RBI/CEPD/2025-26/383
CEPD.PRD.No.S1028/13.01.019/2025-26
January 14, 2026
Reserve Bank of India (Payments Banks - Internal Ombudsman) Directions, 2026
In exercise of the powers conferred by Section 35A of Banking Regulation Act, 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.
These Directions are issued with a view to strengthen the Internal Grievance Redress mechanism within a bank and ensure a speedy and meaningful resolution of customer complaints by enabling a review before their rejection, by an apex level authority within the bank.
Chapter I
Preliminary
- Short Title and Commencement
- (1) These Directions shall be called the Reserve Bank of India (Payments Banks - Internal Ombudsman) Directions, 2026.
- (2) These Directions shall come into force with immediate effect except clause 7(2), 14(2) and 14(4) which shall be complied with, latest by June 30, 2026.
- Suspension
- (1) The Reserve Bank, if it is satisfied that it is expedient so to do, may, by an order, suspend for such period as may be specified in the order, the operation of any or all of the provisions of these Directions, either generally or in relation to any specified regulated entity.
- (2) The Reserve Bank may by an order, extend from time to time, the period of any suspension ordered as aforesaid by such period, as it may deem fit.
- Applicability
- (1) These Directions shall be applicable to Payments Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank') having 10 or more banking outlets in India as on March 31, 2025.
- (2) The directions shall also be applicable to the Payments Banks, which meets the above mentioned criteria after March 31, 2025, with effect from six months from meeting the eligibility criteria.
- Definitions
- (1) In these Directions, unless the context states otherwise, the terms herein shall bear the meanings assigned to them as below:
- (a) “Banking Outlet” is a fixed-point service delivery unit as defined under the Reserve Bank of India (Payments Banks - Branch Authorisation) Directions, 2025 issued by Reserve Bank of India, and as amended from time to time;
- (b) “Competent Authority” means Whole Time Director / Executive Director-in-charge of customer service vertical of the bank;
- (c) “Complaint” means a representation in writing or through other modes alleging deficiency in service on the part of the bank with or without seeking relief thereon;
- (d) “Credit Information Company (CIC)” means a company as defined in the Companies Act, 2013 and has been granted a certificate of registration under sub-section (2) of section 5 of the Credit Information Companies (Regulation) Act, 2005;
- (e) “Customer” means a person who uses, or is an applicant for, a service provided by the bank;
- (f) “Deficiency in service” means a shortcoming or an inadequacy in any service, which the bank is required to provide statutorily or otherwise, which may or may not result in financial loss or damage to the customer;
- (g) “Deputy Internal Ombudsman (Dy. IO)” means any person appointed under clause 6 of these Directions;
- (h) “Financial Sector Regulatory Body” means regulatory body for financial sector entities and includes:
- The Reserve Bank of India established under the Reserve Bank of India Act, 1934;
- The Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992;
- The Insurance Regulatory and Development Authority of India established under the Insurance Regulatory and Development Authority of India Act, 1999;
- The Pension Fund Regulatory and Development Authority established under the Pension Fund Regulatory and Development Authority Act, 2013;
- (i) “Internal Ombudsman (IO)” means any person appointed under clause 5 of these Directions;
- (j) “Regulated Entity (RE)” means a commercial bank or payments bank or small finance bank or a non-banking financial company or a non-bank prepaid payment instrument issuer or a credit information company which are covered under the purview of the Internal Ombudsman framework, or any other entity as may be specified by the Reserve Bank from time to time.
- (2) All other expressions, unless defined herein, shall have the same meaning as assigned to them under the Banking Regulation Act, 1949, the Reserve Bank of India Act, 1934, the Payment and Settlement Systems Act, 2007, the Credit Information Companies (Regulation) Act, 2005, the Credit Information Companies Rules, 2006, the Credit Information Companies Regulations, 2006, or the Reserve Bank - Integrated Ombudsman Scheme (as amended from time to time) or regulations, directions and guidelines issued by the Reserve Bank of India.
Chapter II
Office of the Internal Ombudsman
- Appointment of Internal Ombudsman
- (1) The IO shall either be a retired or serving officer, in the rank equivalent to a General Manager in the RE under the purview of the Internal Ombudsman framework or a Financial Sector Regulatory Body, having necessary skills and experience of minimum seven years of working in areas such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information or consumer protection.
Provided that, if the person is a serving officer, he / she is required to relinquish the same before assuming charge as IO.
- (2) The IO shall not have been previously employed, nor presently be employed, by the bank or a holding, associate or subsidiary company of the bank.
- (3) The IO shall not be over 70 years of age before the completion of the tenure.
- (4) A person may work as the IO in more than one RE simultaneously at the discretion of the REs concerned, subject to the approval of the Board or Customer Service Committee / Consumer Protection Committee of the Board of the appointing RE.
