RBI revamps customer grievance redressal: Here's what changes for bank, NBFC customers

The Reserve Bank of India (RBI) has rolled out a revamped grievance redressal framework for customers of banks and other regulated financial entities, with the revised Integrated Ombudsman Scheme (RB-IOS), 2026 coming into effect from July 1. Replacing the 2021 framework, the new scheme aims to make complaint resolution faster, simpler and more consumer-friendly while significantly enhancing the compensation available to customers in cases of deficiency in service.

The revised scheme seeks to strengthen customer protection by providing a faster, cost-free and non-adversarial mechanism to resolve complaints against banks, non-banking financial companies (NBFCs), prepaid payment instrument issuers, payment system participants and credit information companies.

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What is the RBI Integrated Ombudsman Scheme?

The Integrated Ombudsman Scheme is a grievance redressal mechanism operated by the RBI that allows customers to file complaints against regulated financial entities if they face deficiencies in service. The scheme follows the "One Nation, One Ombudsman" principle, meaning customers do not have to identify a specific ombudsman office based on geography.

Which entities are covered?

The scheme covers commercial banks, regional rural banks, scheduled and certain co-operative banks, non-banking financial companies (NBFCs), prepaid payment instrument (PPI) issuers, payment system participants, credit information companies and other regulated entities notified by the RBI under the framework.

Why did the RBI introduce a new scheme?

The RBI replaced the 2021 framework to strengthen customer grievance redressal, improve operational efficiency, clarify complaint procedures and expand the powers available under the scheme. The revised framework is intended to provide a more effective, transparent and consumer-friendly grievance resolution mechanism.

Customers must first approach their bank or NBFC

Before approaching the RBI Ombudsman, customers must first lodge a complaint with the concerned regulated entity. Customers can approach the RBI Ombudsman only if the entity does not respond within 30 days, or within the timeline prescribed by the RBI, the National Payments Corporation of India (NPCI) or card network rules, or if the customer is dissatisfied with the response received.

A complaint can be filed with the RBI Ombudsman within 90 days of receiving the regulated entity's final response or after the expiry of the prescribed response period if no reply is received.

What complaints can be filed?

Customers can file complaints relating to deficiencies in service, including unauthorised transactions, ATM and card disputes, digital payment failures, delays in refunds, loan servicing issues, credit report errors, disputes over charges and fees, deposit account problems, payment settlement failures, harassment by recovery agents and other customer service deficiencies.

However, certain complaints are not maintainable under the scheme. These include commercial decisions such as loan sanction or pricing decisions, matters already pending before courts or tribunals, anonymous complaints, complaints filed without first approaching the regulated entity, employee-employer disputes, vendor-related disputes and matters involving policy decisions or suggestions.

Expanded role for Deputy Ombudsmen

One of the key changes in the 2026 scheme is the expanded role of RBI Deputy Ombudsmen. They can examine complaints relating to deficiencies in service, reject complaints that do not satisfy maintainability criteria, facilitate settlements between parties and assist in expediting complaint resolution. Deputy Ombudsmen also have the power to close complaints falling under specified provisions of the scheme.

No lawyer required

The scheme is designed to be simple and non-adversarial. Customers may represent themselves or appoint an authorised representative, subject to the conditions prescribed under the scheme.

Higher compensation for customers

The RBI has enhanced the compensation limits under the new scheme. The Ombudsman can award compensation of up to ₹30 lakh for consequential financial losses arising from a deficiency in service. In addition, compensation of up to ₹3 lakh can be awarded for loss of time, expenses incurred, harassment and mental anguish.

Under the previous 2021 framework, the corresponding compensation limits were ₹20 lakh and ₹1 lakh, respectively.

While there is a cap on the compensation that can be awarded, there is no monetary limit on the value of disputes that can be brought before the Ombudsman.

If the Ombudsman finds a deficiency in service, it can direct the regulated entity to rectify the deficiency, perform specific obligations, refund money, pay compensation or take other remedial measures. The Ombudsman may also facilitate a settlement between the parties.

Appeals and complaint filing

Both regulated entities and customers can appeal against an Ombudsman award within the prescribed timelines. The Appellate Authority is the Executive Director in charge of the RBI's Consumer Education and Protection Department or any other officer of equivalent rank authorised by the Governor of the RBI.

However, regulated entities cannot appeal in cases where an award has been passed due to their failure to furnish satisfactory and timely information or documents.

Complaints can be filed through the RBI's Complaint Management System (CMS) portal, by email or by submitting a physical application to the Centralised Receipt and Processing Centre (CRPC) established by the RBI in Chandigarh.

The RBI also operates a dedicated contact centre through the toll-free number 14448, which provides guidance in multiple Indian languages on filing complaints and understanding the grievance redressal process.

The biggest change under the revised framework is the RBI's attempt to make customer grievance redressal more structured, faster and consumer-friendly by increasing compensation limits, strengthening the role of Deputy Ombudsmen, establishing a centralised complaint processing mechanism and clarifying complaint procedures.