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RBI Introduces Internal Ombudsman Mechanism For CICs

The Reserve Bank of India (RBI), on Thursday, introduced Internal Ombudsman mechanism for credit information companies (CICs). The central bank directed all CICs to appoint an internal ombudsman at the apex of their internal grievance redress mechanism by April 1, 2023. As per reports, the implementation of the mechanism will be monitored by the CIC’s internal audit system, apart from regulatory oversight by RBI.

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“The direction covers, inter-alia, the appointment or tenure, role and responsibilities, procedural guidelines, and oversight mechanism for the IO. Under the mechanism, all complaints that are partly or wholly rejected by the CICs will be reviewed by the IO before the final decision of the CIC is conveyed to the complaint,” said RBI, in an official statement.

The RBI also added that the internal ombudsman will not entertain any complaints directly from the members of public.

According to the RBI’s statement, the internal ombudsman shall be either a retired or a serving officer, not below the rank of deputy general manager or equivalent in any financial sector regulatory body, credit information companies, a non-banking financial company or bank, with necessary skills and experience of at least seven years in banking, non-banking finance, financial sector regulation or supervision, credit information, or consumer protection.

“DAKSH is a web-based end-to-end workflow application through which RBI shall monitor compliance requirements in a more focused manner with the objective of further improving the compliance culture in supervised entities like banks, NBFCs etc,” said RBI in a statement.

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