Integrated Ombudsman Scheme

Posted On - 20 September, 2022 • By - Sheetal Agarwal

The Banking Ombudsman Scheme is a quick and affordable forum for bank customers to resolve complaints regarding particular services provided by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI to prevent the affairs of any banking company from being conducted in a manner prejudicial to the interests of the depositors or to the interests of the banking company or to secure the proper management of any banking company.

The Reserve Bank of India (RBI) introduced the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS) – 2021 as a single-point resolution mechanism to ensure quick resolution of customer complaints against regulated entities (REs). As the formal banking system becomes more accessible to the general public through financial inclusion programs and as the financial system becomes more digital, it is essential to institutionalize an increasingly effective grievance redressal mechanism to boost user confidence and shield them from procedural delays, technological obstacles, and untrained staff members. With the growing customer base, robust systems must be developed to create an effective financial system.

A huge number of small and large borrowers who were having trouble getting adjustments made to the rating information were greatly relieved when the RBI included Credit Information Companies (CICs) inside the ambit of RB-IOS. The scheme covers the following:

  • All Commercial Banks, Regional Rural Banks, Scheduled Primary (Urban) Co-operative Banks and Non-Scheduled Primary (Urban) Co-operative Banks with deposits size of INR 50 crore and above as on the date of the audited balance sheet of the previous financial year.
  • All Non-Banking Financial Companies (excluding Housing Finance Companies) which (a) are authorized to accept deposits; or (b) have a customer interface, with an assets size of Rupees 100 crore and above as on the date of the audited balance sheet of the previous financial year.
  • all System Participants as defined under the Scheme.

As per the Notification in August 2022, the Reserve Bank of India directs that the “Credit Information Company” as defined in the Credit Information Companies (Regulation) Act, 2005, shall also be treated as a “Regulated Entity” for the purpose of the Scheme because it is in the public interest to do so and to provide a means for free alternate grievance redress to customers of regulated entities covered under the RBIOS 2021 (the Scheme).

The amendment in the Scheme will have come into force with effect from September 1st 2022.