Wednesday, Nov 30, 2022

How RBI Integrated Ombudsman Scheme Will Help Customers

The RBI Integrated Ombudsman scheme is based on ‘One-Nation Ombudsman’ with one portal, one email, and one address for the customers to lodge their complaints. Know what this scheme entails and how it can help redress the grievances of bank customers.

Prime Minister Narendra Modi launched two customer-centric innovative schemes on November 12 under the Reserve Bank of India (RBI) – Retail Direct Schemes for retail investors and the Integrated Ombudsman Scheme.

Let’s understand what the Banking Ombudsman Scheme is and how it can help banking customers.

Banking Ombudsman Scheme 2006

The Banking Ombudsman Scheme (BOS) was first introduced in 2006. It was updated in July 2017. As per the RBI site, the BOS is an efficient forum for bank customers for the resolution of complaints related to certain services rendered by the banks. The BOS was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995. At present, the BOS 2006 (as amended up to July 1, 2017) is in operation.

Who Is A Banking Ombudsman?

The Banking Ombudsman is a senior official appointed by RBI to redress customer complaints against deficiency in certain banking services covered under the grounds of complaint specified under Clause 8 of the Banking Ombudsman Scheme 2006 (As amended up to July 1, 2017).

Integrated Banking Ombudsman Scheme

Integrated Banking Ombudsman Scheme, launched on Friday, helps in improving the grievance redress mechanism for resolving customer complaints against RBI’s regulated entities.

The scheme is based on ‘One-Nation Ombudsman’ with one portal, one email, and one address for the customers to lodge their complaints, according to the PMO. At present, there are separate Ombudsmen for banks, non-banking finance companies (NBFCs), and non-bank prepaid payment issuers (PPIs) that are wallets.

RBI operates this from across 22 Ombudsman offices located across the country. They will be integrated into one centralised scheme to make the grievance redressal process simpler and more efficient.

What It Means For Bank Customers

“It is an extremely welcome move as it puts in place a robust mechanism driving simplicity and transparency for complaints redressal and dispute resolution. The Ombudsman Scheme will go a long way in enhancing customer confidence as it will effectively address grievances on fraud and failure of payment related to pre-paid instruments (PPIs), including cards and digital wallets,” says Anand Kumar Bajaj, founder and CEO, PayNearby, a fintech company.

With the growing prominence of digital payments, we are witnessing rapid growth of high-volume, low-value transactions especially on platforms such as UPI and AePS. “While the pandemic brought about a huge shift towards digitalisation, technical declines and transactional failures have also become rampant and can be as high as 40 per cent,” adds Bajaj. The ombudsman scheme may come to the rescue of customers in such cases.

Additionally, in semi-urban and rural India where lack of network connectivity too poses a challenge in the form of rejected payments, a grievance redressal mechanism will promote customer confidence in the country’s digital infrastructure, especially among the marginalised and the rural populace.

As we progress as a digital-first nation, such measures at a national level will significantly aid in the permeation of digital payments and bring about transformational changes at a national level.