The Reserve Bank of India (RBI) has retained higher compensation limits under Reserve Bank – Integrated Ombudsman Scheme, 2026, rejecting industry requests to either roll back or recalibrate the proposed ceilings despite concerns over operational and financial impact, it said in a release on Friday.
The draft norms were released in October. The revised scheme will come into force from July 1 and is expected to strengthen the ombudsman framework and bring about further efficiency in resolution of complaints.
According to the guidelines, the Ombudsman would have the power to award compensation of up to Rs 30 lakh for consequential losses and up to Rs 3 lakh for loss of time, expenses, harassment or mental anguish suffered by complainants.
Stakeholders, including banks and prepaid payment instrument (PPI) issuers, had sought continuation of the earlier Rs 1 lakh cap for non-financial losses, lower limits for low-value digital transactions, or an increase in the overall ceiling to Rs 50 lakh indexed to inflation.
Balancing Stakeholder Interests
“The proposed ceilings—Rs 30 lakh (consequential loss) and Rs 3 lakh (time/expenses/harassment)—strike a prudent balance, between providing meaningful relief for consumers and deterrence on the one hand, and interest of the REs (regulated entities) on the other hand,” RBI said.
It reiterated that compensation under the scheme is principle-based and entity-neutral, with the actual award determined on the facts and merits of each case.
Concerns raised by PPI issuers that higher caps could pose challenges in managing high volumes of low-ticket transactions—averaging around Rs 400 per transaction—were also rejected. The RBI clarified that compensation is not transaction-linked but depends on the gravity of the lapse and actual loss suffered by the customer.
Revised Resolution Timelines
On complaint maintainability, the RBI amended provisions to align escalation timelines for categories such as unauthorised electronic banking transactions and chargeback disputes with prescribed sector-specific resolution timelines, rather than a uniform 30-day period.
It also restored the earlier 15-day turnaround time for regulated entities to submit their responses to the Ombudsman, citing operational requirements.
The central bank rejected suggestions to treat complaints as non-maintainable merely because an FIR has been lodged, clarifying that an FIR only initiates investigation and does not constitute an adjudicatory order.
Proposals from stakeholders to introduce a nominal filing fee to deter frivolous complaints were also turned down, with the RBI maintaining that the Ombudsman framework must remain cost-free to ensure accessibility.
The central bank has restored the right of appeal for regulated entities against Ombudsman awards, a provision that had been withdrawn in the draft.