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The Reserve Bank of India has issued Ombudsman Scheme for Non-Banking Financial Companies, 2018 to appoint Nodal Officer/Principal Nodal Officer to address the grievances of the customer in Financial Sector more or less covered by NBFC via Notification No. RBI/2017-18/133 DNBR. PD, CC. No. 091/03.10.001/2017-18 dated 23rd February 2018 from immediate effect.
Let’s discuss in brief regarding the Ombudsman Scheme-2018 for NBFC.
Table of Contents
NBFC as defined in Section 45-I(f) of Reserve Bank of India Act, 1934 and registered with RBI under Section 45-IA of Reserve Bank of India Act, 1934 which
Required to comply with the provisions of the Ombudsman Scheme for Non-Banking Financial Companies, 2018.
To being with the scheme will be operationalized for all deposit accepting NBFC and further extended to include remaining identified categories of NBFC.
It is initially introduced to four metro cities viz. Chennai, Kolkata, Mumbai and New Delhi.
Non-Banking Financial Companies –Infrastructure Finance Company (NBFC-IFC), Core Investment Company (CIC), Infrastructure Debt Fund-Non Banking Financial Company (IDF-NBFC) and NBFC under liquidation are excluded from the ambit of Scheme.
The Scheme shall come into effect and force from 23rd February 2018.
It means any representation or allegation made in writing or through electronic means, containing a grievance alleging deficiency in service.
Deficiency in service is explained further in scheme however sample of deficiency in services are as below:-
And so on. List of deficiency in service goes on and extend up to (a) to (m).
Any person who has grievances against NBFC on the grounds of Deficiency of Service, himself or through his authorized representative other than Advocates, make a complaint to Ombudsman within whose jurisdiction the Branch/Registered office of NBFC complained against, is located.
The complaint when in writing shall be duly signed by the complainant or his authorized representative should state the following issues clearly:-
Further complaint made through electronic means shall also be accepted by the Ombudsman. Moreover, the ombudsman shall also entertain complaints covered by this scheme received from the Central Government or RBI or other financial regulator and forwarded to him for disposal.
To carry out the function, Ombudsman has the power to call for information from both concern parties to get the informed decision on the matter stated above.
Both the concerned party, Complainant and Nodal Officer of Concern NBFC will get a copy of Complaint and argument will go through on and subject to agreeing or non-agreeing and acceptability of fact the Ombudsman can suggest for settlement on agreeing on terms and condition for both parties.
During the period of stating argument by both parties, ombudsman allows to get settle the case otherwise he after hearing the case, pass an award either allowing or rejecting the complaint. Ombudsman passing the judgment can’t direct the payment of an amount more than actual loss suffered by the applicant or One Million Rupees whichever is lower. However, in all sort of cases subject to his discretion, he has the power to award compensation of not exceeding Rs. One lakhs to the aggrieved person considering the loss of time, expenses incurred harassment and mental anguish suffered by the complainant.
The award shall state briefly the reasons for passing the Award.
A copy of the Award shall be sent to the complainant and the NBFC free of cost.
An Award allowing the complaint shall lapse and be of no effect unless the complainant furnishes to NBFC and Ombudsman concerned within a period of 30 days from the date of receipt copy of the Award, letter of acceptance of the award in full and final settlement of claim subject to there is no appeal from both party concerned.
Any person aggrieved by an Award Clause or rejecting the complaint on above reason can have access to go for appeal in the appellate authority within 30 days of the date of receipt of communication of Award or rejection of the complaint.
There shall be an obligation of concerned NBFC to implement the settlement arrived with the complaint or award passed by Ombudsman when it becomes final and send a report in this regard to RBI within a period of 15 days of the award became final. Non-address of order is initiated under provisions of Reserve Bank of India Act, 1934 as it deems fit.
NBFC to display salient features of the scheme for knowledge of the public in English, Hindi and Vernacular Language in all offices and branches, in such manner that a person visiting office or branch has adequate information of the scheme.
Head Office Principal Nodal Officer (PNO) or Nodal Officer (NO) details to send to Mumbai (Chief General Manager, Consumer Education, and Protection Department, RBI, Central Office, 1st Floor, Amar Building, Sir P.M. Road, Mumbai 400001
Branch or regional PNO/NO of NBFC details to be sent to RBI Ombudsman of the concerned zone.
Read More: Amendment in RBI Act: What is there for NBFCs?.
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