RBI releases ombudsman scheme for NBFCs

The Reserve Bank of India (RBI) on 23 February 2018 issued an ombudsman scheme for non-banking finance companies (NBFCs), offering a grievance redressal mechanism for their customers. The scheme will come into effect immediately, the regulator said in a press release.

Any customer or person can file a compliant with the ombudsman on various grounds like non-payment or inordinate delay in payment of interest, non-repayment of deposits, lack of transparency in loan agreement, non-compliance with RBI directives on fair practices code for NBFCs, levying of charges without sufficient notice to the customers and failure or delay in returning the securities documents despite repayment of dues among others.

An officer at the RBI not below the rank of general manager will be appointed by the regulator as the ombudsman with territorial jurisdiction being specified by the central bank. The tenure of each ombudsman cannot exceed three years and can be reduced by the regulator if needed. The NBFC shall, unless it has preferred an appeal, within one month from the date of receipt by it of the acceptance in writing of the award by the complainant under sub-clause (8), comply with the award and intimate compliance to the complainant and the ombudsman.

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