Jagran Josh Logo

Banks with over 10 branches to have internal ombudsman: RBI’s Internal Ombudsman Scheme 2018

Sep 4, 2018 13:34 IST
Banks with over 10 branches to have internal ombudsman: RBI

The Reserve Bank of India (RBI) on September 3, 2018 asked all scheduled commercial banks with more than 10 branches to appoint an Internal Ombudsman.

However, the apex bank excluded Regional Rural Banks from its directive.

Who is an ombudsman?

An ombudsman is a person officially charged with investigating and addressing public complaints or violation of rights.

Highlights of the Scheme

• The Scheme covers appointment and tenure; roles and responsibilities; procedural guidelines and oversight mechanism for the Internal Ombudsman.

• All Scheduled Commercial Banks in India having more than 10 banking outlets are required to appoint IO in their banks.

• The IO will examine customer complaints referring to the deficiency in service on the part of the bank that are partly or wholly rejected by the bank.

• The customers of banks need not approach the IO directly as the banks themselves will escalate all complaints internally, which are not fully redressed to their respective IOs before conveying the final decision to the complainant.

• The implementation of IO Scheme, 2018 will be monitored by the bank’s internal audit mechanism apart from regulatory oversight by RBI.

Why was there a need of revised directions regarding Internal Ombudsman?

In May 2015, the RBI had advised all public-sector and selected private and foreign banks to appoint Internal Ombudsman (IO) as an independent authority to review complaints rejected by them.

The IO mechanism was set up with a view to strengthen the internal grievance redressal system of banks and to ensure that the complaints of the customers are redressed at the level of the bank itself by an authority (Internal Ombudsman) placed at the highest level of bank’s grievance redressal mechanism.

Now, to enhance the independence of the Internal Ombudsman while simultaneously strengthening the monitoring system over functioning of the IO mechanism, RBI issued revised directions under Section 35 A of the Banking Regulation Act, 1949 in the form of ‘Internal Ombudsman Scheme, 2018’.

 

Video: Check out the latest current affairs of this week

 

Is this article important for exams ? Yes3 People Agreed

DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

Latest Videos

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

Newsletter Signup
Follow us on
This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK