OMBUDSMAN SCHEME FOR NON-BANKING FINANCIAL COMPANIES, 2018 The Ombudsman Scheme is introduced with the object of enabling resolution of complaints free of cost, relating to certain aspects of services rendered by certain non-banking financial companies registered with the Reserve Bank, to facilitate the satisfaction or settlement of such complaints, and matters connected therewith.
Appointment of Nodal Officer/Principal Nodal Officer
The RBI has issued Ombudsman Scheme for Non-Banking Financial Companies, 2018 to appoint Nodal Officer/Principal Nodal Officer to address the grievances of the customer in Financial Sector covered by NBFC via Notification No. RBI/2017-18/133 DNBR. PD, CC. No. 091/03.10.001/2017-18 dated 23rd February 2018.
APPOINTMENT & TENURE
1) The Reserve Bank may appoint one or more of its officers (Nodal Officer/Principal Officer) in the rank of not less than General Manager to be known as Ombudsman to carry out the functions entrusted to them under the Scheme.
2) The appointment of Ombudsman under the above Clause is made for a period not exceeding three years at a time. The RBI may reduce the term of appointment or reappoint the Ombudsman if it considers necessary to do so.
POWERS AND JURISDICTION
1) The Reserve Bank shall specify the territorial limit to which the authority of each Ombudsman shall be appointed under Clause 4 of the Scheme shall extend.
2) The Ombudsman may receive and consider complaints relating to the deficiencies in services filed on any one or more of the grounds mentioned in Clause 8 and facilitate their satisfaction or settlement by agreement or through conciliation and mediation between the non-banking financial company (NBFC) concerned and the aggrieved party or by passing an Award.
3) The Ombudsman shall exercise general powers of superintendence and control over his Office and shall be responsible for the conduct of business herein.
4) The Office of the Ombudsman shall draw up an annual budget for itself in consultation with RBI and shall exercise the powers of expenditure within the approved budget of Expenditure Rules framed by the RBI.
5) The Ombudsman shall send a report to the Governor of RBI, as on 30th June every year, containing a general review of the activities of his Office during the preceding financial year and shall also furnish such other information as the Reserve Bank may direct.
6) RBI may publish the report and the information received from the Ombudsman if it considers necessary in the public interest, in such consolidated form or otherwise as it deems fit.
What are the Complaints?
It means any representation or allegation made in writing or through electronic means to the Nodal Officer, containing a grievance alleging deficiency in service.
Examples of deficiency in services are mentioned below:-
- Non-payment or inordinate delay in the payment of interest on deposits or repayment of deposits itself;
- Non-adherence to RBI directives, if any applicable to rate of interest on deposits;
- Failure to convey in writing, the amount of loan sanctioned along with terms and condition including annualized rate of interest and method of application thereof;
- Failure or refusal to provide sanction letter/ terms and conditions of sanction in vernacular language or language as understood by the borrower;
- Levying of charges without adequate prior notice to the borrower/customer;
- Failure or inordinate delay in releasing the securities documents to the borrower on repayment of all dues;
- Non-observation of the direction issued by Reserve Bank to the non-banking financial companies
What will be the Procedure for Filing Compliant?
Any person who has any grievances against NBFC on the grounds of Deficiency of Service, himself or through his authorized representative other than Advocates, should register a complaint to Ombudsman within whose jurisdiction the Registered or Branch office of NBFC complained against, is located.
The complaint when in writing shall be signed by the complainant or his authorized representative.
The complainant should state the following issues clearly:-
- Name and address of Complainant
- Name and address of the branch or registered office of the non-banking financial company against which the complaint is made
- Facts giving rise to the complaint
- Nature and extent of loss caused to the complainant and
- The relief sought for.
Further, the complaints made through electronic means shall also be accepted by the Ombudsman. The ombudsman shall also entertain complaints covered by this scheme received from the Central Government or RBI or other financial regulator and forwarded to him for disposal.
Implementation/Enforcement of Award
There shall be an obligation of the concerned NBFC to implement the settlement arrived with the complaint or award passed by Ombudsman when it becomes final and send a report in this regard to RBI within a period of 15 days of the award became final. Non-address of order is initiated under provisions of Reserve Bank of India Act, 1934 or as it deems fit.
Address and Area of Operation of NBFC Ombudsman:
The Ombudsman scheme introduced by RBI helps in speedy resolution of a complaint filed against an NBFC which earlier used to be a tedious process. The NBFC’s are obliged to implement the settlement arrived with regards to the complaint or award passed by Ombudsman.