PPB Unit AChapter Notes4–5 Marks Expected

Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Principles & Practices of Banking | Unit A · Chapter 19

Internal machinery for grievance redressal, the complete lifecycle of a complaint under RBI-IOS 2021 — from CRPC filing to Award and Appeal — with all critical numbers and timelines.

By Bankopedia.co.inUpdated 2026JAIIB PPB · Module A

📌 Why This Chapter Matters in JAIIB

Expect 4–5 questions from this chapter. The Ombudsman Scheme is one of the highest-yield topics in PPB — MCQs regularly test the 22 Ombudsmen count, CRPC location, timelines (30 days / 1 year / 15 days / 30 days), Award compensation ceilings (₹1L and ₹20L), non-maintainability grounds, and the IO/CCSO threshold (10 banking outlets).

All Key Numbers — Chapter 19 at a Glance

1995Banking Ombudsman Scheme first introduced

2018NBFC Ombudsman Scheme introduced

2019Ombudsman Scheme for Digital Transactions introduced

Nov 2021All three merged into RBI-IOS 2021

22Ombudsmen appointed as of November 2021

ChandigarhLocation of CRPC (Central Receipt and Processing Centre)

30 daysNo-reply window → complainant may approach Ombudsman

1 yearTime limit to file with Ombudsman after RE's reply

1 year + 30 daysTime limit to file with Ombudsman if no reply from RE

15 daysRE must file written response to Ombudsman

30 daysComplainant must accept Award (else lapses)

No ceilingActual amount in dispute under Award

₹1 lakhMax compensation: loss of time, expenses, harassment, mental anguish

₹20 lakhMax compensation: consequential loss (actual loss)

7 daysBranch to refer unresolved complaint to RO/ZO

1 monthAfter this, unresolved complaint goes to Nodal Officer

90 daysResolve electronic transaction complaints from receipt date

>10 outletsThreshold for scheduled bank to appoint IO (CCSO) — excl. RRBs

₹50 croreDeposit threshold for Non-Scheduled Primary Co-op Banks under IOS 2021

Section 1

Model Policy on Grievance Redressal & Internal Machinery

🧠 5 Principles of Model Policy — Mnemonic "CAFBE"

C — Customers treated fairly at all times

A — Address complaints with courtesy and in time

F — Forum escalation avenues and alternative remedy informed

B — Bank treats all complaints efficiently and fairly

E — Employees work in good faith without prejudice to customer interests

"Complaints Always Find Better Exits" — fair, timely, informed, efficient, unbiased.

Complaint Escalation Path

Counter Staff
First point of contact; trained to resolve and interact
Branch Manager
Responsible for branch-level resolution; may contact complainant personally
Regional / Zonal Office
Unresolved complaints referred within 7 days with Branch Manager comments
Head Office — Customer Service Section
If still unresolved; decision taken + letter sent to complainant + instructions to branch
Banking Ombudsman (RBI-IOS 2021)
If bank's response is unsatisfactory — within 1 year of bank's reply

Key Filing Requirements

→Complaint form on bank's website homepage + Nodal Officer name/address displayed at all branches + Ombudsman portal link (https://cms.rbi.org.in)
→All resolution letters to customers must state: right to approach Ombudsman within 1 year of bank's reply + Ombudsman's particulars
→Complaints unresolved within 1 month → copy forwarded to Nodal Officer under Ombudsman Scheme

⚠️ MCQ 4 Trap — What is NOT adequate for Ombudsman filing?

Answer: (a) Dropping in complaint box. A complaint dropped in a box gives no acknowledgement or reference number — you cannot prove when or if the bank received it. Email to specified ID, submission at branch with acknowledgement, and complaint through website all create a verifiable record.

Section 2

RBI — Integrated Ombudsman Scheme 2021: Introduction

Ombudsman Scheme Timeline

1995
Banking Ombudsman Scheme launched — covered Commercial Banks, RRBs, Scheduled Primary Co-operative Banks
2018
Ombudsman Scheme for NBFCs (for customers of larger NBFCs)
2019
Ombudsman Scheme for Digital Transactions
November 2021
All three merged into RBI-Integrated Ombudsman Scheme 2021 (IOS 2021). "One Nation One Ombudsman" approach. Covers ALL RBI-regulated entities including Non-Scheduled Primary Co-op Banks with deposits ≥ ₹50 crore.

Ombudsmen

22 Ombudsmen as of November 2021. Appointed by RBI (its own officers). Offices at RBI offices, mostly state capitals. Max tenure: 3 years at a time. Deputy Ombudsman may also be appointed.

CRPC — Chandigarh

All complaints go to Central Receipt and Processing Centre, Chandigarh — not to the Ombudsman directly. CRPC forwards to the concerned Ombudsman. Even direct complaints to BO are first forwarded to CRPC.

When to file with Ombudsman

RE rejected complaint (wholly or partly) and not satisfied; or no reply within 30 days from RE.

