Select NBFCs to now have internal ombudsman on lines of banks: Shaktikanta Das

Select NBFCs to now have internal ombudsman on lines of banks: Shaktikanta Das

With the objective of upping customer experience, the Reserve Bank on Friday announced an internal ombudsman scheme (IOS) to redress grievances at select non-banking finance companies (NBFCs).

RBI keeps policy rate unchanged 8th time in a row; maintains accommodative stance

RBI’s Monetary Policy Committee (MPC) decided to keep key rates unchanged, said Governor Shaktikanta Das, announcing the outcome of the three-day bi-monthly review on Friday. Das said the MPC voted to keep the repo rate unchanged at 4% and maintained an accommodative stance to support growth. Reverse repo rate also remains unchanged at 3.35%.

The IOS will be on the lines of a similar system adopted at banks and will redress grievances related to deficiencies in service, Governor Shaktikanta Das said, announcing the new measure in the statement on regulatory policies along with the bi-monthly review of the monetary policy.

“The increased significance, strength and reach of NBFCs across the country have necessitated having in place better customer experience including grievance redress practices,” he said.

Das said over the last few years, the RBI has taken a slew of measures to improve consumer protection at NBFCs which include asking such lenders to appoint nodal officers to address grievances in 2013 and launch of the ombudsman scheme for NBFCs in 2018.

“With a view to further strengthen the internal grievance redress mechanism of NBFCs, it has been decided to introduce the Internal Ombudsman Scheme (IOS) for certain categories of NBFCs which have higher customer interface,” he said.

There will be an internal ombudsman at the top of the NBFCs’ internal grievance redress mechanism to examine customer complaints which are in the nature of deficiency in service and are partly or wholly rejected by the NBFCs, he said, adding detailed instructions on the same will be issued separately.

Meanwhile, Das also announced a six month extension in the facility which allows banks to on-lend through NBFCs and get the priority sector lending tag, till March 2022.

He reminded that bank lending to registered NBFCs (other than micro-lenders) for on-lending to agriculture (investment credit), Micro and Small enterprises and housing (with an increased limit) was permitted to be classified as priority sector lending up to certain limits in August 2019.

Increased traction has been observed in delivering credit to the underserved/unserved segments of the economy through the scheme, which was last extended till September 30 in April, Das said.

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