Business Standard

Das for better grievance redress mechanism

RBI guv says gaps have been identified in the systems of regulated entities

- MANOJIT SAHA Mumbai, 15 March

Reserve Bank of India (RBI) Governor Shaktikant­a Das on Friday urged regulated entities to enhance their grievance redress mechanisms as “certain gaps” have been identified in the systems and procedures of these entities.

“We have brought these deficienci­es to the notice of individual banks and nonbanking financial companies (NBFCS). Our effort is to work with the regulated entities and rectify such deficienci­es,” Das said at the Annual Conference of the RBI Ombudsman.

The regulator had establishe­d an internal ombudsman (IO) mechanism in regulated entities to bolster their internal grievance redress processes. Das said the functionin­g of the IO requires “considerab­le improvemen­t”.

“It has been observed that on many occasions, IOS tend to merely endorse the decision of the regulated entities. In several instances, rejected complaints are not being referred to IOS,” Das said.

“The very foundation of an internal dispute resolution system depends on its ability to provide fair, impartial, and judicious adjudicati­on. The observed trend raises concerns about the robustness of the existing framework. I urge all of you to ensure the overall integrity and efficacy of the internal grievance redress mechanism,” he said.

“There is also a need to further strengthen the internal grievance redress systems, including the internal ombudsman framework, within the regulated entities,” Das said. He stressed that regulated entities must understand that they are the first touchpoint­s in the overall grievance redress framework, and re-directing the aggrieved to the alternate grievance machinery of the RBI ombudsman is not advisable.

“As I can see from some of the complaints that reach my desk, many of the cases are such that they should have been resolved at the level of the regulated entities,” Das said.

Commenting on the performanc­e of the RBI’S Integrated Ombudsman Scheme, Das said 234,000 grievances were received during the first full year of its operation (2022-23), followed by 268,000 grievances in the current financial year (202324) so far.

“The disposal rate in both years has been about 98 per cent. The average turnaround time for resolving complaints across all categories has reduced to 33 days in 2022-23 from 57 days prior to the introducti­on of the new scheme,” he said.

In the context of the rise in fraudulent transactio­ns, Das said it was crucial to strengthen monitoring systems and employ technology to preempt potential frauds.

“IT HAS BEEN OBSERVED THAT ON MANY OCCASIONS, INTERNAL OMBUDSMAN (IOS) TEND TO MERELY ENDORSE THE DECISION OF THE REGULATED ENTITIES. IN SEVERAL INSTANCES, REJECTED COMPLAINTS ARE NOT BEING REFERRED TO IOS”

SHAKTIKANT­A DAS

RBI GOVERNOR

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