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RBI Internal Ombudsman Norms for Banks and NBFCs

15 January 20261 min read
BANKING & FINANCERBI InternalOmbudsmanNorms for Banksand NBFCs15 January 2026safalsetu.com

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

AreaRequirement
AppointmentMandatory for banks and specified NBFCs
IndependenceNo recent executive role there; fixed tenure
ScopeAll complaints rejected fully or partly; reasoned, documented decision
Binding natureCannot be overridden; only if the IO upholds a rejection can the matter reach the IOS
ReportingDirectly to the MD/CEO or a Board-level committee

Objectives

  • Consumer protection, fairness and transparency, fewer escalations to the RBI, and institutional accountability.

Test yourself

1. A complaint can move to the RBI's Integrated Ombudsman Scheme only after which step?

Only if the Internal Ombudsman upholds a rejection can the complaint go to the IOS.

2. To whom must the Internal Ombudsman report directly under the new RBI norms?

Direct reporting is to the MD/CEO or a Board-level committee.

3. Can a bank or NBFC override a decision of its Internal Ombudsman?

Banks and NBFCs cannot override the IO's decision.