RBI releases Annual Report of Ombudsman Schemes 2020-21
The Reserve Bank of India (RBI) today released the Annual Report of the Ombudsman Schemes for the financial year 2020-21, which was prepared for the nine-month period from July 1, 2020 to March 31, 2021, in accordance with the change in the RBI’s Financial Year from ‘July – June’ to ‘April – March’ with effect from July 1, 2020. The Banking Ombudsman Scheme, 2006 (BOS), the Ombudsman Scheme for Non-Banking Financial Companies, 2018 (OSNBFC), and the Ombudsman Scheme for Digital Transactions, 2019 (OSDT), as well as major developments and the way forward in the area of consumer protection, are all covered in the Annual Report. The following are some highlights from the Annual Report:
A. Activities under BOS, OSNBFC and OSDT
i. During the reporting period, the total number of complaints received under all three Ombudsman Schemes grew by 22.27 percent on an annualised basis, reaching 3,03,107.
ii. The BOS accounted for 90.13 percent of all complaints received under the three Ombudsman Schemes (i.e. 2,73,204). The number of complaints received under OSNBFC and OSDT were 8.89% and 0.98 percent of the overall number of complaints, respectively.
iii. The BOS received the most complaints on (a) ATM/debit cards; (b) mobile/electronic banking; and (c) credit cards, accounting for 42.74 percent of the overall number of complaints, compared to 44.65 percent the previous year. The key areas of complaint under the OSNBFC were (a) non-compliance with the Fair Practices Code; (b) non-compliance with RBI orders; and (c) collection of charges without prior notice, which accounted for 75.32 percent of complaints, up from 63.23 percent the previous year.
iv. Despite a higher volume of complaints, the total disposal rate rose to 96.59 percent, up from 92.52 percent the previous year, thanks to CMS’s end-to-end digitization of complaint processing.
v. Of the maintainable complaints, 72.67 percent were resolved by mutual agreement i.e. through intervention of the Ombudsman offices / conciliation / mediation efforts.
B. Important developments during the year 2020-21
The Consumer Education and Protection Department (CEPD) took the following steps to improve the grievance resolution system this year:
i. A comprehensive framework for strengthening bank grievance redress mechanisms was established, which included enhanced disclosures on customer complaints, recovery of redress costs by Ombudsmen from banks for complaints received in excess of peer group averages, and an annual review of bank grievance redress mechanisms.
ii. Significant groundwork was laid for the integration of the three Ombudsman Schemes into the “Reserve Bank Integrated Ombudsman Scheme (RB-IOS), 2021,” the establishment of the Centralised Receipt and Processing Center, as well as a Contact Center, the revamping of CMS in anticipation of the launch of the RB-IOS, 2021, and initiatives to improve the effectiveness of consumer complaint resolution. Since then, on November 12, 2021, the Hon’ble Prime Minister has introduced the RB-IOS.
iii. Print and electronic media were used to conduct education and awareness initiatives.
C. Way forward
During the year April 1, 2021 to March 31, 2022 the following activities are planned:
i. Intensify initiatives towards consumer awareness and financial education.
ii. Improve quality and speed of complaint disposal by enhancing CMS capabilities.
iii. Undertake Annual Assessment of banks under the framework for strengthening grievance redress mechanism in banks and review the framework.
iv. Further consolidation of regulatory guidelines on Consumer Protection and Customer Service.