Home / Industry / RBI moots an ombudsman for NBFCs

Mumbai: The Reserve Bank of India (RBI) has proposed the setting up of an ombudsman specifically for non-banking finance companies (NBFCs). This is part of a series of reforms the regulator is planning, it said in its Trends and Progress of Banking in India report released on Thursday.

An ombudsman could allow customers to lodge complaints against NBFCs for levying charges without prior notice, non-observance of RBI directives on interest rates, non-acceptance of applications for loans without valid reasons or non-compliance of guidelines on engaging recovery agents. For banks, the ombudsman was appointed two decades ago.

According to data available in the report, the 15 regional offices of the banking ombudsman received 95,377 complaints in fiscal 2016 compared to 85,131 the previous year.

“We welcome an external mechanism for looking into customer complaints against NBFCs. Currently, each company has a grievance redressal mechanism under the fair practices code," said Raman Agarwal, chairman of the Finance Industry Development Council, industry body for NBFCs. While banks have slowed down lending due to asset quality pressures, NBFCs have seen a decent growth. During the year 2015-16, NBFCs registered credit growth of 15.5% compared to 9.1% in non-food credit of banks.

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