INTRODUCTION
These days, almost everyone relies on banks for everyday financial transactions. Despite the convenience of digital banking and payments, issues such as delayed transactions, incorrect deductions, failed payments, or poor customer service can still arise. Often, even after approaching the bank or service provider, complaints may not be addressed satisfactorily.
To deal with this, the RBI introduced the Integrated Ombudsman Scheme, 2021, to make grievance redressal simpler, faster, and more effective for customers of RBI-regulated entities. It brings complaint handling under a single framework for banks, NBFCs, and digital payment providers, including commercial banks, co-operative banks with deposits above ₹50 crore, NBFCs with assets exceeding ₹100 crore, and payment system providers.[1] If a complaint is not resolved internally, the Ombudsman can intervene, allowing customers to seek compensation for financial loss or inconvenience without approaching a court. It’s a system designed to protect your rights and make sure your voice is heard.
This blog article will help you understand the RBI’s Integrated Ombudsman Scheme to secure your rights and resolve banking complaints quickly, easily, and without any legal costs.
BACKGROUND
The Bank Ombudsman Scheme was introduced by the Reserve Bank of India in 1995 under the Banking Regulation Act, 1949. It was created to address the rising number of complaints from bank customers and to provide a simple and effective way to resolve disputes without resorting to court proceedings. Over time, the scheme was revised to adapt to changes in the banking sector and advancements in technology. Key revisions took place in 2002, 2006, and 2017.[2]
Eventually, in 2021, the Reserve Bank of India, using its powers under Section 35A,[3] Sections 45L and 45M[4] and Section 18[5], merged three Ombudsman schemes (the Banking Ombudsman Scheme, 2006, the Ombudsman Scheme for Non-Banking Financial Companies, 2018, and the Ombudsman Scheme for Digital Transactions, 2019) into a single framework. This resulted in the Reserve Bank–Integrated Ombudsman Scheme, 2021, aimed at simplifying and strengthening the complaint redressal system in the public interest.[6]
SCOPE OF THE SCHEME
- This scheme extends to the whole of India.
- It covers services offered by regulated entities in India to their customers under the RBI Act 1934, the Banking Regulation Act 1949, and the Payment and Settlement Systems Act 2007.[7]
- The types of regulated entities included:
- Banks: All Commercial Banks, Regional Rural Banks, and primary Urban Co-operative Banks (scheduled or non-scheduled) with deposits of ₹50 crore or more.
- NBFCs: All Non-Banking Financial Companies (excluding housing finance companies) that accept deposits or deal with customers and have assets of ₹100 crore or more.
- System Participants: All payment system participants as defined under the Scheme.
SALIENT FEATURES OF THE SCHEME
- One Nation, One Ombudsman: The RBI Ombudsman Scheme operates as a single, unified mechanism across the country, making it jurisdiction-neutral and allowing complaints to be filed from anywhere in India.
- No Specific Scheme: Complainants are not required to identify or select a particular Ombudsman Scheme while filing a complaint, as all complaints are handled under a centralised common framework.
- Deficiency in service as the ground: Complaints can be filed based on a deficiency in service by a regulated entity, except for a clearly defined list of exclusions, widening the scope of customer grievances that can be addressed.
- Reduced rejection: Complaints will not be rejected merely because they do not fit into predefined or rigid categories that existed under earlier Ombudsman Schemes.
- Removal of territorial jurisdiction: The jurisdiction of individual Ombudsman offices has been removed, enabling any Ombudsman to handle complaints irrespective of the location of the complainant or the regulated entity.
- Centralised Processing: A Centralised Receipt and Processing Centre (CRPC) has been set up at RBI to receive and carry out initial processing of complaints submitted physically or through email, in any language.
- Principal Nodal Officer: Each bank or company must appoint a senior officer to represent, respond, and provide documents to the Ombudsman.
- No right to appeal: If an Ombudsman issues an award due to the regulated entity’s non-cooperation or failure to provide timely or satisfactory information or documents, the entity loses the right to appeal against the award.[8]
WHO IS THE OMBUDSMAN?
The term “Ombudsman” originated in Sweden and refers to a public official appointed to investigate complaints against government authorities or organisations and ensure that citizens are treated fairly. An Ombudsman is a public official who investigates complaints and ensures fair treatment. A Banking Ombudsman, appointed by the RBI under the Integrated Ombudsman Scheme 2021, addresses customer complaints against banks. He acts as a quasi-judicial authority, providing a free, impartial, and speedy platform to resolve disputes without going to court. The RBI can appoint one or more Ombudsmen and Deputy Ombudsmen to protect customer interests and ensure fair solutions, each having a tenure of three years.[9]
POWERS AND FUNCTIONS
- The Ombudsman and Deputy Ombudsman address customer complaints related to deficiencies in services provided by regulated entities.
