RBI monetary policy: More autonomy for internal ombudsman

The Reserve Bank of India (RBI) announced that the internal ombudsman (IO) scheme will be strengthened and extended to all scheduled commercial banks that have 10 banking outlets or more, excluding rural regional banks. 

“The revised scheme seeks to enhance the independence of the IO scheme and reinforce the oversight on implementation, for further improving the quality of customer service within the bank,” said M K Jain, deputy governor, RBI. The central bank said that the revised instructions will be issued by end of September 2018. 

The RBI set up the IO scheme with a view to strengthening of internal grievance redressal mechanism in banks to “minimise the need for customers to approach other forums for redressal”. 

“Keeping in view the rising customer base and fast-paced growth of digital transactions, banks have the option to appoint more than one internal ombudsman, depending on their assessment of volume and nature of complaints,” said Jain. In 2015, the RBI had asked all public sector banks and select private sector and foreign banks namely ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Standard Chartered Bank, Citibank and HSBC to appoint an IO. 

The RBI introduced the Banking Ombudsman Scheme in 1995 to provide an expeditious and inexpensive forum to bank customers.