RBI’s integrated Ombudsman scheme — A much-needed step

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When it comes to consumer grievances and their redressals, our regulators tend to take investor complaints very seriously and as a result, have developed some truly robust mechanisms to handle investor complaints and queries.

SEBI’s SCORES is a wonderful example of this and the RBI – with its Integrated Ombudsman Scheme or IOS, is not far behind.

Let us see what is the RBI Integrated Ombudsman Scheme (IOS) all about. But before we get into IOS, let us first see what or who an Ombudsman is.

According to Investopedia an Ombudsman is “An official, usually appointed by the government, who investigates complaints (usually lodged by private citizens) against businesses, financial institutions, universities, government departments, or other public entities, and attempts to resolve the conflicts or concerns raised, either by mediation or by making recommendations.”

Simply put, if you have any grievance or problem related to banking services for which you are not satisfied with the resolution provided, you can go to an Ombudsman who is responsible for coming back to you with a solution to the problem or at least pointing you in the direction of the solution and telling you where to go and how to go about it.

Earlier, there were three different “Ombudsmen” – if I may use that term, depending upon the nature of the issue.

1. For Banking related queries and issues
2. For NBFC or Non-Banking Financial Corporation related queries and issues
3. For Digital Transaction related queries and issues.

The RBI has now recommended all three types of queries to be handled by one Ombudsman so that investors do not need to go to three different places.

Unifying the Three

Now, be it a complaint related to a bank, NBFC or a digital wallet, you have to approach a single Ombudsman under the new RBI e-Integrated Ombudsman Scheme or IOS. This move will reduce the hassle for customers in choosing the right Ombudsman.

“To make the alternate dispute redress mechanism simpler and more responsive to the customers of regulated entities, it has been decided to implement, inter alia, integration of the three Ombudsman schemes and adoption of the ‘One Nation One Ombudsman’ approach for grievance redressal.” said RBI Governor Shaktikanta Das.

He further added that the move is intended to make the process of redress of grievances easier by enabling the customers of the banks, NBFCs and non-bank issuers of prepaid payment instruments to register their complaints under IOS with one centralised reference point.

The RBI is targeting to roll out the e-Integrated Ombudsman Scheme in June 2021.

A Much-Needed Step

The IOS is a much-needed step as it will reduce the hassle for customers in choosing the right ombudsman. Integration will also help in streamlining processes, which will, in turn, help in quicker resolution of complaints. The only challenge will be in skilling people to handle complaints and queries of 3 different natures under one roof, while it is not an insurmountable challenge – for the IOS to be effective – effective teams, with full knowledge of all processes needs to be put in place.

(The writer is co-founder, MyWealthGrowth.com. Views expressed are personal)