- There is no limit on the dispute amount, though compensation is limited to ₹20 lakh for financial loss and an additional ₹1 lakh for loss of time, expenses incurred, and mental harassment of the complainant.
- The Ombudsman has the authority to handle all complaints, while the Deputy Ombudsman can close only specific categories of complaints under the Scheme.
- The Ombudsman must submit an annual report on activities to the Deputy Governor of RBI by March 31 every year.
- The RBI may publish this report if it considers it necessary in the public interest in such consolidated form or otherwise, as it may deem fit.[10]
- The Ombudsman may require regulated entities to submit information or certified documents related to a complaint.
- All information must be kept confidential, except where disclosure is required by law, necessary for fairness, or made to the RBI or a court/authority.[11]
PROCEDURE FOR REDRESSAL OF GRIEVANCE
- Grounds of Complaint
A customer may file a complaint against a Regulated Entity for deficiency in service, either personally or through an authorised representative.
- Grounds for Non-Maintainability
Complaints are not maintainable if they involve commercial decisions, vendor or outsourcing disputes, management grievances, matters outside RBI’s regulatory purview, inter-entity or employer–employee disputes, or actions taken under statutory directions. A complaint will only be considered if the customer first approached the Regulated Entity, waited 30 days for a response, filed it within a year, ensured it’s not already being dealt with elsewhere, and submitted complete and genuine details.
- Filing of Complaint
Complaints can be filed online through the RBI CMS portal or submitted physically or by email to the Centralised Receipt and Processing Centre in the prescribed format.
- Initial Scrutiny
Suggestions or requests for advice are not treated as complaints and are closed. Complaints that don’t meet the rules are rejected with a notice to the complainant. Valid complaints are sent to the Ombudsman and the concerned Regulated Entity for further action.
- Powers to call for Information
The Ombudsman may call for information or documents, draw adverse inference for non-compliance, and maintain confidentiality subject to law and natural justice.
- Resolution of Complaints
The Ombudsman attempts resolution through conciliation or mediation in summary proceedings. Regulated Entities must respond within 15 days, failing which ex parte decisions may be taken. Complaints usually end in settlement, acceptance, or withdrawal.
- Award by the Ombudsman
If the complaint isn’t resolved, the Ombudsman can issue an Award requiring the Regulated Entity to comply and pay compensation up to ₹20 lakh or the actual loss, plus up to ₹1 lakh for harassment or inconvenience. The Award becomes effective only after the complainant accepts it.
- Rejection of Complaints
Complaints may be rejected if no deficiency or loss is found, or the claim exceeds the Ombudsman’s powers, or the complaint lacks merit or diligence.
- Appeal Mechanism
Regulated Entities cannot appeal if they fail to provide the required information. In other cases, appeals can be made within 30 days to the Appellate Authority, and its decision is final.[12]
CONCLUSION
The RBI’s Integrated Ombudsman Scheme, 2021, provides a simple, nationwide, and cost-free way for customers to resolve complaints against banks, NBFCs, and payment service providers. By merging earlier schemes into a single, jurisdiction-neutral framework, it ensures faster grievance redressal, wider coverage, and fewer technical rejections. Customers can seek compensation for financial loss, inconvenience, or harassment without going to court, while regulated entities are held accountable for timely and fair responses. The scheme strengthens consumer protection, promotes transparency, and offers a streamlined, accessible path for resolving banking grievances efficiently, empowering customers to safeguard their rights.
Author(s) Name: Tamizunnisa Shaikh (Advocate, Bombay High Court)
References:
[1] The Reserve Bank – Integrated Ombudsman Scheme 2021
[2] GK Today, ‘Bank Ombudsman Scheme’
(GK Today, 19 December 2025) <https://www.gktoday.in/bank-ombudsman-scheme/> accessed 26 December 2025
[3] Banking Regulation Act 1949
[4] Reserve Bank of India Act 1934
[5] Payment and Settlement Systems Act 2007
[6] The Reserve Bank – Integrated Ombudsman Scheme 2021
[7] Ibid
[8] Department of Financial Services, ‘Banking Ombudsman’
(Ministry of Finance, Government of India) <https://financialservices.gov.in/beta/en/banking-ombudsman> accessed 27 December 2025
[9] The Reserve Bank – Integrated Ombudsman Scheme 2021
[10] Ibid
[11] Ibid
[12] Ibid
