The Reserve Bank of India (RBI) has recently announced an expansion of the Ombudsman Scheme for Non-Banking Financial Companies (NBFCs). The scheme now includes eligible non-deposit taking non-banking financial companies (NBFC-NDs) having an asset size of Rs 100 crore or above and a customer interface.
Rationale behind the Extension
The central bank’s initiative is a strategic move to ensure efficient redressal of complaints against service deficiencies concerning loans and other related services by NBFCs. The ultimate objective is to provide a cost-free, expeditious, and more accessible platform for customers to resolve their issues with these financial entities.
Understanding the Ombudsman Scheme for NBFCs
The Ombudsman Scheme for NBFCs came into effect on February 23, 2018, and it applies to all NBFCs registered with the RBI under Section 45-IA of the RBI Act, 1934. The key purpose of this scheme is to settle customer complaints against NBFCs regarding the deficiency in specific services.
The NBFC Ombudsman, a senior official appointed by the RBI, is tasked with handling customer complaints related to deficient services provided by NBFCs under the scope of the scheme. The role of the ombudsman includes investigation and impartial judgment of complaints in accordance with the stipulations outlined in the scheme.
Additionally, the scheme features an appellate mechanism that allows both the complainant and the NBFC to appeal against the ombudsman’s decision to a higher authority, thereby ensuring fair treatment and relief for all parties involved.
Offices and Zones of the NBFC Ombudsmen
Currently, the offices of the NBFC Ombudsmen are stationed at four major Indian cities: Chennai, Kolkata, Mumbai, and New Delhi. Each office is responsible for addressing and resolving complaints from customers residing within their respective zones.
Table of Selected Facts about the Ombudsman Scheme for NBFCs
| Launch Date of the Scheme | February 23, 2018 |
|---|---|
| Objective | Redressal of complaints against NBFCs concerning service deficiencies |
| Official Appointed | NBFC Ombudsman |
| Ombudsman Offices | Chennai, Kolkata, Mumbai, New Delhi |
Impact of the Extension
The recent extension of the scheme to eligible NBFC-NDs aims to strengthen the ecosystem surrounding non-banking financial entities and improve their customer services. By expanding its scope, the RBI has further solidified its commitment to safeguarding customers’ interests and ensuring transparent business practices in the financial sector.