The RBI instructs digital payment companies to appoint an Ombudsman to resolve consumer complaints
To improve the customer redressal system for large wallet companies, the Reserve Bank of India (RBI) has decided to mandate the creation of an internal ombudsman scheme by them. The move is taken to strengthen the grievance redressal mechanism at the entity level, as per RBI’s Statement on Developmental and Regulatory Policies.
The directive will cover the large non-bank PPI issuers, who have more than Rs 1 crore pre-paid payment instruments outstanding. Many digital wallets such as PhonePe, Amazon Pay and Mobikwik are said to fall under this ambit. Whereas Paytm run payment bank will come under banking ombudsman. The internal ombudsman is intended to facilitate a swift and cost-effective complaint redressal mechanism within the entity and provide an additional tier for grievance redressal, said the regulator.
RBI is expected to issue detailed instruction on the same on Oct 15.
A customer can raise complaints in case of failure in crediting merchant’s account within a reasonable time, failure to refund and load funds and unauthorized electronic fund transfer including non-adherence to any other instruction of RBI. Though, customers first need to take their complaint to the provider in question. Early this year, the central bank, after a surge in digital payments complaints, announced that it is necessary to provide a mechanism of Ombudsman for redressal of complaints against deficiency in services related to online transaction.
In December last year, the RBI said that there is an emerging need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence in this channel. The scheme came into effect on January 31.
The RBI’s scheme promises to provide free of cost redressal mechanism to issues and problems raised by customers for digital transactions undertaken by them through non-banking channels, like mobile wallets or tech-enabled payment companies using UPI for settlements. In case the ombudsman first failed in settling the dispute through mutual agreement within a month, the ombudsman can pass an award.
As per the RBI release, service providers have to clearly display the fees and charges for digital transactions on their websites. The service providers also need to inform consumers about the ombudsman scheme through their offices as well as websites and apps.
The deputy governor of RBI is an appellate authority under this scheme.