Non-banking finance companies (NBFCs) have seen tremendous growth in the past few years. Now, in a move that will strengthen the grievance redressal mechanism for customers of these firms, Reserve Bank of India would be setting up an ombudsman scheme for NBFCs.
The RBI had mooted such a move way back in 2016. In comparison, a banking ombudsman was set up over two decades ago. Setting up a ombudsman scheme for NBFCs will allow customers lodge complaints with respect to service-related issues like high charges levied by NBFCs, regulatory guidelines on interest rates not being followed, and any other matters and get complaints resolved faster.
The way things have been working so far is that it was mandatory for NBFCs to constitute a grievance redressal machinery and the name and contact details of the redressal officer had to be displayed in all the branches. If the complainant was not satisfied with the settlement of the complaint, he/she could also file a complaint with the nearest RBI office.
With respect to credit card operations by NBFCs, which are subsidiaries of banks, the customer had the option of approaching the concerned banking ombudsman, if the complainant did not get a satisfactory response from NBFC within 30 days from the date of lodging the complaint.
Now, there will be a dedicated ombudsman for the NBFCs.
“The banking ombudsman scheme has been working well and has been accepted as a preferred mode of customer grievance redressal by public at large, which is cost free and expeditious. It was found that since in the NBFCs, complaints were increasing, and there is no such redressal mechanism, it has been decided that we will have a scheme for the non-banking financial sector also,” said B.P. Kanungo, deputy governor of RBI said on Wednesday.
Speaking after the bi-monthly monetary policy announcement on Wednesday, Kanungo said that the new ombudsman scheme for NBFCs will be introduced by the end of this month in a phased manner.
To start with, all the deposit-taking NBFCs will be covered under the ombudsman scheme, and at a later stage, all the NBFCs, which have an asset size of Rs 100 crore and above, and having any customer interface, will also be included in the scheme.