Three modes to file

(i) Online portal: cms.rbi.org.in · (ii) Electronic (email) · (iii) Physical (post / courier / hand delivery). Filed personally or through authorised representative (not advocate — unless the advocate is the aggrieved party).

Section 3

Internal Machinery — Key Provisions

19.3.3

Online Dispute Resolution (ODR) System

Based on Payment System Vision-2021. RBI directed authorised Payment System Operators (PSOs) and participants (PSPs) in August 2020 to put in place ODR systems for failed payment transactions.

If grievance remains unresolved for up to 1 month → customer may approach RBI-IOS 2021. ODR to later extend beyond failed transactions. Customer may use web, IVR, app, call centre, SMS, branch, etc. Third-party app providers (TPAPs) must also provide ODR access in mobile app.

19.3.4

Electronic Transaction Complaints

Complaints must be resolved within 90 days of receipt (per Board-approved policy). Auto-acknowledgement with reference number immediately. System must record time/date of delivery and receipt — critical for determining customer liability. Customer must not lose interest (savings/current) or bear additional interest (credit card/OD/CC) due to the delay.

19.3.6

Strengthening Framework (Jan 2021) — 3 Components

1. Enhanced Disclosures in Annual Reports

Granular disclosures replacing earlier brief disclosures. Categories include ATM/Debit cards, Credit cards, Internet/Mobile banking, Mis-selling, Recovery agents, Pension/senior citizens, Loans, Levy of charges, Cheques/bills, Fair Practices Code, Staff behaviour, etc. Banks also to publish detailed complaint analysis on website at end of each financial year (excluding complaints resolved the following working day).

2. Recovery of Cost from Banks

If maintainable complaints at OBOs exceed peer group average, RBI recovers cost of redress from that bank. Peer groups based on asset size as on March 31 of previous year. Three metrics tracked:

→Average maintainable complaints per branch
→Average maintainable complaints per 1,000 accounts (deposit + credit)
→Average digital complaints per 1,000 digital transactions

3. Intensive Review

RBI will do annual assessments using CMS data. Banks with persisting issues will face an intensive review to identify systemic problems and initiate corrective measures.

19.3.7

Principal Nodal Officer (PNO)

Banks must appoint a PNO not below the rank of Chief General Manager. Responsible for functions related to the Ombudsman Scheme. Contact details must be prominently displayed on the bank's portal. Under CEPD (Consumer Education and Protection Department), RBI.

⚠️ MCQ 3 — PNO at which level?

Answer: (d) Head Office — not branch, regional, or zonal.

19.3.9

Internal Ombudsman (IO) / Chief Customer Service Officer (CCSO)

Started May 2015 (select banks). Formalised under Internal Ombudsman Scheme, September 2018.

Who must appoint: Scheduled banks with more than 10 banking outlets (excluding RRBs)

Who cannot be CCSO: Anyone who has previously worked in that same bank

Role: Examines complaints that are partly or wholly rejected by the bank — deficiency in service cases

Escalation: Bank must escalate ALL complaints not fully redressed to IO before conveying final decision. Customer does NOT need to approach IO separately.

Monitoring: Bank's internal audit + RBI regulatory oversight

⚠️ MCQ 2 — Internal Ombudsman is called?

Answer: (b) Chief Customer Service Officer (CCSO) — not Chief Compliance Officer, Chief Risk Officer, or Head-Internal Audit.

Section 4

IOS 2021: Processing & Resolution

CRPC Scrutiny — 3 Outcomes

Outcome	Action
Not Valid	Closed at CRPC; complainant advised accordingly
Not Maintainable	Separated based on 19.4.8 grounds; complainant advised
Valid & Maintainable	Assigned to Ombudsman; intimation to complainant; RE directed to submit written version

Resolution at OBO — Preferential Order (FMA)

Facilitation

First preference — facilitate direct discussion for mutual amicable agreement between RE and complainant.

Mediation & Conciliation

Ombudsman intervenes to forge an understanding. Still aiming for mutual agreement.

Award

Only if no agreement is feasible. Based on banking law/practice + RBI directions + relevant factors.

Proceedings at OBO — Key Rules

→Proceedings are summary in nature — not bound by rules of evidence
→RE must file written response within 15 days (extendable by Ombudsman for valid reasons)
→Ombudsman furnishes each party the other's documents for counter-response
→If RE does not respond: ex-parte proceedings + RE loses right of appeal on the resulting Award
→Confidentiality: Ombudsman shares information only when required by law, for natural justice, or with consent

When is a complaint "deemed resolved"?

(a) RE settles with complainant; OR
(b) Complainant agrees in writing that resolution is satisfactory; OR
(c) Complainant voluntarily withdraws the complaint

Section 5

The Award — Compensation Ceilings & Procedure

Type of Compensation	Ceiling
Actual amount involved in the dispute	No ceiling
Compensation for loss of time, expenses incurred, harassment, and mental anguish	Up to ₹1 lakh
Compensation for consequential loss (directly out of bank's act or omission)	Actual loss, ceiling ₹20 lakh

Steps After an Award

1.Award copy sent to complainant and RE.
2.Complainant must give acceptance letter (full and final settlement) to RE within 30 days of receiving award. If not, award lapses — unless an appeal has been filed.
3.RE must implement the Award after receiving acceptance, unless RE has filed an appeal.

