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RBI to introduce internal ombudsman scheme for NBFCs on lines of banks

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The Reserve Bank of India (RBI) on Friday announced an internal ombudsman scheme (IOS) to redress grievances at select non-banking finance companies (NBFCs).

RBI to introduce internal ombudsman scheme for NBFCs on lines of banks
The Reserve Bank of India (RBI) on Friday announced an internal ombudsman scheme (IOS) to redress grievances at select non-banking finance companies (NBFCs). The IOS will be on the lines of a similar system adopted at banks and will redress grievances related to deficiencies in service, Governor Shaktikanta Das said, announcing the new measure in the statement on regulatory policies along with the bi-monthly review of the monetary policy.
The increased significance, strength and reach of NBFCs across the country have necessitated having in place better customer experience including grievance redress practices, he said.
Das said over the last few years, the RBI has taken a slew of measures to improve consumer protection at NBFCs which include asking such lenders to appoint nodal officers to address grievances in 2013 and launch of the ombudsman scheme for NBFCs in 2018.
The IOS system will be in lines of IOS for banks and non-bank payment systems participants. Select NBFCs in the above category will have to appoint an Internal Ombudsman (IO) at the top of their internal grievance redress mechanism to examine customer complaints which are in the nature of deficiency in service and partly or wholly rejected by the NBFCs, the central bank said.
RBI previously required NBFCs to appoint Nodal Officers for grievance redress (2013) and introduced the Ombudsman Scheme for NBFCs (2018).
RBI will soon issue detailed instructions.
Meanwhile, Das also announced a six-month extension in the facility which allows banks to on-lend through NBFCs and get the priority sector lending tag, till March 2022. He reminded that bank lending to registered NBFCs (other than micro-lenders) for on-lending to agriculture (investment credit), Micro and Small enterprises and housing (with an increased limit) was permitted to be classified as priority sector lending up to certain limits in August 2019.
-With PTI inputs
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