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Business News/ News / India/  RBI introduces Internal Ombudsman mechanism for Credit Information Companies
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RBI introduces Internal Ombudsman mechanism for Credit Information Companies

The RBI has asked credit info companies to appoint internal ombudsman by April 1, 2023.

'Every CIC shall appoint the internal ombudsman for a fixed term of not less than three years, but not exceeding five years...,' an RBI circular said. (Photo: Mint)Premium
'Every CIC shall appoint the internal ombudsman for a fixed term of not less than three years, but not exceeding five years...,' an RBI circular said. (Photo: Mint)

To enhance the effectiveness of its grievance redressal systems, the Reserve Bank of India (RBI) has urged Credit Information Companies to designate an internal ombudsman (IO) by April 1, 2023.

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Only complaints that the CIC has already reviewed but rejected in whole or in part will be handled by the IO. Direct complaints from complainants or members of the public won't be handled by it, the RBI said in a circular on October 6.

The Central Bank made the decision in August to include CICs in the scope of the RBI-Integrated Ombudsman Scheme 2021 in order to broaden its appeal. The RBI claimed that the action would give clients of regulated businesses a free alternative dispute resolution method for complaints regarding CICs.

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"Every CIC shall appoint the internal ombudsman for a fixed term of not less than three years, but not exceeding five years...," the circular said.

The IO position cannot at any moment be left unfilled, hence the CIC must make sure of that, the circular said. Furthermore, it stated that the IO will not be handling any complaints involving fraud and misappropriation, with the exception of those brought about by a CIC service failure.

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The internal ombudsman will, in accordance with the circular, report administratively to the Managing Director or Chief Executive Officer of the CIC and functionally to the Board. The areas of customer service and customer complaint resolution will be examined as part of the RBI's supervisory evaluation. The RBI stated that the Central Bank would also look at cases where the IO's decision was rejected by the CIC.

(With PTI inputs)

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Published: 06 Oct 2022, 08:54 PM IST
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