RBI strengthens grievance system to improve complaint resolution and services
What's the story
The Reserve Bank of India (RBI) is revamping its consumer grievance redressal system, including Rural Co-operative banks under the Ombudsman scheme. The move was announced by RBI Governor Sanjay Malhotra on October 1, 2025. The changes are aimed at making complaint resolution more effective and improving service standards for consumers.
Mechanism upgrade
Strengthening internal ombudsman systems
The RBI is also strengthening the internal ombudsman systems of regulated entities (REs) such as banks. This is to ensure that their grievance redressal systems are more effective. Malhotra said, "The Internal Ombudsman mechanism is proposed to be strengthened to make grievance redressal by regulated entities more effective." He added that the RBI Ombudsman Scheme is being revised for improved grievance redress.
Grievance escalation
Two-tier structure for grievance redressal
The RBI is also considering a two-tier structure within REs for grievance redressal before it escalates to the Internal Ombudsman (IO). This move is aimed at providing a meaningful and timely resolution of customer grievances within the REs. A draft of the Master Direction outlining these revisions will be published shortly for public feedback, further improving service standards and consumer confidence.
Scheme details
RB-IOS launched in November 2021
The Reserve Bank - Integrated Ombudsman Scheme (RB-IOS), 2021, launched on November 12, 2021, provides customers of REs a speedy and cost-effective alternative grievance redress mechanism. The scheme currently covers commercial banks, regional rural banks, and scheduled primary (urban) co-operative banks with deposits of ₹50 crore and above. It also includes select non-banking financial companies and credit information companies.
Scheme expansion
Inclusion of rural co-operative banks
To enable customers of rural co-operative banks to access the RBI Ombudsman mechanism, state co-operative banks and district central cooperative banks are being included under the scheme. A notification regarding this will be issued shortly. The move is part of a broader effort by the RBI to enhance clarity, simplify procedures, and reduce timelines for timely and effective redress.