Internal ombudsman for NBFCS to look at plaints

The Reserve Bank of India (RBI) is set to introduce the internal ombudsman scheme for NBFCS to improve the process of addressing customers’ complaints.

Detailed instructions in this regard will be issued separately, the RBI said in a statement on Developmental and Regulatory Policies.

The RBI said this move will be on the lines of the internal ombudsman scheme for banks and non-bank payment system participants. Finance companies will appoint an ombudsman at the top of grievance redress mechanism to examine complaints about deficiency in service.

Finance companies have played an important role in extending finance to niche sectors such as MSME, microfinance, housing, vehicle finance, etc. They have complemented the efforts of banks through last-mile financial intermediation.

The increased significance, strength and reach of NBFCS across the country have necessitated better customer experience, including grievance redress practices.

Over the past few years, the RBI has made it mandatory for NBFCS to appoint nodal officers to address grievances (2013) and launched the Ombudsman Scheme for NBFCS (2018).

Several NBFCS have adopted digital modes to support delivery of their financial products and services to a wide spectrum of customers, the RBI added.