RBI Notifies Rules For Internal Ombudsman Appointment At Credit Bureaus

The Reserve Bank of India has released directions for the appointment of Internal Ombudsman at credit bureaus.

First notified in August, the rules direct bureaus to appoint such officers by April 1, 2023.

The Internal Ombudsman at credit bureaus will deal with consumer complaints that have either partially or fully been rejected by the bureau.

Credit bureaus and IOs have to ensure that the customer receives the final decision within 30 days of the complaint being received, according to the directions.

The decision to include credit bureaus in the RBI's integrated ombudsman scheme was announced in August.

"This will provide a cost-free alternative redress mechanism for grievances against CICs (Core Investment Companies)," RBI Governor Shaktikanta Das had said at the time.

Credit bureaus will be required to appoint IOs for a three-to-five year tenure, according to the directives.

The RBI has also laid out the following criteria for such appointments:

• IO shall either be a retired or a serving officer, not below the rank of Deputy General Manager or equivalent in any financial sector regulatory body, CIC, a non-banking financial company or bank, with necessary skills and experience of at least seven years.

• IO should not previously have been employed, nor presently be employed, by the bureau or its related parties.

• IO shall not be eligible for reappointment or extension of term.

• Bureaus may appoint more than one IO depending upon the volume of complaints anticipated.

Complaints related to fraud and misappropriation will be outside the ambit of IOs, unless they resulted from a deficiency in service from the bureau, the directions noted.

The bureau and the IO "shall ensure that the final decision is communicated to the complainant within 30 days from the date of receipt of the complaint", according to the directions.

The RBI will also require bureaus to provide quarterly and annual updates with details regarding how many complaints were referred to and dealt with by the IO, according to the guidelines.

The central bank will also review complaints where the IO's decision has not been accepted by the bureau.