22-March-2024-Editorial

INTEGRATED OMBUDSMAN SCHEME(RB-IOS)

The Reserve Bank of India (RBI) has reported a significant spike of 68.2% in complaints under its Integrated Ombudsman Scheme (RB-IOS) for the financial year 2023, reaching a staggering figure of 703,000.

This surge marks a substantial increase compared to previous years, indicating a growing trend in grievances related to financial services.

Factors Behind the Surge in Complaints:

Public Awareness Initiatives:

• The central bank’s robust public awareness campaigns have played a pivotal role in encouraging individuals to voice their concerns and grievances regarding financial services.
• Increased awareness of rights and available avenues for complaint resolution prompts more people to report issues they encounter with banks and non-bank payment system participants.

Streamlined Complaint Process:

• Implementation of a simplified and accessible process for lodging complaints has made it easier for the public to report issues they face with financial institutions.
• When the complaint process is streamlined and user-friendly, individuals are more likely to engage with it, resulting in a surge in the number of complaints received.

Digital Transactions:

• The growing popularity of digital transactions, especially in mobile and electronic banking, has increased the likelihood of encountering issues such as unauthorized or fraudulent transactions.
• The convenience of digital banking also means that any disruptions in the system can impact a large number of users simultaneously, leading to an increase in complaints.

RBI Integrated Ombudsman Scheme (RB-IOS):

About RB-IOS:

• RB-IOS amalgamates three ombudsman schemes of RBI: banking ombudsman scheme of 2006, Ombudsman scheme for NBFCs of 2018, and Ombudsman scheme of digital transactions of 2019.
• It aims to provide redressal of customer complaints involving deficiency in services rendered by RBI-regulated entities, including banks, NBFCs, and pre-paid instrument players.

Need for Integration:

• The integration addresses concerns regarding maintainable grounds for consumer challenges and rejection of complaints on technical grounds.
• Expansion of grounds for complaints and integration of systems are expected to elicit a positive response from consumers.

Key Features:

• Defines ‘deficiency in service’ as grounds for filing a complaint, with specified exclusions, ensuring complaints are not rejected arbitrarily.
• Centralized receipt and processing center in Chandigarh for initial handling of complaints in any language.
• Provision for the use of Artificial Intelligence tools for better coordination and faster resolution.
• Multilingual toll-free number for providing relevant information on grievance redress.

Appellate Authority:

• RBI’s Executive Director in charge of the Consumer Education and Protection Department serves as the Appellate Authority under the integrated scheme.

Significance of RB-IOS:

• Improves grievance redress mechanism for resolving customer complaints against RBI’s regulated entities.
• Ensures uniformity and streamlined user-friendly mechanisms, enhancing customer satisfaction and financial inclusion.

Conclusion:

The surge in complaints under the RBI Integrated Ombudsman Scheme highlights the importance of robust complaint resolution mechanisms in the financial sector.

The integration of ombudsman schemes aims to address consumer grievances effectively, ensuring a fair and transparent system for resolving disputes between consumers and regulated entities.