RBI Internal Ombudsman Norms for Banks and NBFCs
Why in the news
In January 2026 the RBI issued fresh guidelines on appointing and running Internal Ombudsmen, with separate directions for banks and NBFCs, to improve customer grievance handling.
About the Internal Ombudsman
- An independent senior functionary who reviews complaints the entity rejected.
- The last internal checkpoint before RBI’s Integrated Ombudsman Scheme (IOS).
Main provisions
| Area | Requirement |
|---|---|
| Appointment | Mandatory for banks and specified NBFCs |
| Independence | No recent executive role there; fixed tenure |
| Scope | All complaints rejected fully or partly; reasoned, documented decision |
| Binding nature | Cannot be overridden; only if the IO upholds a rejection can the matter reach the IOS |
| Reporting | Directly to the MD/CEO or a Board-level committee |
Objectives
- Consumer protection, fairness and transparency, fewer escalations to the RBI, and institutional accountability.