Reserve Bank of India, the country’s central banking institution, has revised an earlier directive that requires all commercial banks to appoint an internal ombudsman (IO) to address all banking complaints.
Under the new regulation, all lenders with more than ten branches in the country are required to appoint an IO.
The IO will independently review banking complaints that were rejected by the respective banks.
In May 2015, the Reserve Bank of India advised all state-owned lenders and selected private and foreign banks to appoint the IO.
The appointment of the IO will facilitate grievance internal grievance redressal system in the banks. It will also prevent the customers to look for other avenues to settle their issues.
The revision of the IO mechanism, carried out under Section 35 A of the Banking Regulation Act, 1949, is expected to bolster the monitoring system as well as make the approach more customer-centric.
In a statement, the central bank said: “The IO shall, inter alia, examine customer complaints which are in the nature of deficiency in service on the part of the bank, (including those on the grounds of complaints listed in Clause 8 of the Banking Ombudsman Scheme, 2006) that are partly or wholly rejected by the bank.”
Besides Reserve Bank of India, the implementation of IO Scheme 2018 will be under the supervision of bank’s internal audit mechanism.