Financial Education and awareness material
Financial literacy refers to the knowledge and understanding of various financial concepts, tools, and practices that enable individuals to make informed and effective decisions regarding their personal finances.
Financial Education and awareness material
Financial literacy refers to the knowledge and understanding of various financial concepts, tools, and practices that enable individuals to make informed and effective decisions regarding their personal finances.
RBI Initiatives for Consumer Protection
Some recent initiatives of the Reserve Bank in consumer education and protection are:
Charter of Customer Rights - The RBI has formulated a "Charter of Customer Rights" for banks based on global best practices in consumer protection. The Charter enshrines broad, overarching principles for protection of bank customers and enunciates the following five basic rights of bank customers:
1. Right to Fair Treatment2. Right to Transparency, Fair and Honest Dealing
3. Right to Suitability
4. Right to Privacy
5. Right to Grievances Redress and Compensation
Banks are required to prepare their own Board approved policy, incorporating the five rights of the Charter, or suitably integrate their existing Customer Service Policy with the “Model Customer Rights Policy” formulated by IBA/BCSBI.
Internal Ombudsman Scheme for Banks- With effect from September 03, 2018, all Scheduled Commercial Banks (excluding Regional Rural Banks) with 10 or more banking outlets have been required to appoint Internal Ombudsman at the apex of their grievance redress mechanism for an independent review of customer complaints that are rejected partly / wholly by their internal grievance redress mechanism.
Internal Ombudsman Scheme for Non - Bank System Participants (NBSPs), 2019 – On the lines of the Internal Ombudsman Scheme for banks, an Internal Ombudsman Scheme was introduced for NBSPs on October 22, 2019 to strengthen their internal grievance redress mechanisms. The scheme is applicable to NBSPs (issuers of Pre-Paid Payment Instruments - PPIs) with more than one crore outstanding PPIs as on March 31 of the previous year. The NBSPs covered are mandated to appoint an independent authority at the apex of their grievance redress system to review the partly / wholly rejected complaints.
Internal Ombudsman Scheme for Non-Banking Financial Companies (NBFCs) was launched on November 15, 2021, for all Deposit-taking NBFCs (NBFCs-D) with 10 or more branches and Non-Deposit taking NBFCs (NBFCs-ND) with asset size of Rs.5,000 crore and above having public customer interface. Such NBFCs shall appoint an Internal Ombudsman (IO) at the apex of their internal grievance redress mechanism to review the partly/ wholly rejected complaints.
Complaint Management System (CMS) - RBI launched the CMS on June 24, 2019, a state-of-the-art web-based application integrating all stakeholders, i.e. customers, officials at Offices of the RBI Ombudsman, CEPCs, CEPD and Regulated Entities, on one platform for enabling end-to-end complaint processing through digital mode. CMS provides real time status of complaints and also hosts comprehensive material on e-learning based consumer education to enhance awareness on financial services and consumer rights.
Strengthening of grievance redress mechanism in banks - A comprehensive framework for strengthening of the internal grievance redress mechanism in banks was put in place in January 2021 comprising of the following aspects: (a) Enhanced disclosures on complaints (b) Recovery of cost of redress of maintainable complaints received against the banks in excess of their peer-group averages based on certain parameters, and (c) Intensive review of grievance redress mechanism of banks and (d) initiation of required supervisory and regulatory actions.
Other steps recently initiated for customer protection are:
RBI Initiatives for Consumer Protection
Some recent initiatives of the Reserve Bank in consumer education and protection are:
Charter of Customer Rights - The RBI has formulated a "Charter of Customer Rights" for banks based on global best practices in consumer protection. The Charter enshrines broad, overarching principles for protection of bank customers and enunciates the following five basic rights of bank customers:
1. Right to Fair Treatment2. Right to Transparency, Fair and Honest Dealing
3. Right to Suitability
4. Right to Privacy
5. Right to Grievances Redress and Compensation
Banks are required to prepare their own Board approved policy, incorporating the five rights of the Charter, or suitably integrate their existing Customer Service Policy with the “Model Customer Rights Policy” formulated by IBA/BCSBI.
Internal Ombudsman Scheme for Banks- With effect from September 03, 2018, all Scheduled Commercial Banks (excluding Regional Rural Banks) with 10 or more banking outlets have been required to appoint Internal Ombudsman at the apex of their grievance redress mechanism for an independent review of customer complaints that are rejected partly / wholly by their internal grievance redress mechanism.
Internal Ombudsman Scheme for Non - Bank System Participants (NBSPs), 2019 – On the lines of the Internal Ombudsman Scheme for banks, an Internal Ombudsman Scheme was introduced for NBSPs on October 22, 2019 to strengthen their internal grievance redress mechanisms. The scheme is applicable to NBSPs (issuers of Pre-Paid Payment Instruments - PPIs) with more than one crore outstanding PPIs as on March 31 of the previous year. The NBSPs covered are mandated to appoint an independent authority at the apex of their grievance redress system to review the partly / wholly rejected complaints.
Internal Ombudsman Scheme for Non-Banking Financial Companies (NBFCs) was launched on November 15, 2021, for all Deposit-taking NBFCs (NBFCs-D) with 10 or more branches and Non-Deposit taking NBFCs (NBFCs-ND) with asset size of Rs.5,000 crore and above having public customer interface. Such NBFCs shall appoint an Internal Ombudsman (IO) at the apex of their internal grievance redress mechanism to review the partly/ wholly rejected complaints.
Complaint Management System (CMS) - RBI launched the CMS on June 24, 2019, a state-of-the-art web-based application integrating all stakeholders, i.e. customers, officials at Offices of the RBI Ombudsman, CEPCs, CEPD and Regulated Entities, on one platform for enabling end-to-end complaint processing through digital mode. CMS provides real time status of complaints and also hosts comprehensive material on e-learning based consumer education to enhance awareness on financial services and consumer rights.
Strengthening of grievance redress mechanism in banks - A comprehensive framework for strengthening of the internal grievance redress mechanism in banks was put in place in January 2021 comprising of the following aspects: (a) Enhanced disclosures on complaints (b) Recovery of cost of redress of maintainable complaints received against the banks in excess of their peer-group averages based on certain parameters, and (c) Intensive review of grievance redress mechanism of banks and (d) initiation of required supervisory and regulatory actions.
Other steps recently initiated for customer protection are:
