On November 12, the Reserve Bank of India (RBI) launched its Retail Direct Scheme and Integrated Ombudsman Scheme (the Scheme).
On the lines of “One Nation- One Ombudsman”, the Scheme integrates three existing Ombudsman schemes of the RBI – the Banking Ombudsman Scheme, 2006; the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and the Ombudsman Scheme for Digital Transactions, 2019. The Scheme will be effective from November 12, 2021.
The Scheme provides jurisdiction neutral cost-free redressal of consumer complaints which involves deficiency of services offered by the regulated entities.
Importance: Till now, the RBI had three separate ombudsman schemes. With the integrated Ombudsman scheme, it is easy for a complainant to raise a grievance with the Ombudsman without worrying about the specific Ombudsman scheme within which it would have to file a complaint, the jurisdiction of the Ombudsman amongst other specific requirements laid down in three different schemes. In nutshell, the Integrated Ombudsman Scheme offers a single platform for grievance redressal against regulated entities like banks, payment system operators and the Non-Banking Financial Services (NBFCs).
Key features of the Scheme include:
- Applicability of the Scheme: The Scheme is applicable on regulated entities (REs) by the RBI. It also extends to Non-Scheduled Primary Co-operative Banks with a deposit size of Rs. 50 crore and above.
Grounds to file complaint: The Scheme defines “deficiency in service” as a ground to file a compliant with specific list of exclusions with certain exceptions. To file a complaint with the RBI, the complainant has to:
- Make a written complaint with the RE which was
- unanswered within 30 days after the RE received the complaint;
- was rejected wholly or partly by the RE;
complaint is made to the Ombudsman within one year after receiving reply from the RE or within one year and thirty days of no response from the RE.
- Make the complaint in consonance with the limitation period as defined under the Limitation Act, 1963;
- Cause of action of complaint is not same as the one pending with/already settled by the Ombudsman or has already been adjudicated upon by any court, tribunal, arbitrator or forum.
However, complaints pertaining to matters involving commercial judgment or decision of RE, dispute between a vendor and a RE, dispute between the REs, grievance not addressed by Ombudsman directly amongst other grounds are not maintainable within the ambit of the Scheme.
- Jurisdiction of ombudsman office: The Scheme has done away with the jurisdiction of each ombudsman office. Instead, Clause 4 of the Scheme states that the Ombudsman shall sit at places as specified by the RBI.
- Central Receipt and Processing centre: The RBI has set up a centralised receipt and processing centre in Chandigarh as required by Clause 6 of the Scheme.
- Resolution of complaints: The Scheme suggests alternative dispute resolution (ADR) mechanisms for dispute resolution such as mediation, facilitation or conciliation. The Scheme empowers the Ombudsman to pass an ex parte order in case of non-response by the RE.
- Right to appeal by Regulated entity: The Scheme bars any RE from appealing against an award issued for non-furnishing of documents. An appeal can be filed against the award by either parties within 30 days of receipt of communication of award or closure of the complaint.
- Amount in a dispute: Per the Scheme, there is no bar on the amount for which the Ombudsman can pass an award. However, for consequential loss, there is a ceiling amount of Rs. 20 lakh specified in the Scheme.
- Awareness of the Scheme: The Scheme requires REs to display salient features of the Scheme for knowledge of the public on their respective websites/branches/places along with the details of the Principal Nodal Officer.
The complaints with the Ombudsman can be filed online through https://cms.rbi.org.in .These complaints can be submitted in electronic and physical mode.We are closely tracking the developments in Digital Payments space and FinTech regulation. To get in touch, kindly write to firstname.lastname@example.org