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Current Affairs

RBI extends Ombudsman Scheme for NBFCs

Date: 27 April 2019 Tags:

Reserve Bank of India (RBI) has extended coverage of Ombudsman Scheme for non-banking financial companies (NBFCs) to eligible non deposit taking non-banking financial companies (NBFC-NDs) having asset size of Rs. 100 crore or above with customer interface.  However, NBFC-infrastructure finance company (NBFC-IFC), core investment company (CIC), NBFC-infrastructure debt fund-non-banking financial company (NBFC- IDF) and NBFC under liquidation, are excluded from ambit of this scheme.

Ombudsman Scheme for NBFC

  • It was launched in February 2018 for redressal of complaints against NBFCs registered with RBI under Section 45-IA of the RBI Act, 1934. To begin with, the scheme will cover all deposit-taking NBFCs.
  • It provides cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the scheme.
  • It also provides for appellate mechanism under which complainant/ NBFC has the option to appeal against decision of the Ombudsman before Appellate Authority.
  • Offices of NBFC Ombudsmen are functioning in 4 metro centres Chennai, Kolkata, Mumbai and New Delhi and handle complaints of customers in respective zones.
  • The compliant can be filed by customer or person with ombudsman on various grounds. It will only accept written complaints or those in electronic format.
  • Appointment of Ombudsman: RBI will appoint one or more of its officers in rank of not less than General Manager (GM) as Ombudsman to carry out functions.
  • Tenure: The appointment of Ombudsman is maximum for period not exceeding three years at time.
  • Orders of Ombudsman: It will obligatory on NBFC concerned to implement settlement arrived with complainant or award passed by Ombudsman.
  • Non Compliance: In case of non-implementation of settlement or award, the complainant may represent to RBI. On this, RBI may further initiate such action under provisions of RBI Act, 1934 as it deems fit.