RBI tells banks to empower Internal Ombudsmen to redress customer grievances
Mumbai, July 13
The Reserve Bank of India on Monday asked banks to empower their Internal Ombudsmen mechanism to strengthen customer service and redress grievances speedily in order to avoid external escalation of cases.
Addressing the third annual conference of Internal Ombudsmen (IO) of banks and NBFCs here, RBI Deputy Governor Swaminathan J. exhorted the internal ombudsmen to provide a meaningful, fair, and effective resolution of customer complaints.
The Deputy Governor also requested the IOs to identify recurring issues, undertake root cause analysis, and help implement remedial measures. He added that an effective IO mechanism should reduce external escalation and urged Boards and senior management to empower the IO mechanism and use its insights to strengthen customer service and grievance redress.
The Internal Ombudsman serves as the final independent level of review within a regulated entity for customer complaints that have not been fully resolved, before the customer approaches the RBI Ombudsman or another external forum.
The conference brought together IOs from across a representative spectrum of regulated entities, including banks, non-banking financial companies (NBFCs), credit information companies (CICs) and other regulated entities, along with the Managing Directors and Chief Executive Officers, Executive Directors in charge of customer service, Principal Nodal Officers as well as RBI Ombudsmen and senior officials of the Reserve Bank.
The Conference sessions covered recent grievance redress, regulatory expectations, and RBI Ombudsman insights, focusing on faster, higher quality resolutions and systemic improvements to prevent avoidable escalations.
RBI Executive Director Sonali Sen Gupta interacted with the participants during an open-house session to exchange views on further enhancing the effectiveness of the IO framework.
Under the RBI's scheme, the Ombudsman shall receive and consider complaints relating to the deficiencies in banking or other services filed on the grounds mentioned in Clause 8 irrespective of the pecuniary value of the deficiency in service complained and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the bank concerned and the aggrieved parties or by passing an Award as per the provisions of the Scheme.
— IANS
Reader Comments
Good initiative but will it actually work on the ground? In my experience, customer care people just pass the buck. Making IOs independent and accountable is key. Also, they should accept complaints in regional languages—not everyone is comfortable with English.
I've dealt with banking complaints in multiple countries, and this sounds like a good step forward. The root cause analysis part is crucial—if banks understand why complaints happen, they can prevent them. Hope this isn't just another layer of bureaucracy.
Finally! Banks have been getting away with poor service for too long. I had an issue with a wrong deduction last year and it took 3 months to resolve. If IOs can handle these within days or weeks, that will be a game changer. Let's see how serious the banks are.
Interesting approach. In the US, we have the Consumer Financial Protection Bureau for escalations, but internal ombudsmen can help resolve issues faster. The key will be whether these IOs truly have independence from bank management. Respectful criticism: hope the selection process is transparent.
This is good news for common people like us. Most of us don't have time or resources to fight with banks. I hope the IOs also focus on rural branches where people face even more issues. Banking should be accessible and fair for everyone, not just urban customers. 🌟
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.