RBI to introduce ombudsman scheme for NBFCs to bolster complaint redressal

In order to improve complaint redressal in finance companies, the Reserve Bank of India (RBI) will introduce the Internal Ombudsman Scheme (IOS) for NBFCs having a higher customer interface.

Detailed instructions in this regard (IOS scheme) will be issued separately, the RBI said in a statement on developmental and regulatory policies.

RBI said the IOS for NBFCs will be on the lines of IOS for banks and non-bank payment system participants. The finance companies will appoint an ombudsman in addition to the grievance redressal mechanism to examine complaints about deficiency in service.

The finance companies have played an important role in extending finance to niche sectors such as MSME, microfinance, housing, vehicle finance. They have effectively complemented the efforts of banks through last mile financial intermediation.

The increased significance, strength and reach of NBFCs across the country has necessitated better customer experience including grievance redress practices.

Over the last few years, RBI has taken steps for consumer protection and grievance redressal for customers. Some of

RBI's initiatives for customer care include requiring NBFCs to appoint nodal officers for grievance redressal (2013) and the launch of the ombudsman scheme for NBFCs (2018).

Several NBFCs have also successfully adopted the digital mode to support the delivery of their financial products and services to a wide spectrum of customers, it added.