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Internal Ombudsman Mechanism for Select NBFCs- Introduced by RBI

Published on November 17, 2021
Current Context: The Reserve Bank of India (RBI) has introduced an internal Ombudsman mechanism for select Non-Banking Financial Companies (NBFCs).
Internal Ombudsman Mechanism for Select NBFCs- Introduced by RBI
  • As per this mechanism, the deposit-taking NBFCs with 10 or more branches and non-deposit-taking NBFCs having an assets size of Rs5,000 crore and above should have an Internal Ombudsman (IO).
  • For this, the central bank has given 6 months duration to such NBFCs to appoint IO.
  • The appointment and implementation of the IO mechanism will be monitored by the internal audit system of NBFC and the regulatory unit of RBI as well.
  • The IO will review the partly or wholly rejected complaints by NBFCs. This review activity will be done before the final decision of the NBFC is conveyed to the complainant.
  • The IO will not entertain any complainants directly from members of public.
  • The appointment criteria for IO are: The person should be a serving or retired officer in the finance sector of any regulatory body or NBFC or bank. The person should have a working experience of a minimum of 7 years. The person should have served the rank of atleast Deputy General Manager.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das

Question: 

Q.1 As per RBI, deposit-taking NBFCs with 10 or more branches and non-deposit-taking NBFCs having an assets size of ____ and above should have an Internal Ombudsman (IO)?
a. Rs 1,000 crore
b. Rs 5,000 crore
c. Rs 7,000 crore
d. Rs 3,000 crore
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