RBI Deputy Governor Calls For Stronger Internal Ombudsman Mechanism In Banks

Mumbai, Jul 21 (KNN) Reserve Bank of India (RBI) Deputy Governor Swaminathan J has called on regulated entities to strengthen their Internal Ombudsman mechanisms to ensure customer grievances are resolved fairly, independently and within institutions.

Addressing the Internal Ombudsman Conference organised by the RBI in Mumbai, he said a significant number of complaints later decided in favour of customers by the RBI Ombudsman had not been referred to Internal Ombudsmen by regulated entities.

Customer Service A Shared Responsibility

Swaminathan said customer service is a shared responsibility involving boards, senior management and operational teams, with every interaction shaping customer confidence in financial institutions.

He noted that the growing scale, digitisation and interconnectedness of the financial ecosystem have made robust grievance redressal mechanisms increasingly important.

Fair Resolution More Important Than Complaint Closure

The Deputy Governor said Internal Ombudsmen must exercise independent judgement, fairness and empathy while resolving complaints, rather than treating grievance redressal as a procedural exercise.

He emphasised that institutions should distinguish between formally closing a complaint and actually resolving a customer's concern.

According to him, grievance redressal should focus on delivering fair and timely outcomes instead of merely defending institutional decisions, with performance assessed by the quality of resolutions rather than the number of complaints disposed of.

Independent Ombudsmen Key To Customer Confidence

Swaminathan urged Internal Ombudsmen to represent the customer's perspective in institutional decision-making and maintain independence in their functioning.

He said the success of the Internal Ombudsman framework would ultimately be measured by customers' confidence that their grievances would receive an impartial hearing and fair resolution within the regulated entity itself.

(KNN Bureau)