Summary of this article
RBI issues Internal Ombudsman Directions for regulated entities
Every entity must appoint an internal ombudsman
Ombudsman reviews partially resolved or rejected complaints
On January 14, 2026, the Reserve Bank of India (RBI) introduced the Reserve Bank of India (Internal Ombudsman) Directions, 2026, setting up fresh guidelines to appoint and run the internal ombudsmen for all entities being supervised by the central bank.
The directions apply to a wide range of regulated entities by RBI, including commercial banks, small finance banks (SFBs), payment banks (PBs), non-banking financial companies (NBFCs), non-bank prepaid payment instrument (PPI) issuers, and credit information companies (CICs).
The objective, explains RBI, is to enhance the grievance redressal mechanism in these regulated entities internally so that grievances are disposed of quickly and more satisfactorily. An apex-level review within the regulated entity has been provided for complaints that have already been examined but are partially resolved or proposed to be rejected.
Background and Consultation Process
RBI stated that the draft of the Internal Ombudsman Directions was issued on October 7, 2025, and suggestions were invited from all stakeholders and the public at large. After considering the feedback on the draft, the directions have been finalised after incorporating changes, if any.
All these directions are accompanied by an annexure, indicating the feedback received and action taken on it.
Who can be Appointed as Internal Ombudsman
Under this new framework, every regulated entity must appoint at least one internal ombudsman. The internal ombudsman can be a serving or retired officer with a rank equivalent to a general manager in the regulated entity.
The candidates should have at least seven years of experience in areas such as banking, NBFCs, regulation and supervision, payment and settlement systems, credit information, consumer protection, or related fields.
Role and Scope of Internal Ombudsman
RBI has explained that the internal ombudsman will not directly respond to customer complaints. The purpose of this body is to examine complaints that have already been reviewed by the regulated entity.
These include complaints that have been partially resolved or those proposed to be fully rejected by the entity. The main idea is to provide an additional check before the complaint is closed altogether.
RBI Supervisory Oversight
Customer service and grievance redress processes, including implementation of the Internal Ombudsman Directions, will form part of the supervisory review, conducted by its Department of Supervision.
RBI has indicated that these rules will improve in-house handling of complaints, increase accountability within regulated entities, and help to achieve quicker resolution of consumer complaints.
