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Customer complaints against banks and NBFCs have increased significantly in recent years. People are repeatedly complaining about delays in loan approval, excessive charges, and problems with digital payments.
Often, a proper solution is not received, even after filing a complaint. This leads to growing dissatisfaction among customers and a decline in trust in financial institutions. The RBI believes that the complaint resolution process needs to be strengthened.
Recently, RBI issued new RBI Internal Ombudsman guidelines on 14th January 2026, regarding the Internal Ombudsman. The primary goal is to ensure that customer complaints are reviewed internally within the institution so that minor issues do not escalate directly to the RBI.
In this article, we will learn about the RBI’s Internal Ombudsman Guidelines, 2026, the necessity of these rules, and the organizations’ that need to apply them.
An Internal Ombudsman is an officer who conducts the final internal review of customer complaints. When a bank or NBFC rejects a complaint, the Internal Ombudsman reviews that decision.
On January 14, 2026, the RBI issued new Internal Ombudsman rules, 2026, separately for banks, NBFCs, and other financial institutions. The rule creates a high-level review system within the institution for complaints that are not properly investigated. This ensures that complaints are resolved effectively. All the NBFC registration seekers must understand the RBI’s Internal Ombudsman Guidelines., 2026.
The RBI states that the RBI Integrated Ombudsman Scheme 2026 will apply to all types of large financial institutions. This will ensure that the rules for handling customer complaints are almost the same everywhere.
The organizations that need to follow RBI’s Internal Ombudsman Guidelines, 2026:
All these organizations will now have to handle customer complaints more responsibly.
Ensure compliance with the RBI Internal Ombudsman framework for banks and NBFCs with end-to-end professional support.
The RBI has strengthened this Internal Ombudsman system primarily to resolve customer complaints quickly and accurately. This will prevent customers from approaching the external ombudsman for every minor or major issue.
The main objectives of this system are:
This will make the grievance redressal process more transparent and trustworthy.
The experience and expertise of the person appointed as Internal Ombudsman are crucial. The RBI has laid down some clear conditions in this regard.
An Internal Ombudsman can be:
This experience can be in any of the following areas:
Most importantly, they must be able to work independently and professionally.
The RBI has stated that every regulated entity must appoint at least one Internal Ombudsman. Large banks or NBFCs may appoint multiple IOs based on their firm size and the number of complaints. The complete responsibility for these appointments’ resets with the organization’s board and senior management.
The Internal Ombudsman will not directly receive complaints from customers. The complaint must first be addressed through the bank’s or NBFC’s own grievance redressal system.
The Internal Ombudsman will only review those complaints:
Internal Ombudsman officer acts like an internal appellate authority and verifies whether the previous decision was correct. The officer ensures that the decision was fair and taken in accordance with RBI regulations. This system reduces customer dissatisfaction and eliminates the need to approach the RBI Ombudsman unnecessarily.
Ensure alignment with RBI Internal Ombudsman guidelines through expert-led advisory and implementation support.
The key function of the Internal Ombudsman, as per RBI Internal Ombudsman Guidelines, 2026, is to review the decisions on grievance redressal impartially. The officer is not directly involved in the day-to-day operations, so there is less scope for bias in the decisions.
The key functions of the Internal Ombudsman are as follows:
So, grievance redressal becomes more professional and credible.
RBI clearly states that implementing the Internal Ombudsman guidelines, 2026 will be part of their regular supervision process. This will not only be necessary to make rules but also to follow them properly.
RBI’s Department of Supervision monitors:
If an organization does not follow the RBI’s Internal Ombudsman Guidelines, 2026, RBI has authority to observe, direct, or take necessary action. The entire system aims to improve the quality of service.
These new RBI’s Internal Ombudsman Guidelines, 2026, are beneficial for both the customers and the financial institutions. Customers can now expect a fairer and faster resolution of complaints.
Overall, adhering to the Internal Ombudsman guidelines brings a positive change.
While complying with the RBI Integrated Ombudsman Scheme 2026, organizations should keep a few things in mind:
RBI guidelines on Internal Ombudsman are a crucial step when it concerns customer protection. The grievance redressal system of banks and NBFCs will be more robust, transparent, and accountable.
However, it is not enough to appoint an IO by yourself. Selecting the right firm allows independent working and implementing guidelines in accordance with the rules that are equally important. Incorrect or incomplete implementation can also create regulatory risks.
Enterslice ticks all the checkboxes for your requirements and assists with:
So, it is always good to seek expert help from Enterslice for proper compliance.
The Internal Ombudsman is a senior and independent officer within a bank or NBFC. The officer investigates the complaints previously dealt with within the organization, but the customer was not satisfied. Re-examining the complaints previously dismissed or partially resolved increases fairness in the resolution of complaints.
RBI has seen that many customer complaints are not being resolved properly. So, people are going directly to the RBI’s Internal Ombudsman. This takes time and increases the problem. Therefore, RBI has asked that the complaints should be dealt with properly within the organization itself. So, the new Internal Ombudsman rules have been brought.
Appointing an Internal Ombudsman is applicable to all large financial institutions, including: All Commercial Banks Small Finance Banks Payments Banks NBFCs Prepaid Wallets and Payment Companies Credit Information Companies All these organizations are now required to have at least one Internal Ombudsman.
No, a customer cannot complain directly to the Internal Ombudsman. First, the complaint must be submitted to the customer service department of the bank or NBFC. If the complaint is completely or partially dismissed, it is sent to the Internal Ombudsman for review.
The Internal Ombudsman does not look at new complaints. He looks after those complaints that have already been examined within the organization. Generally, he looks at: Complaints that have been completely dismissed. Complaints that have been partially resolved. In this case, he re-examines whether the previous decision was right or not.
n individual must have relevant work experience to become an Internal Ombudsman. He/She can be a working or retired officer. His/her rank should be equivalent to General Manager with at least 7 years of work experience. This experience is applied in banking, NBFC, payment systems, or customer service sectors.
Yes, according to the new rules of RBI, the appointment of Internal Ombudsman is mandatory for NBFCs. Every NBFC must have at least one IO. If any NBFC does not follow this rule, then problems may arise during the supervision of RBI in the future.
The Internal Ombudsman creates another opportunity for verification in the resolution of complaints. This provides an opportunity to correct wrong decisions. The customer feels satisfaction. So, the bank or NBFC can understand where the problem is recurring and how to fix it.
RBI will regularly monitor the implementation of the Internal Ombudsman system. The Department of Supervision of RBI will investigate: Whether customer service is being provided properly. Whether the grievance redressal mechanism is working. Whether the Internal Ombudsman rules are being followed. If the rules are not followed, the RBI can take necessary action.
The Internal Ombudsman rules may seem complicated to many organizations. Enterslice helps in this entire process. Our experts help to create IO frameworks, write necessary policies, give compliance advice, and prepare RBI inspections. This helps banks and NBFCs to comply with the rules.
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