RBI unveils stricter norms for banks to bolster grievance redress mechanism
PrintListen to this Article
"Effective grievance redress should be an integral part of the business strategy of the banks. It is, however, evident from the increasing number of complaints received in the Offices of Banking Ombudsman (OBOs), that greater attention by banks to this area is warranted," the RBI said.
The new framework mandates banks to have enhanced disclosures on complaints. Also, it talks about recovery of the cost of redress of maintainable complaints from the banks against whom the number of complaints received in the Offices of Banking Ombudsman (OBOs) are in excess of their peer group averages.
RBI's proposed digital currency project and what it means for you
Besides, the framework also includes an intensive review by RBI of the grievance redress mechanism of banks, having persisting issues in their redress mechanism has been issued today, the RBI said in a statement.
“The framework intends to, inter-alia, provide greater insight into the volume and nature of complaints received by the banks as also the quality and turnaround time of redressal, promote satisfactory customer outcomes and improved customer confidence, and identify remedial steps to be taken by the banks having persisting issues in grievance redress mechanism,” the RBI said.
The framework will come into effect from the date of the circular, the central bank said.
The RBI had first announced about this plan in the December 4 monetary policy where the central bank said it will put in place a comprehensive framework comprising enhanced disclosures on customer complaints, a monetary disincentive in the form of recovery of cost of redress of complaints from banks and undertaking intensive review of grievance redress mechanism and supervisory action against banks that fail to improve their redress mechanism in a time bound manner.
Over years, the RBI has taken various initiatives for improving customer service and grievance redress mechanism in banks. As part of this, the Banking Ombudsman Scheme was introduced in 1995 to serve as an alternate grievance redress mechanism for customer complaints against banks.
In 2019, Reserve Bank also introduced the Complaint Management System (CMS), a fully automated process-flow based platform, available 24x7 for customers to lodge their complaints with the Banking Ombudsman (BO).
As part of the disclosure initiative, banks were advised to disclose in their annual reports, summary information regarding the complaints handled by them and certain disclosures were also being made in the Annual Report of the Ombudsman Schemes published by the Reserve Bank, the central bank said.
Also, to further strengthen grievance redress mechanisms, banks were mandated to appoint an Internal Ombudsman (IO) to function as an independent and objective authority at the apex of their grievance redress mechanism.
Category : RBI | Comments : 0 | Hits : 261
Listing of an Indian company on international stock exchanges got a push with the Reserve Bank of India (RBI) coming out with regulations under Foreign Exchange Management (FEMA). Experts believe new regulations will help companies utilise foreign exchange more effectively. Regulations have been made public through two notifications. First set of regulations deals with mode of payment and reporting of non-debt instruments. “The proceeds of purchase / subscription of equity shares of an ...
The Lok Sabha elections 2024 are in full swing with electioneering adding much colour to the entire process. However, to ensure that there is no wrongdoing, the Reserve Bank of India (RBI) has sent a missive to Payment System Operators (PSOs) asking them to keep a watch on all suspicious high-value transactions that they may come across in their systems. The general purpose of the letter is to deny the use of electronic fund transfer mechanism to anyone who is intending to influence the election...
he Reserve Bank on Tuesday came out with draft guidelines to further strengthen regulations on payment aggregators, a move aimed at boosting the payment ecosystem. The draft also covers the physical point-of-sale activities of payment aggregators (PAs). The RBI said that given the growth in digital transactions and the significant role that PAs play in this space, the current directions on PAs are proposed to be updated and cover, inter alia, KYC and due diligence of merchants, operations ...
The RBI on Monday eased rules to allow resident entities to hedge their exposures to the price risk of gold using the OTC derivatives in the International Financial Services Centre (IFSC) in addition to the derivatives on the exchanges in the IFSC. Resident entities such as banks were permitted to hedge their exposure to the price risk of gold on the exchanges in the IFSC that are recognised by the International Financial Services Centres Authority (IFSCA), and the new directive provides them...
The Reserve Bank of India (RBI) on March 21 said it has imposed monetary penalty on five co-operative banks for rule violations. These banks are Pragati Mahila Nagrik Sahakari Bank, Janata Co-operative Bank, Jila Sahakari Kendriya Bank, Karad Urban Co-operative Bank, and The Kalupur Commercial Co-operative Bank. The central bank imposed Rs 26.60 lakh on The Kalupur Commercial Co-operative Bank, Rs 13.30 lakh on Karad Urban Co-operative Bank, Rs 5 lakh on Janata Co-operative Bank, Rs 1 lakh...
Comments