RBI Ombudsman Scheme to include state and central co-operative banks from November 1

The Reserve Bank of India (RBI) on Tuesday, October 7, directed that the State Co-operative Banks and Central Co-operative Banks, as defined in the Banking Regulation Act, 1949, shall also be treated as a ‘Regulated Entity’ under the Reserve Bank - Integrated Ombudsman Scheme, 2021.

This means that the Integrated Ombudsman Scheme 2021 will apply to State Co-operative Banks and Central Co-operative Banks (except to the extent specifically excluded under the scheme). 

The new rule will come into effect on November 1, 2025. 

With this development, the RBI Ombudsman scheme will now cover the following: 

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 a deposit size of ₹50 crore and above as on the date of the audited balance sheet of the previous financial year;

All Non-Banking Financial Companies (excluding Housing Finance Companies) which (a) are authorised to accept deposits; or (b) have a customer interface, with an asset size of ₹100 crore and above as on the date of the audited balance sheet of the previous financial year;

All system participants, as defined under the scheme, and credit information companies.

What is the Integrated Ombudsman Scheme?

The RBI’s Integrated Ombudsman Scheme (RB-IOS), launched in November 2021, is a unified system for resolving customer complaints against Reserve Bank of India (RBI)-regulated entities. It integrates three previous Ombudsman schemes into a single mechanism aimed at providing a cost-free way to resolve grievances.

This means that customers can file a complaint with the same Ombudsman irrespective of the type of regulated entity, as long as it’s covered under the scheme.

RBI strengthens consumer grievance mechanism

RBI governor Sanjay Malhotra, while concluding the monetary policy meet (MPC) on October 1, announced three consumer-centric measures to improve both the bank and RBI ombudsman schemes. 

"The Internal Ombudsman mechanism is proposed to be strengthened to make grievance redressal by regulated entities more effective. The RBI Ombudsman Scheme is also being revised for improved grievance redressal, and rural cooperative banks are being included under the ambit of the Scheme,” Governor Malhotra said.