RBI- Integrated Ombudsman Scheme

Context: The Reserve Bank of India (RBI) recently released the Annual Report of the Ombudsman Schemes.

Key highlights of the report:

• The volume of complaints received under the Reserve Bank of India’s ombudsman schemes and consumer education and protection cells stood at 4,18,184 in 2021-22, an increase of 9.39 per cent compared to the previous year.
• In the fiscal year ended March 31, 2021, close to 3,82,292 complaints were received.
• According to the annual report, Of the total complaints received in 2021-22, about 42 per cent were related to the digital modes of payment and transactions.

About Ombudsman:

• A government official who deals with complaints made by ordinary people against public organizations.
• This concept of Ombudsman arrived from Sweden.
• It means an officer appointed by the Legislature to handle complaints against a service or administrative authority.
• In India an Ombudsman is appointed to resolve grievances in the following sectors.
  • Insurance Ombudsman
  • Income Tax Ombudsman
  • Banking Ombudsman

About Integrated Ombudsman Scheme:

• The Scheme was framed by the Reserve Bank in exercising the powers conferred on it under Section 35A of the Banking Regulation Act, 1949.
• The Scheme integrates the existing three Ombudsman schemes of RBI namely,
  • the Banking Ombudsman Scheme, 2006;
  • the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and
  • the Ombudsman Scheme for Digital Transactions, 2019.
• In addition to integrating the three existing schemes, the Scheme also includes under its ambit Non-Scheduled Primary Co-operative Banks with a deposit size of ?50 crore and above.
• The Scheme adopts the ‘One Nation One Ombudsman’ approach by making the RBI Ombudsman mechanism jurisdiction neutral.
• According to the central bank, the internal ombudsman shall be either a retired or a serving officer, not below the rank of deputy general manager or equivalent in any financial sector regulatory body, credit information companies, a non-banking financial company (NBFC) or bank.
• He/she should possess necessary skills and experience of at least seven years in banking, non-banking finance, financial sector regulation or supervision, credit information, or consumer protection.

Some of the salient features:

• A Centralised Receipt and Processing Centre has been set up at RBI, Chandigarh for receipt and initial processing of physical and email complaints in any language.
• The responsibility of representing the Regulated Entity and furnishing information in respect of complaints filed by customers against the Regulated Entity would be that of the Principal Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent.
• The Regulated Entity will not have the right to appeal in cases where an Award is issued by the ombudsman against it for not furnishing satisfactory and timely information/documents.
• RBI’s Executive Director-in charge of Consumer Education and Protection Department would be the Appellate Authority under the integrated scheme.

Source: Indian Express

Previous Year Question

Q.1) With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct? (2022)

1. The Governor of RBI is the Chairman of BBB.
2. BBB recommends for the selection of heads for Public Sector Banks.
3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.

Select the correct answer using the code given below:

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3