RBI to strengthen banks' internal ombudsman: Can you hope for faster grievance redressal?

Going forward, bank customers can hope to get quicker arbitration from the Internal Ombudsman (IO) set up by the bank as the RBI plans to strengthen these ombudsmen and also make them more independent. 

In the Statement on Developmental and Regulatory Policies issued on August 1, 2018, RBI stated that it has been decided to enhance the independence of the IO while simultaneously strengthening the monitoring system over functioning of the IO mechanism. 

The revised instructions in this regard will be issued by the end of September 2018. 

Customer complaints in the banking system are increasing. Even though the banks have their own grievance redressal system in place including an Internal Ombudsman (IO), the customers often feel that their complaints remain largely unresolved and then have to approach the external ombudsman. 

In May 2015, with a view to strengthening the internal grievance redressal mechanism of banks, select banks were advised to appoint Internal Ombudsman (IO) as the apex authority for redressal of customer complaints. The intention of the Internal Ombudsman of the Bank is to strengthen the grievance redressal mechanism and to reduce the complaints being escalated to Banking Ombudsman. 

The Internal Ombudsman (Chief Customer Service Officer) is appointed by the Bank with objective of enabling customers of the Bank to access an independent arbitrator for their complaints , when they are not satisfied with the resolution provided by the Bank. The presence of an IO further strengthens the internal Grievance Redressal mechanism of the Bank. 

Procedure for approaching Internal Ombudsman

The customer before making a complaint to IO should make a representation to the Bank. In case the customer is not satisfied with the reply given by the Bank or the Bank has rejected the complaint or the Bank has failed to respond within a month of the representation, the customer can approach/appeal to IO. The IO shall ensure that as far as possible, the grievances are settled through internal redressal mechanism. 

What if Internal Ombudsman doesn't help

In case the customer is not satisfied, the customer can approach the Banking Ombudsman (appointed by Reserve Bank of India) of the relevant jurisdiction if the IO fails to respond within a month of the representation or if the customer is not satisfied with the resolution given by the IO. 

Source - Economic times