The Reserve Bank of India Tuesday said state co-operative banks and central co-operative banks will come under the central bank's Integrated Ombudsman Scheme with effect from Nov. 1. The move will enable customers of rural co-operative banks access to the ombudsman mechanism.

With this, the ombudsman scheme will cover all commercial banks, regional rural banks, state co-operative banks, central co-operative banks, scheduled primary (urban) co-operative banks, and non-scheduled primary (urban) co-operative banks with deposits size of INR 500 million and above. 

All non-banking financial companies, excluding housing finance companies, which can accept deposits and have assets of INR 1 billion and above also come under the ombudsman scheme. The central bank had introduced the integrated ombudsman scheme to provide customers of regulated entities a speedy, cost-effective, alternative grievance redress mechanism. 

RBI plans to empower ombudsman to award up to `30 lakh compensation to aggrieved bk customers

The RBI on Tuesday released draft master directions for the Internal Ombudsman for regulated entities, as well as the draft norms for the Integrated Ombudsman Scheme, 2025. The central bank has sought public comments on both by Oct. 28. 

According to the proposed directions for the Internal Ombudsman for regulated entities, a firm must have one internal ombudsman. The internal ombudsman should not be a current or past employee of the entity and must have at least seven years of experience in areas such as banking, and non-banking finance.  As per the draft guildelines for the Integrated Ombudsman Scheme, the RBI can appoint one or more of its officers as ombudsman for three years. This scheme was first launched in November 2021 and provides quick, cost-effective, and expeditious alternate grievance redressal mechanism. 

The draft directions said there is no limit on the amount in a dispute that can be brought before the ombudsman. "However, for any consequential loss suffered by the Complainant, the Ombudsman shall have the power to provide a compensation up to 30 lakh," the draft norms said.