On November 12, 2021, PM Narendra Modi inaugurated two customer-centric Reserve Bank of India (RBI) schemes that will allow retail investors to engage in the government bond market and assist nation-building.
The RBI’s two schemes, retail direct and integrated ombudsman, will help encourage financial accessibility. These plans will broaden the investment opportunity and enhance the system for resolving customer complaints.
The retail direct scheme will let small investors receive guaranteed returns by investing in bonds while simultaneously assisting the government in raising cash for nation-building. In addition, the Reserve Bank-Integrated Ombudsman Scheme intends to change the grievance resolution procedure for resolving customers’ concerns against firms controlled by the central bank.
PM Modi stated that “One Nation-One Ombudsman” has become a reality with the scheme’s introduction.
The RBI Retail Direct Scheme (RDS) aims to improve retail investors’ access to the government bond market. It provides retail investors with a new way of investing directly in securities issued by the federal and state governments.
Investors are allowed to create and manage their govt bonds portfolios with the RBI online for free. The scheme uses technological advancements to invest in central government bonds, treasury bills, state development loans, and national gold bonds.
The initiative ranks India among the few countries that provide such a service. This scheme (RB-IOS) will terminate jurisdictional restrictions as well as restricted reasons for complaints. Customers will submit the documents, follow the progress of complaints submitted, and offer comments through a central point of contact at the RBI.
Complaints that are not included by the ombudsman scheme will be handled by the Customer Education and Protection Cells (CEPCs) in the RBI’s 30 local branches. With more excellent knowledge, digital penetration, and financial inclusion, the complaints filed against different regulated organizations have skyrocketed. According to RBI data, complaints rose from 1.64 lakh in 2017-18 to 3.30 lakh in 2019-20.
Recently, the RBI has taken several steps to enhance the customer grievance handling structure of regulated entities, including publication of guidelines for boosting Internal Ombudsmen, implementing graded supervisory and regulatory actions, and releasing the Complaints Management System (CMS) in 2019.
Following a review, the RBI decided to combine the three ombudsman schemes into one and simplify the scheme by encompassing all complaints regarding inadequacy in services by consolidating the reception and initial handling of complaints to improve efficiency levels.
The RBI’s alternative grievance handling mechanism presently consists of three ombudsman schemes: the Banking Ombudsman Scheme (BOS), which was started in 1995, the Ombudsman Scheme for Non-Banking Financial Companies (OS-NBFC), which was initiated in 2018, and the Ombudsman Scheme for Digital Transactions (OSDT), which was started in 2019.
The RBI Ombudsman’s 22 branches (ORBIOs) control the schemes. The complaint that does not come under the umbrella of the Ombudsman system is addressed by the Consumer Education and Protection Cells (CEPCs) located in each of the RBI’s 30 local branches.
The three ombudsman schemes had specific bases for complaints that operated as a limiting factor, distinct reasons for complaints that resulted in uneven redress among consumers of different organizations, and varied compensation mechanisms.