- Appointment of Deputy Internal Ombudsman
- (1) The Dy. IO shall either be a retired or serving officer, in the rank equivalent to a Deputy General Manager in the RE under the purview of the Internal Ombudsman framework or a Financial Sector Regulatory Body, having necessary skills and experience of minimum five years of working in areas such as banking, non-banking finance, regulation, supervision, payment and settlement systems, credit information or consumer protection.
Provided that, if the person is a serving officer, he / she is required to relinquish the same before assuming charge as Dy. IO.
- (2) The Dy. IO shall not have been previously employed, nor presently be employed, by the bank or a holding, associate or subsidiary company of the bank.
- (3) The Dy. IO shall not be over 70 years of age before the completion of the tenure.
- (4) The Dy. IO shall not be employed in more than one RE simultaneously.
- Number of Internal Ombudsman / Deputy Internal Ombudsman
- (1) Every bank shall appoint at least one IO.
- (2) The Customer Service Committee of the Board of the bank shall determine, at least once in a year, the number of IO/ Dy. IO to be appointed having due regard to volume and complexity of the complaints received, and ensuring that the IO/ Dy. IO get sufficient time to apply his/her mind on the principles of fairness, equity and natural justice while reviewing the resolution provided by the bank.
- (3) While appointing additional IO / Dy. IO, the bank shall consider the need for diversity of experience of the incumbents to deal with different types of cases. In such cases, the bank may clearly define the jurisdiction of each IO / Dy. IO.
- Tenure of Internal Ombudsman / Deputy Internal Ombudsman
- (1) The appointment of the IO / Dy. IO in the bank shall be contractual.
- (2) The bank shall ensure that the post of the IO does not remain vacant at any point of time. During the temporary absence of the IO, the Dy. IO may function as the IO.
- (3) In a rare case where both IO/s and Dy IO/s are on leave / absent, the bank may designate its serving official equivalent to the General Manager rank as the IO for a period not exceeding one month, with the approval of the Customer Service Committee of the Board. Such official shall not have any reporting relationship with the business verticals of the bank during the period in which he/she is designated as the IO.
- (4) The tenure of the IO / Dy. IO in the bank shall be a fixed term of not less than three years. However, the total tenure (including extension/reappointment, if any) of the IO / Dy. IO in the bank shall not exceed five years.
- (5) To fill a vacancy, the bank shall undertake the process of fresh appointment at least three months in advance of the expiry of the tenure of the incumbent IO and ensure that there is a reasonable overlap between the time of demitting of office of the outgoing IO and the incoming IO.
- (6) The IO / Dy. IO shall not be removed before the completion of his/her contracted term without the approval of the Customer Service Committee of the Board. In case a vacancy arises on account of reasons beyond the control of the bank (such as resignation, incapacitation, illness, death, etc.), the bank shall inform Reserve Bank of India within 10 working days from the date of such vacancy and shall appoint a new IO / Dy. IO as per eligibility criteria specified under clause 5 and clause 6 of these Directions within three months from the date of vacancy.
- (7) The Customer Service Committee of the Board of the bank shall determine the structure of emoluments, facilities and benefits accorded to the IO / Dy. IO, which should be appropriate keeping in view the stature and position of the IO / Dy. IO being at the apex of the grievance redress mechanism of the bank as also the need to attract experienced persons with requisite expertise. These emoluments, facilities and benefits accorded to the IO / Dy. IO, once determined, shall not be changed adversely during the tenure of the IO / Dy. IO.
- Administrative Oversight
- (1) The IO shall report to the Competent Authority, as defined under clause 4(1)(b) of the Directions, of the bank administratively, and to the Customer Service Committee of the Board of the bank functionally.
- Secretariat of the office of Internal Ombudsman
- (1) The bank shall provide such number of its officers and staff to the office of the IO as is considered necessary for the smooth functioning of the office of the IO.
- (2) All other requisite office infrastructure, including information technology support shall be made available to the office of the IO to enable the IO/ Dy. IO to discharge the responsibilities effectively and efficiently.
- (3) The office of the IO may preferably be placed in the Head Office or Corporate Office of the bank.
- Internal Audit
- (1) The Internal Audit Department of the bank shall conduct an audit of the implementation of these Directions on an annual basis, covering, inter-alia:
- (a) The process of appointment / reappointment of the IO/Dy. IO, adequacy of the human resources and infrastructure provided to the office of the IO in relation to the volume of complaints;
- (b) Implementation of auto-escalation of the partially resolved or wholly rejected complaints to the office of the IO within the timelines;
- (c) Action taken by the office of the IO with regard to analysis of complaints, reports submitted to the Reserve Bank of India and the bank, raising awareness of the staff of the bank about the grievance redressal processes, and such other processes;
- (d) Submission of the information related to appointment of the IO / Dy. IO and submission of periodic report on the functioning of the IO by the bank to the Reserve Bank.
- (2) The scope of the internal audit shall exclude any assessment of the correctness of decisions taken by the IO / Dy. IO.
