Are you a customer of a Non-Banking Financial Company (NBFC)? Here’s good news for you. From now on you won’t have to wait for long for redressal of any of your complaints against any deposit-taking NBFC. In a bid to provide a cost-free and expeditious complaint redressal mechanism related to deficiency in services by NBFCs, the Reserve Bank of India (RBI) has launched the Ombudsman Scheme for NBFCs for redressal of complaints against non-banking financial companies registered with the RBI under Sec 45-IA of the RBI Act, 1934. The scheme is being introduced with effect from Feb 23, 2018.
“To promote conducive credit culture among the Non-Banking Financial Companies and to regulate the credit system of the country to its advantage, it is necessary to provide for a system of Ombudsman for redressal of complaints against deficiency in services concerning deposits, loans and advances and other specified matters,” the RBI said in a notification on Friday.
Who is the NBFC Ombudsman?
The NBFC Ombudsman is a senior official appointed by the RBI to redress customer complaints against NBFCs for deficiency in certain services covered under the grounds of complaint specified under Clause 8 of the Scheme. At present 4 NBFC Ombudsman have been appointed with their offices located in Chennai, Kolkata, New Delhi and Mumbai.
Which NBFCs are covered?
NBFCs which are authorised to accept deposits or have customer interface, with assets size of Rs 1 billion or above, are covered under the scheme. The scheme initially covers authorized deposit-accepting NBFCs and would be gradually extended to cover other identified NBFCs. However, Non-Banking Financial Company – Infrastructure Finance Company (NBFC-IFC), Core Investment Company (CIC), Infrastructure Debt Fund – Non-banking Financial Company (IDF-NBFC) and NBFCs under liquidation are excluded from the ambit of the scheme.
Grounds of complaints
As per Clause 8 of the Scheme, the NBFC Ombudsman can receive and consider complaints on various grounds, some of which are:
# Non-payment or inordinate delay in the payment of interest on deposits;
# Non-adherence to the RBI directives, if any, applicable to rate of interest on deposits;
# Non-repayment or inordinate delay in the repayment of deposits;
# Non-presentation or inordinate delay in the presentation of post-dated cheques provided by the customer;
# Failure or inordinate delay in releasing the securities/ documents to the borrower on repayment of all dues;
# Levying of charges without adequate prior notice to the borrower/ customer;
# Failure to provide legally enforceable built-in repossession clause in the contract/ loan agreement;
# Non-observance of directions issued by the RBI to NBFCs, among others.
When can a complaint be filed?
If someone has a complaint, he/she must first approach the concerned NBFC for redressal of grievance. If the NBFC does not reply within a period of one month after receipt of the complaint, or rejects the complaint, or if the complainant is not satisfied with the reply given by the NBFC, the complainant can file the complaint with the NBFC Ombudsman. The NBFC Ombudsman does not charge any fee for filing and resolving customers’ complaints.
What if the complaint is not settled by agreement?
The NBFC Ombudsman will proceed to pass an Award if the complaint is not settled by an agreement within a specified period as allowed by the NBFC Ombudsman. Before passing an Award, the NBFC Ombudsman will provide reasonable opportunity to the complainant and the NBFC to present their case. It is up to the complainant to accept the Award in the full and final settlement or reject it.
Any person aggrieved by an Award can approach the Appellate Authority. The complainant also has the option to explore other recourse and/or remedies available as per the law.