Integrated Ombudsman Scheme
The RBI framework under which a Banking Ombudsman hears bank and NBFC card complaints, reached only after the bank's own 3-tier redressal has failed within 1 month.
In plain language
A bank customer with an unresolved complaint does not go straight to a regulator. There is a set path to follow first, inside the bank itself, before an outside authority gets involved.
That outside authority is the Banking Ombudsman, appointed by the RBI across various locations in the country, operating under what the workbook calls the Integrated Ombudsman Scheme. It hears complaints about the receipt and payment of funds, interest or fee disputes, and issues with ATM, debit and credit cards, among others, for banks and for NBFCs' credit card business as well.
The Ombudsman only comes into the picture once the bank's own internal process has had its chance and failed.
How it works
The bank's own internal process is a 3-tier system: Branch Manager, then Zonal Manager, then GM-Customer Service. Only once a complainant is not satisfied with how this internal process handles the grievance can they approach the Integrated Ombudsman for settlement, through mediation, or an award.
Separately, if a grievance has gone directly to the bank and there has been no satisfactory resolution within 1 month, the customer can go to the Banking Ombudsman even without having formally exhausted every internal tier. The complaint can be filed online, by email, or physically, and if valid, the Ombudsman first attempts settlement with the bank; failing settlement within a further month, the Ombudsman passes an award after hearing both sides.
A worked example
A customer disputes a wrongly charged Rs 1,500 penalty fee on her savings account. She first raises it with her Branch Manager. Unresolved after some weeks, she escalates to the Zonal Manager, and then to GM-Customer Service — the bank's own 3-tier system, run through in order.
A full 1 month passes with no satisfactory resolution at any tier. She now approaches the Banking Ombudsman under the Integrated Ombudsman Scheme, filing online. The Ombudsman first tries to settle the dispute directly with the bank; if that fails within another month, the Ombudsman passes a formal award after hearing both sides.
Why NISM asks about it
Chapter 20 (Grievance Redress Mechanism), section 20.6.2 (Integrated Ombudsman Scheme) and section 20.6.3 (Process regarding escalation of grievance), set out the three-tier internal system and the one-month trigger for approaching the Banking Ombudsman. Expect a question naming the three internal tiers in order, or the one-month timeline for escalation.
Common exam traps
- The three-tier internal system runs Branch Manager, then Zonal Manager, then GM-Customer Service — in that order; do not scramble the sequence.
- The one-month figure applies twice — once as the trigger to approach the Ombudsman after no resolution from the bank, and again as the window for the Ombudsman's own settlement attempt before an award is passed.
- The Banking Ombudsman covers both bank services and NBFC credit card complaints — do not assume it is limited to banks alone.
- If the Integrated Ombudsman route still does not resolve things, escalation continues through CPGRAMS, a separate, government-wide portal, not the same mechanism.
Where this is taught
Free preparation for NISM Series X-ARelated terms
- Banking OmbudsmanA person appointed by the RBI to resolve complaints from banking customers about services offered by banks, including credit cards issued by banks and NBFCs.
- CPGRAMSThe Centralized Public Grievance Redress and Monitoring System — the central government's online portal that routes a citizen's complaint to the department responsible and tracks it to resolution.
- Escalation mechanismThe route a complainant can take to have a grievance looked at again by someone independent, once the first response from the entity they complained to has not resolved it satisfactorily.
- NPS Trust escalationThe second tier of NPS grievance redress: if an intermediary has not resolved a subscriber complaint within 30 days, or resolved it unsatisfactorily, the subscriber registers it with the NPS Trust.