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Context:

The Reserve Bank of India's Integrated Ombudsman Scheme (RB-IOS) registered a 32.81% increase in complaints in FY 2023-24.

Details

The Integrated Ombudsman Scheme (IOS) covers complaints against banks, non-banking financial companies (NBFCs), payment system participants, and credit information companies.

It received 9.34 lakh complaints in FY 2023-24, marking a 32.81% increase compared to the previous year.

The major categories of complaints included:

• Loans and Advances: 85,281 complaints (29.01% of total), a 42.70% increase from the previous year.
• Mobile/Electronic Banking: 57,242 complaints (19.48% of total), a 32.61% increase.
• Deposit Accounts: 46,358 complaints (15.77% of total), a 34.45% increase.
• Credit Cards: 42,329 complaints (14.40% of total), a 23.95% increase.

Which regions contributed the most and least to the complaints?

• Top Contributors: Chandigarh, NCT of Delhi, Rajasthan, Gujarat, and Uttarakhand had the highest complaints per lakh accounts.
• Lowest Contributors: Mizoram, Nagaland, Ladakh, Manipur, and Lakshadweep had the lowest complaints per lakh accounts.

The RBI report highlighted unfair practices by banks, such as:

• Charging interest from the date of loan sanction or agreement execution, rather than the actual disbursement date.
• Charging interest from the date of cheque issuance, even if the cheque was handed over to the customer days later.
• Charging interest for the entire month, even if the loan was disbursed or repaid mid-month.

About the Reserve Bank of India’s Integrated Ombudsman Scheme (RB-IOS)

It is a unified framework launched by the Reserve Bank of India (RBI) in November 2021 to address customer complaints against entities regulated by the RBI, such as banks, non-banking financial companies (NBFCs), and payment system operators.

It integrates the existing three Ombudsman schemes—Banking Ombudsman, Ombudsman for Non-Banking Financial Companies (NBFCs), and Ombudsman for Digital Transactions—into a single scheme.

The objective of the RB-IOS is to provide a unified, efficient, and customer-centric mechanism for resolving complaints related to services provided by RBI-regulated entities, including banks, NBFCs, and digital transactions.

Role of the Ombudsman under the RB-IOS

The Ombudsman acts as an independent authority to investigate complaints, facilitate settlements between parties, and pass awards or recommendations to resolve disputes between customers and RBI-regulated entities.

Complaints under the RB-IOS

It aims to resolve complaints within 30 days of receiving the complaint, provided all necessary documents and information are submitted.

It does not charge any fee for filing complaints, making it accessible to all customers.

If a customer is not satisfied with the decision, they can appeal to the Appellate Authority within 30 days of receiving the decision.

Way Forward

The RB-IOS provides a unified and standardized grievance redressal mechanism across India, which ensures consistency and efficiency in resolving customer complaints against RBI-regulated entities.  

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Source: 

INDIAN EXPRESS