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Internal Ombudsman for Regulated Entities (Banks, NBFCs, PPI Issuers and CICs)

Reserve Bank of India (RBI) has issued directions on Internal Ombudsman for regulated entities.

To whom shall the directions on Internal Ombudsman (IO) be applicable?

The directions on IO shall be applicable to the following Regulated Entities (REs) –

  • Commercial Banks (other than Small Finance Banks, Payment Banks, and Local Area Banks) having 10 or more banking outlets in India as on March 31, 2025, whether such bank is incorporated in / outside India
  • Small Finance Banks having 10 or more banking outlets in India as on March 31, 2025
  • Payments Banks having 10 or more banking outlets in India as on March 31, 2025
  • Non-Banking Financial Companies (NBFCs) fulfilling the following criteria as on March 31, 2025 –
    • Deposit-taking NBFCs (NBFCs-D) with 10 or more branches
    • Non-Deposit taking NBFCs (NBFCs-ND) with asset size of ₹5,000 crore and above and having public customer interface
  • Non-Bank Prepaid Payment Instruments Issuers having more than 1 crore Prepaid Payment Instruments (PPIs) outstanding as on March 31, 2025, or thereafter, even if the number of PPIs outstanding falls below the threshold at a later date
  • Credit Information Companies (CICs)

The directions shall also be applicable to the RE which meets the above-mentioned criteria after March 31, 2025, with effect from 6 months from meeting the eligibility criteria.

Which entities are excluded from the applicability of IO directions?

IO directions shall not be applicable to the following entities –

  • Commercial Bank in resolution or winding up or under directions.
  • Housing Finance Company
  • Core Investment Company
  • Infrastructure Debt Fund - NBFC
  • NBFC - Infrastructure Finance Company
  • Non-Operative Financial Holding Company
  • Primary Dealers
  • Mortgage Guarantee Company
  • NBFC under Corporate Insolvency Resolution Process, in liquidation and / or winding up, or under directions of RBI

Who can be appointed as IO and Dy. IO?

Internal Ombudsman (IO) Deputy Internal Ombudsman (Dy. IO)
IO shall either be a retired or serving officer, in the rank equivalent to a General Manager in the RE under the purview of the IO framework or a Financial Sector Regulatory Body, having necessary skills and experience of minimum 7 years of working in areas such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information or consumer protection. Dy. IO shall either be a retired or serving officer, in the rank equivalent to a Deputy General Manager in the RE under the purview of the IO framework or a Financial Sector Regulatory Body, having necessary skills and experience of minimum 5 years of working in areas such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information or consumer protection.
IO shall not have been previously employed, nor presently be employed, by the RE or a holding, associate or subsidiary company of the RE. Dy. IO shall not have been previously employed, nor presently be employed, by the RE or a holding, associate or subsidiary company of the RE.
IO shall not be over 70 years of age before the completion of the tenure. Dy. IO shall not be over 70 years of age before the completion of the tenure.
A person may work as the IO in more than one RE simultaneously at the discretion of the REs concerned, subject to the approval of the Board or Customer Service Committee / Consumer Protection Committee of the Board of the appointing RE. Dy. IO shall not be employed in more than one RE simultaneously.

Financial Sector Regulatory Body includes RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA).

What shall be the tenure of IO / Dy. IO?

  • The appointment of the IO / Dy. IO shall be contractual.
  • RE shall ensure that the post of the IO does not remain vacant at any point of time. During the temporary absence of the IO, the Dy. IO may function as the IO.
  • In a rare case where both IO/s and Dy. IO/s are on leave / absent, the RE may designate its serving official equivalent to the General Manager rank as the IO for upto 1 month, with the approval of the Customer Service Committee of the Board (in case of banks) / the Board (in case of NBFCs, PPI Issuers) / Consumer Protection Committee of the Board (in case of CICs). Such official shall not have any reporting relationship with the business verticals of the RE during the period in which he / she is designated as the IO.
  • The tenure of the IO / Dy. IO shall be a fixed term of not less than 3 years. However, the total tenure (including extension / reappointment, if any) of the IO / Dy. IO shall not exceed 5 years.
  • To fill a vacancy, the RE shall undertake the process of fresh appointment at least 3 months in advance of the expiry of the tenure of the incumbent IO and ensure that there is a reasonable overlap between the time of demitting of office of the outgoing IO and the incoming IO.
  • IO / Dy. IO shall not be removed before the completion of his / her contracted term without the approval of the Customer Service Committee of the Board (in case of banks) / the Board (in case of NBFCs, PPI Issuers) / Consumer Protection Committee of the Board (in case of CICs). 
  • In case a vacancy arises on account of reasons beyond the control of the RE (such as resignation, incapacitation, illness, death, etc.), the RE shall inform RBI within 10 working days from the date of such vacancy and appoint a new IO / Dy. IO within 3 months from the date of vacancy.
  • Customer Service Committee of the Board (in case of banks) / the Board (in case of NBFCs, PPI Issuers) / Consumer Protection Committee of the Board (in case of CICs) shall determine the structure of emoluments, facilities and benefits accorded to the IO / Dy. IO.

