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RBI Mandates Internal Ombudsmen for Banks, NBFCs to Resolve Customer Grievances

The Reserve Bank of India has issued final guidelines mandating the appointment of internal ombudsmen by regulated entities like banks and NBFCs. This framework aims to strengthen internal grievance redressal by enabling an apex-level review of complaints that were partially resolved or rejected. The ombudsman must be a senior officer with at least seven years of experience in relevant financial sectors. These directions, which incorporate feedback from a draft issued in October 2025, will now form part of the RBI's supervisory review process.

Key Points: RBI Issues Internal Ombudsman Guidelines for Banks, NBFCs

  • Apex-level review of complaints
  • Applies to banks, NBFCs, PPI issuers
  • IO must have 7+ years financial experience
  • Part of RBI supervisory review
  • Final rules incorporate public feedback
2 min read

RBI issues norms for internal ombudsman in banks, NBFCs

RBI mandates internal ombudsmen in banks & NBFCs for faster customer grievance resolution. New guidelines detail appointment & complaint review.

"strengthening the internal grievance redress mechanism... ensuring a speedy and meaningful resolution of customer complaints - RBI"

Mumbai, Jan 14

The Reserve Bank of India on Wednesday issued guidelines for the appointment and functioning of internal ombudsmen in banks and NBFCs, aimed at strengthening the mechanism for resolution of customer grievances.

The RBI has issued separate directions for commercial banks, small finance banks, payments banks, non-banking financial companies, non-bank prepaid payment instrument issuers, and credit information companies to ensure specific clarity to each category.

The directions have been issued with a view to strengthening the internal grievance redress mechanism within regulated entities and ensuring a speedy and meaningful resolution of customer complaints by enabling a review by an apex-level authority within the entities, the apex bank said.

The guidelines state that in order to be eligible for appointment as internal ombudsman, the candidate shall either be a retired or serving officer, in the rank equivalent to a General Manager in the regulated entity of the Reserve Bank under the purview of the internal ombudsman framework or a financial sector regulatory body, having necessary skills and experience of minimum seven years of working in areas such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information or consumer protection.

Every regulated entity should appoint at least one internal ombudsman, the RBI said.

It should deal with the complaints that have already been examined by the regulated entity but have been partially resolved or wholly rejected.

"The areas relating to customer service and customer grievance redress, as well as the implementation of these directions, shall be a part of the supervisory review by the Department of Supervision of the Reserve Bank," the RBI statement said.

The Reserve Bank of India had on October 07, 2025, issued the draft Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2025, seeking feedback from the stakeholders and the public.

The feedback received on the draft Master Direction has been examined, and necessary modifications have been suitably incorporated in the final Master Direction, the RBI statement added.

- IANS

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Reader Comments

P
Priya S
Good initiative, but the proof will be in the implementation. Will these ombudsmen truly be independent, or will they be influenced by the bank management that appoints them? The guidelines say they review complaints already rejected by the bank. I hope they have the power to overturn unfair decisions.
R
Rohit P
Finally! I had a terrible experience with my NBFC last year over a hidden charge. Their grievance cell was useless. This system, if implemented properly, could save customers like me a lot of time and frustration before we have to go to the external banking ombudsman.
A
Anjali F
The requirement of 7 years experience in relevant areas is crucial. We need people who understand the technicalities of banking and finance, not just any retired officer. This should improve the quality of grievance redressal. A step in the right direction for consumer protection.
M
Michael C
As someone who works in the financial sector here, I appreciate that RBI sought stakeholder feedback. Incorporating public suggestions into the final directive shows a consultative approach. The key will be ensuring all entities, especially smaller NBFCs, comply effectively.
K
Kavya N
While the intent is good, I have a respectful criticism. The process still seems internal. What about transparency? Will the decisions of these internal ombudsmen be made public in some anonymized form? That would build more trust and hold everyone accountable.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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