Section 6

Appeal & Non-Maintainability Grounds

Appeal Before the Appellate Authority (AA)

Who is AA? Executive Director in-charge of the RBI Department administering the Scheme.

Who can appeal? Either the complainant or the RE — against an Award or an order of rejection.

RE exception: RE cannot appeal an Award issued for non-furnishing of documents/information by it.

RE sanction: RE can appeal only with prior sanction of Chairman or MD/CEO or, in their absence, ED/equal rank.

Time extension: AA may allow up to 30 additional days for filing if satisfied with reasons.

What can AA do?

(a) Dismiss the appeal
(b) Allow the appeal and set aside the Award/order
(c) Remand to Ombudsman for fresh disposal with directions
(d) Modify the Award/order and pass necessary directions
(e) Pass any other order as it may deem fit

AA order = same effect as an Ombudsman Award.

Grounds for Non-Maintainability (8 Types)

1.Commercial judgment / commercial decision of a Regulated Entity
2.Dispute between a vendor and a Regulated Entity in an outsourcing contract
3.A grievance not addressed to the Ombudsman directly (but this is about jurisdictional procedure)
4.General grievances against Management or Executives of a Regulated Entity
5.Dispute in an action in compliance with orders of a statutory or law-enforcing authority
6.A service not within the regulatory purview of RBI
7.Dispute between Regulated Entities
8.Dispute involving the employee-employer relationship of a Regulated Entity

Maintainability Criteria (All Must Be Met)

✓Must have first complained to RE → got rejection (wholly/partly) OR no reply within 30 days
✓Filed within 1 year of RE's reply OR 1 year + 30 days of complaint if no reply
✓Same cause of action not pending/settled before any Court, Tribunal, Arbitrator, or another Ombudsman (criminal proceedings are excluded from this bar)
✓Complaint to RE was made before the limitation period expired (Limitation Act 1963)
✓Complaint is not frivolous, abusive, or vexatious
✓Complete information provided as specified
✓Filed personally or through authorised representative (not advocate — unless advocate is the aggrieved party)

Section 7

MCQ Answers & Exam Strategy

Check Your Progress — Answers Explained

Q1 — (b) 22

As of November 2021, 22 Ombudsmen were appointed. Their offices are at RBI offices, mostly in state capitals.

Q2 — (b) Chief Customer Service Officer

The Internal Ombudsman of a bank is designated as the Chief Customer Service Officer (CCSO). Not to be confused with Chief Compliance Officer, Chief Risk Officer, or Head-Internal Audit.

Q3 — (d) Head Office

The Principal Nodal Officer must be not below the rank of Chief General Manager and is positioned at Head Office (not branch/regional/zonal level).

Q4 — (a) Dropping in complaint box

A complaint box doesn't generate any acknowledgement or reference number. To file with the Ombudsman you need to show the bank received and did not resolve your complaint — which requires a verifiable record. Email to specified ID, website submission, and branch submission with acknowledgement all qualify. Complaint box alone does not.

✅ Exam Strategy — Chapter 19

1.22 Ombudsmen as of November 2021 — this exact number is asked directly. (MCQ 1 answer = 22).
2.CRPC is at Chandigarh — ALL complaints go here first, even direct ones to Ombudsman.
3.30 days: no-reply threshold. 1 year from RE reply: filing deadline. 1 year + 30 days: if no reply from RE.
4.15 days: RE to file written response. 30 days: complainant to accept Award or it lapses.
5.Award ceilings: actual dispute = no ceiling; harassment/time/expenses = ₹1 lakh; consequential loss = ₹20 lakh.
6.IO threshold: scheduled banks with MORE THAN 10 banking outlets (excluding RRBs). CCSO = the IO.
7.CCSO must NOT have previously worked in the appointing bank.
8.Bank must escalate ALL unresolved complaints to IO before final reply — customer does NOT need to approach IO.
9.Complaint box is NOT adequate for Ombudsman filing — no verifiable acknowledgement.
10.PNO = not below Chief General Manager, at Head Office level.
11.3 merged schemes: Banking BO (1995) + NBFC BO (2018) + Digital Transactions BO (2019) → IOS 2021.
12.Non-maintainability 8 grounds: commercial decision, vendor/outsourcing dispute, management grievances, statutory compliance action, outside RBI purview, inter-RE disputes, employer-employee disputes are all outside Ombudsman scope.
13.Appellate Authority = Executive Director in-charge of the RBI Department administering the Scheme.
14.RE cannot appeal an Award issued for non-furnishing of documents/information by the RE itself.
15.Criminal proceedings pending/decided before Court = excluded from the bar on same-cause-of-action.

Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Model Policy on Grievance Redressal & Internal Machinery

RBI — Integrated Ombudsman Scheme 2021: Introduction

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