Reserve Bank tightens ombudsman scheme

Reserve Bank tightens ombudsman scheme

News:

1. RBI has taken steps to strengthen the grievance redressal mechanism for customers.

Important Facts:

2. Reserve Bank of India has tightened the Banking Ombudsman Scheme 2018.

3. Under the scheme the following recommendation were made with respect to customer:

• Commercial banks having 10 or more banking outlets to have an independent internal ombudsman (IO) to review customer complaint.
• Ombudsman will examine customer complaint in case of deficiency in services provided by bank.
• However instructions are not applicable for Regional Rural Banks.
• Bank to escalate the caseto Internal Ombudsman before giving final decision to complainant (IO)
• Customer may not need to approach directly to IO

4. Features of the scheme includes:

• It will provide appointment/tenure, roles and responsibilities, procedural guidelines and oversight mechanism.
• Fixed term from three to five years for Ombudsmanwhich cannot be renewed.
• IOs can only be removed by RBI.

5. The implementation of IO Scheme 2018 will be monitored by the bank’s internal audit mechanism apart from RBI.