What Are the New RBI Norms for Internal Ombudsmen in Banks and NBFCs?
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Synopsis
The Reserve Bank of India has introduced new guidelines for the appointment of internal ombudsmen in banks and NBFCs, aiming to enhance customer complaint resolution. These steps are vital for improving customer service and ensuring complaints are handled effectively.
Key Takeaways
- RBI's new guidelines aim to improve customer grievance resolution.
- Every regulated entity must appoint at least one internal ombudsman.
- Ombudsmen will handle complaints that are unresolved by the entity.
- Eligibility includes significant experience in financial services.
- Feedback from stakeholders led to the finalization of these guidelines.
Mumbai, Jan 14 (NationPress) The Reserve Bank of India (RBI) has released new guidelines this Wednesday concerning the selection and operations of internal ombudsmen within banks and Non-Banking Financial Companies (NBFCs). This initiative is intended to bolster the framework for addressing customer complaints.
Distinct instructions have been provided for various entities including commercial banks, small finance banks, payments banks, NBFCs, non-bank prepaid payment instrument issuers, and credit information companies, ensuring clarity for each sector.
The purpose of these directives is to enhance the internal grievance redress system within regulated institutions, allowing for a prompt and effective resolution of consumer issues through oversight by a senior authority within these organizations, according to the apex bank.
Eligibility criteria for the internal ombudsman role include being a retired or current officer of equivalent rank to a General Manager within the regulated entity or a financial regulatory body, possessing a minimum of seven years of experience in relevant fields such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information, or consumer protection.
All regulated entities are mandated to appoint at least one internal ombudsman, as per the RBI's directive.
This ombudsman will handle complaints that the entity has already reviewed but have been only partially resolved or entirely rejected.
According to the RBI, "The areas concerning customer service and grievance redress, along with the execution of these guidelines, will form part of the supervisory examination by the Reserve Bank's Department of Supervision."
Previously, on October 7, 2025, the RBI circulated the draft Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2025, soliciting inputs from stakeholders and the public.
The feedback received has been analyzed, and essential changes have been incorporated into the final Master Direction, as stated by the RBI.
Point of View
The RBI's initiative to establish internal ombudsmen in banks and NBFCs showcases a proactive approach towards enhancing customer service. By ensuring that unresolved complaints receive further scrutiny, the RBI aims to foster trust and accountability in the financial sector, a vital step for consumer protection.
NationPress
14/01/2026
Frequently Asked Questions
What is the role of an internal ombudsman in banks and NBFCs?
The internal ombudsman is responsible for addressing customer complaints that have been partially resolved or rejected, providing a higher level of review within the institution.
Who can be appointed as an internal ombudsman?
Candidates must be either retired or serving officers equivalent to a General Manager with at least seven years of experience in relevant fields such as banking or consumer protection.
Why has the RBI issued these guidelines?
To enhance the grievance redressal mechanism within banks and NBFCs, ensuring that customer complaints are addressed effectively and transparently.
What entities are affected by these new RBI guidelines?
The guidelines apply to commercial banks, small finance banks, payments banks, NBFCs, non-bank prepaid payment instrument issuers, and credit information companies.
When were these guidelines announced?
The Reserve Bank of India announced the guidelines on January 14, 2025.
