RBI to introduce Internal Ombudsman Scheme

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The internal ombudsman at NBFCs will examine customer complaints associated with a deficiency in a commission that has been partly or wholly rejected by the NBFCs.

While keeping the key policy rates unchanged in its bi-monthly monetary policy review meeting on Friday, the banking concern of India announced the introduction of the inner Ombudsman Scheme (IOS) sure as shooting categories of NBFCs.

“The increased strength and reach of NBFCs across the country has necessitated various measures by the banking concern for the cover of consumers of NBFCs.

To further strengthen the interior grievance redress mechanism of NBFCs, it’s been decided to introduce the interior Ombudsman Scheme (IOS) for sure categories of NBFCs having higher customer interface,” the RBI stated.

The number of NBFCs and therefore the scope of services they’re providing is on the increase. As a result, the amount of customer grievances that need redressal is additionally on the increase.

“This step will simplify the grievance redressal mechanism within the NBFCs and improve the standard of services, which successively will have a major impact in boosting consumer confidence,” added Shetty.

Rajesh Sharma, administrator, Capri Global Capital Ltd, said, “Permitting banks to on-lend through NBFCs that specialize in priority sector would give an impetus to proportion their business without fear about financial destitution. Moreover, the introduction of the inner Ombudsman Scheme (IOS) sure as shooting categories of NBFCs that have higher customer interface may be a much-needed step because it will reduce the effort for patrons in choosing the proper ombudsman.”

To strengthen the inner grievance redress mechanism of select NBFCs, RBI has introduced Internal Ombudsman Scheme.

The Federal Reserve Bank of India on Friday said it’s decided to introduce the interior Ombudsman Scheme sure enough categories of non-banking financial companies (NBFCs) having a higher customer interface to strengthen the inner grievance redress mechanism of NBFCs.

NBFCs have played a vital role in extending finance to niche sectors like MSME, microfinance, housing, vehicle finance and have effectively complemented banks’ efforts through last-mile financial intermediation.

Many NBFCs have also successfully adopted digital modes to support the delivery of economic products and services to a large spectrum of shoppers, the financial institution said in an exceedingly statement following the monetary policy review.

Over the previous few years, RBI has initiated various measures for consumer protection and grievance redress for patrons of NBFCs, which include requiring NBFCs to appoint Nodal Officers for grievance redress (2013) and also the launch of the Ombudsman Scheme for NBFCs (2018).

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