What shall be the administrative structure for IO / Dy. IO?

  • IO shall report to the Competent Authority of the RE administratively, and to the Customer Service Committee of the Board (in case of banks) / the Board (in case of NBFCs, PPI Issuers) / Consumer Protection Committee of the Board (in case of CICs) functionally. Competent Authority means –
    • Whole Time Director / Executive Director-in-charge of customer service vertical of the bank
    • Executive Director / Managing Director / Chief Executive Officer in the NBFC
    • Managing Director / Chief Executive Officer of the PPI issuer
    • Managing Director / Chief Executive Officer in the CIC
  • The office of the IO may preferably be placed in the Head Office or Corporate Office of the RE.
  • Dy. IO shall functionally report to the IO.

Which complaints shall be dealt by IO?

IO shall deal with the complaints that have already been examined by the RE but have been partially resolved or being wholly rejected by the RE.

Which complaints shall not be dealt by IO?

The following types of complaints shall not be handled by the IO –

  • Complaints received directly from the complainants or members of the public.
  • Complaints related to corporate frauds, misappropriation etc., on the part of the RE that do not impact the customer in any manner.
  • References in the nature of suggestions and commercial decisions of the RE. However, service deficiencies in cases falling under 'commercial decisions' will be valid complaints for the IO.
  • Complaints / references relating to (i) internal administration, (ii) human resources, or (iii) pay and emoluments of staff in the RE.
  • Complaints which have been decided by or are already pending in judicial / quasi-judicial fora such as Courts, Consumer Disputes Redressal Commission, Arbitration, etc.
  • Disputes for which remedy has been provided under Section 18 of the Credit Information Companies (Regulation) Act, 2005.

IO / Dy. IO shall not represent the RE in legal cases before any court or fora or authority.

What shall be the procedure for redressal of complaints by IO?

  • All complaints that are partially resolved or wholly rejected by the RE's internal grievance redress mechanism (in case of banks, NBFCs and PPI Issuers) shall be auto escalated to the IO for review –
    • In case of complaints, for which RBI, National Payments Corporation of India (NPCI), or card network guidelines prescribe a timeline for resolution, sufficiently in advance such that IO / Dy. IO gets at least 10 days for review of such complaints to enable final decision to be communicated to the complainants within the timelines prescribed by RBI, NPCI, or card network.
    • In all other cases, within 20 days of receipt.
  • All complaints that are partially resolved or wholly rejected by the CIC’s internal grievance redress mechanism shall be auto escalated to the IO for review within 25 days of receipt.
  • RE shall provide only 3 categories i.e. 'Fully Resolved', 'Partially Resolved' and 'Wholly Rejected' in its Complaint Management System for recording the decision on the complaints before escalation to the IO. The complaints outside the purview of the IO / Dy. IO are exempted from such classification.
  • The decision of the IO / Dy. IO can be overruled only with the approval of the Competent Authority.
  • All such cases where the decision of the IO / Dy. IO has been overruled by the Competent Authority shall be placed before the Customer Service Committee of the Board (in case of banks) / the Board (in case of NBFCs, PPI Issuers) / Consumer Protection Committee of the Board (in case of CICs) for review.
  • RE shall ensure that the final decision is communicated to the complainant within 30 days from the date of receipt of complaint by the RE.
  • Where the IO / Dy. IO upholds the decision of the RE to reject or partially resolve the complaint, the reply to the complainant should explicitly state that the said complaint has been reviewed by the IO / Dy. IO.
  • For complaints that are partially resolved or wholly rejected after examination by the IO / Dy. IO, the RE shall advise the complainant about the option of approaching the RBI Ombudsman for redress (excluding complaints not covered under the Reserve Bank - Integrated Ombudsman Scheme) along with complete details of the complaint. The RE in its reply shall also mention the URL of RBI's Complaint Management System portal for online filing of customer complaints (https://cms.rbi.org.in) and the physical / email address of the Centralised Receipt and Processing Centre.
  • When a complaint is escalated to the RBI Ombudsman, the decision of the IO / Dy. IO shall be mandatorily included in the information to be submitted by the RE to the RBI Ombudsman if the complaint was already reviewed by the IO / Dy. IO. In case, the complaint was not earlier reviewed by the IO / Dy. IO, the RE shall necessarily seek his / her comments and submit the same to the RBI Ombudsman.


References

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Commercial Banks - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13271&Mode=0

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Credit Information Companies - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13276&Mode=0

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Non-Bank Prepaid Payment Instruments Issuers - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13275&Mode=0

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Non-Banking Financial Companies - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13274&Mode=0

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Payments Banks - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13273&Mode=0

Reserve Bank of India. (2026, January 14). 'Reserve Bank of India (Small Finance Banks - Internal Ombudsman) Directions, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13272&Mode=0


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