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Indian banks asked to appoint internal ombudsmen for customer complaints

India's central bank tightened its internal ombudsmen guidelines and asked all scheduled commercial banks with more than 10 branches to appoint internal ombudsmen as part of efforts to strengthen their internal complaint redressal systems.

Regional rural banks have, however, been excluded from the directive.

The central bank said Sept. 3 that internal ombudsmen will review customer complaints which were partially or wholly rejected by the bank. Since the banks shall internally escalate all complaints, which are not fully redressed to their respective internal ombudsmen before conveying the final decision to the complainant, "the customers need not approach the IO directly," the central bank noted.

To further enhance the independence of internal ombudsmen and to strengthen the monitoring system for them, the central bank said it has reviewed the arrangement and issued revised directions in the form of "Internal Ombudsman Scheme, 2018."

The central bank, in May 2015, advised all public sector and select private and foreign banks to appoint internal ombudsmen to ensure customer complaints are redressed at the level of the bank itself.