Context: Today we will be talking about One Nation, One Ombudsman. The Reserve Bank announced on Friday that it will be integrating consumer grievances redressal under a single ombudsman as against three schemes working at present. Currently, there are dedicated ombudsman schemes devoted to consumer grievance redressal in banking, non-bank finance companies and digital transactions. The move is intended to make the process of redress of grievances easier by enabling the customers to register their complaints under the integrated scheme, with one centralised reference point. According to the central bank, the integrated ombudsman scheme will be rolled out in June 2021. On Discussion Today, we will try to understand from experts the benefits of this centralised processing of grievances and how effective is this an initiative towards consumer protection.

About Ombudsman 

• It is a quasi judicial authority created by government or private bodies to listen to the grievances of the customers against the service providers for speedy redress of the complaint.
• The verdict of the ombudsman is binding on the service provider but is not binding on the compliant and he is free to either accept the verdict or reject it.
• There are various examples of ombudsman from india such as banking, insurance, taxation ombudsman who provide necessary relief to the aggrieved person in a time and cost effective manner.

Difference between law enforcement agency and ombudsman

1. Ombudsman is a quasi judicial body whereas LEA are statutory body without any judicial capacity.
2. Ombudsman can here complaints and can deliver verdicts whereas LWE can only register complaint and can investigate the matter.
3. Ombudsman is an executive body appointed by rules and regulation of concerned sector whereas LWE is a statutory body deriving authority directly from constitution or some acts of parliament.

Key Facts

• Currently, there are dedicated ombudsman schemes for the consumer grievance redressal in the banking, non-bank finance companies and digital transactions.
• Now, the bank has decided to integrate the three Ombudsman schemes.
• The central bank has also operationalized the complaint management system (CMS) portal as a one stop solution. This portal will be used for the alternate dispute resolution of the customer complaints which are not resolved by regulated entities.

One Nation One Ombudsman approach

• RBI will adopt the ‘One Nation One Ombudsman’ approach to make the alternate dispute redress mechanism simple and more responsive to the users.
• The mechanism will cater to all the customers from banks, NBFCs and the non-bank issuers of prepaid payment instruments.
• The e-Integrated Ombudsman Scheme will be rolled out in June 2021.

Objectives of the move

• The central bank has decided to adopt the approach of “One Nation, One Ombudsman” with the objective of making process of redress of grievances easy. The approach will make the grievance process easy by enable the customers to register the complaints under the integrated scheme with a centralised reference point.

Banking Ombudsman

• It is a quasi-judicial authority that was created in the year 2006 under the Banking Ombudsman Scheme 2006. The authority was created to enable the resolution of complaints of bank customers.

Banking Ombudsman Scheme, 2006

• The Banking Ombudsman Scheme is an inexpensive forum for the redressal of grievances of bank customers. Banking Ombudsman Scheme was first introduced in the year 1995. The scheme was revised in the year 2002. Currently, the Banking Ombudsman Scheme 2006 is operating.

Road Ahead

• With the increasing delay in getting justice by the official judicial system and heavy backlog of cases ombudsman is a simple and cost effective mechanism to obtain relief by the customers which creates faith among consumers that they would not be cheated by the service provider and improves the accountability of the service provider.