RBI EXTENDS OMBUDSMAN SCHEME TO NON-DEPOSIT TAKING NBFCS
Why in News?
- Reserve Bank of India (RBI) announced the extension of the 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. It has been done to ensure expeditious redressal of complaints against deficiency in services concerning loans and other matters relating to deficiency in the services by NBFCs.
Ombudsman Scheme for Non-Banking Financial Companies (NBFCs):
- The Scheme was launched on February 23, 2018, for redressal of complaints against NBFCs registered with RBI under Section 45-IA of the RBI Act, 1934 and covered all deposit accepting NBFCs.
- The NBFC Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against NBFCs for deficiency in certain services covered under the grounds of complaint specified under the Scheme.
- It provides a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the scheme.
- The scheme also provides for an appellate mechanism under which the complainant / NBFC has the option to appeal against the decision of the Ombudsman before the appellate authority.
- The offices of the NBFC Ombudsmen are functioning at Chennai, Kolkata, Mumbai and New Delhi and handle complaints of customers in the respective zones.
Who is an Ombudsmen?
- An ombudsman is a public advocate is an official who is charged with representing the interests of the public by investigating and addressing complaints of maladministration or a violation of rights.
- The ombudsman is usually appointed by the government or by parliament, but with a significant degree of independence.
- The typical duties of an ombudsman are to investigate complaints and attempt to resolve them, usually through recommendations (binding or not) or mediation. Ombudsmen sometimes also aim to identify systematic issues leading to poor service or breaches of people’s rights.
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