decision has been overturned by the competent authority must be presented to the CSC of the bank’s Board for review.”
Moreover, the RBI has introduced a comprehensive quarterly reporting requirement and has given itself the authority to review cases where customers have succeeded before the RBI Ombudsman after a bank has rejected the IO’s recommendation.
For Non-Banking Financial Companies (NBFCs), these final guidelines apply only to deposit-taking NBFCs with 10 or more branches and non-deposit-taking NBFCs that have an asset size of ₹5,000 crore or more and a public customer interface as of March 31, 2025. Certain categories, such as housing finance companies, core investment companies, infrastructure finance entities, and NBFCs undergoing insolvency or liquidation, have been excluded from these guidelines, unlike the earlier draft.
The central bank has also extended these guidelines to other regulated entities, including small finance banks, payments banks, non-bank prepaid payment issuers, and credit information companies.