The Reserve Bank introduces Internal Ombudsman mechanism for select Non-Banking Financial Companies (NBFCs)

The Reserve Bank of India has announced to introduce the Internal Ombudsman mechanism for following two types of Non-Banking Financial Companies (NBFCs):

1. Deposit-taking NBFCs (NBFCs-D) with 10 or more branches and
2. Non-deposit taking NBFCs with assets size of ₹5,000 crore must appoint an Internal Ombudsman (IO).

Consequently, these two categories of NBFCs will have to appoint Internal Ombudsman (IO). The internal Ombudsman will be responsible for handling the public grievance at the entity level before the grievance is escalated to Ombudsman at RBI. RBI has given a timeline of six months to the NBFCs for the appointment of the Internal Ombudsman.