RBI issues directions on Internal Ombudsman rules for banks, NBFCs

The Reserve Bank of India (RBI) on Friday released a master direction on the Internal Ombudsman norms for banks and big NBFCs to harmonise the instructions applicable to various regulated entities on the Internal Ombudsman (IO) mechanism.

“These instructions are expected to further strengthen the IO mechanism and in turn, the Internal Grievance Redress system in regulated entities apart from providing ease of compliance,” the RBI said in a release.

The directions are aimed at bringing in uniformity in matters such as timeline for escalation of complaints to the IO, exclusions from escalating complaints to the IO, minimum qualifications for appointing the IO and updating of reporting formats.

They also provide for the new post of Deputy Internal Ombudsman.

The RBI said the directions apply to banks and non-banking finance companies (NBFC), which will include deposit-taking NBFCs (NBFCs-D) with 10 or more branches; non-deposit taking NBFCs (NBFCs-ND) with asset size of Rs 5,000 crore and above and having public customer interface.