On January 27, 2021, the Reserve Bank of India (RBI) announced a comprehensive framework to strengthen the grievance redress mechanism in banks. This newly introduced framework is on the lines of ‘Statement on Developmental and Regulatory Policies’ issued as part of the Monetary Policy statement on December 4, 2020. Click here to Read monetary policy
The framework is comprised of 3 major components:
i.Enhanced disclosures on complaints to be made by the banks
ii.Recovery of the cost of redress of maintainable complaints from the banks against whom the number of complaints received in the Offices of Banking Ombudsman (OBOs) are in excess of their peer group averages
iii.Intensive review by RBI of the grievance redress mechanism of banks having persisting issues in their redress mechanism
Objectives of Framework:
–To provide greater insight into the volume and nature of complaints received by the banks.
–To check quality and turnaround time of redressal.
–To promote satisfactory customer outcomes and improved customer confidence.
–To identify remedial steps taken by the banks having persisting issues in grievance redress mechanism.
–The grievance redressed process through Offices of Banking Ombudsman (OBOs) will continue to remain free for the banks and customers under BO Scheme, 2006 (BOS).
–Banks were advised to disclose in their annual reports, summary information regarding the complaints handled by them.
–To further strengthen grievance redress mechanisms, banks are mandated to appoint an Internal Ombudsman (IO) to function as an independent and objective authority at the apex of their grievance redress mechanism.
Recent Related News:
i.The central bank will put in place minimum security standards for payment systems, following a surge in digital transactions during the pandemic. In this regard, it will issue Reserve Bank of India (Digital Payment Security Controls) Directions, 2020 for regulated entities.
ii.RBI expects the economy to record positive growth in the second half of the FY21. The economy contracted by 23.9%(-23.9%) in the first quarter and 7.5% in the second quarter on account of the COVID-19 pandemic.
About Reserve Bank of India (RBI):
Formation– 1 April 1935
Governor– Shaktikanta Das
Headquarters– Mumbai, Maharashtra
Deputy Governors– 4 (Bibhu Prasad Kanungo, Mahesh Kumar Jain, Michael Debabrata Patra, and M Rajeswar Rao)