RBI Asks Select Non-Banking Finance Companies To Appoint Ombudsman

Reserve Bank of India (RBI) has directed a select few non-banking finance companies (NBFCs) to appoint an internal ombudsman to head their respective internal grievance redressal mechanism within six months of the issue of this notice.

In a statement issued by the RBI on Monday, all deposit taking NBFCs with 10 or more branches as well as non-deposit taking NBFCs with asset size of Rs 5,000 crore and more and having public customer interface, to appoint internal ombudsman at the top of their internal grievance redressal mechanism.

The directive also covers the appointment as well as fixing of tenure, role and responsibilities, procedural guidelines and oversight mechanism for the internal ombudsman.

All complaints, which have been partly or wholly rejected by the NBFC, will be reviewed by the ombudsman before the final decision of the NBFC is conveyed to the complainant, the RBI statement said.

It is important to note that the internal ombudsman will not entertain any complainants directly from members of public.

However, NBFCs not having public customer interface and certain other types of NBFCs like stand-alone primary dealers, NBFC infrastructure finance companies,  core investment companies, infrastructure debt fund NBFCs as well as NBFCs in liquidation and NBFCs having only captive customers have been excluded from appointing ombudsman.

The implementation of the ombudsman mechanism will be monitored by the NBFC's internal audit system apart from regulatory oversight by RBI, the statement said.