Ombudsman Schemes for Digital Transactions
Sometimes, we need a trustworthy person who can resolve our fight with our best friend fair-mindedly. Likewise, government/private companies partnered with a body to resolve disputes between the organisation and the customers.
Ombudsman is an official selected by government/private bodies to solve and address customer complaints. Many companies, academies, and non-profit teams have their Ombudsman.
The Reserve Bank of India (RBI) has an Ombudsman. It introduced its Ombudsman under the scheme named Ombudsman Schemes for Digital Transactions in 2019. Read this blog to know ‘What is this scheme?’ and ‘How it works?’.
Ombudsman Schemes for Digital Transactions
It is a dynamic and free-of-cost apex-level mechanism. It solves the complaints related to digital transactions as mentioned in the Scheme. The Payment and Settlement System Act of 2007’s Section 18 was implemented on January 31st, 2019.
Who is the Ombudsman for Digital Transactions?
A senior official is appointed by the RBI as the Ombudsman for digital transactions.
The official revises the complaints of customers against System Participants. As outlined in the Payment and Settlement Systems Act, 2007, any authorised official, other than a company/bank/government body who participates in a payment system is a ‘System Participant.’
Grounds for Complaints
You can file a cost-free complaint with the Ombudsman. There are some fixed grounds on which you can file a complaint.
1. Pre-paid Payment Instruments
System Participants’ failure to implement RBI instructions on prepaid payment instruments with regard to any of the following:
- Failure to deposit money into wallets or cards within the allotted period.
- Failure to credit a merchant’s account in a given time.
- Illegal electronic fund transfer.
- Failure to transfer the balance of the prepaid payment instrument to the holder’s ‘Own’ bank account.
- Failure to refund within acceptable time/ returned/ refusal to refund in case of unsuccessful/ rejected/ cancelled/ transactions.
- Delay in crediting the prepaid instrument holder’s account.
- Failure to follow any other Reserve Bank guidelines regarding prepaid payment instruments.
2. Mobile/ Electronic Fund Transfers
System Participants’ failure to meet the RBI’s guidelines for mobile or electronic fund transfers with respect to any of the following:
- Failure of fund transfer or online payment within the selected time.
- Illegal fund transfer.
- Failure to carry out stop-payment instructions in accordance with the timeline.
- In case of unsuccessful transactions, failing to reverse the amount debited from the client account within the required time frame.
- Failure to follow any other Reserve Bank guidelines on mobile or electronic fund transfers.
3. Non-adherence to Instructions of the Reserve Bank
Violating Reserve Bank instructions regarding payment transactions using UPI for the following reasons:
- Money should have been credited to the receiver’s account as promised.
- Failure to return the payment to the originating member within an allotted time in case of failure to credit the funds to the payee’s account.
(Originating member: A member who seeks to raise at a meeting business as he/she considers right)
- Non-adherence to any other instruction of the RBI on payment transactions/ UPI/ BPPS/ UPI QR Code/Bharat QR Code.
4. Non-Reversal Failure
Incorrectly transferred funds to the beneficiary account that are not reversed/ not reversed in a timely manner and expire at the end of the System Participant.
5. Any other matter
Anything else associated with breaking the rules, such as any fees or charges the Reserve Bank may have issued regarding online transactions.
A few things to know about complaints
The procedure for filing a complaint
If you want to file a complaint then frame a letter. Once you are done with it you can post or fax it. Mail or hand delivery to the concerned office of the Ombudsman is also the option.
RBI’s Ombudsman demanded no charges or fees to file a complaint. They resolve the complaint free of cost.
If you are filing a complaint then you may have to present these details:
- Your name and address.
- Both the address and the name of the branch of the System Participant against whom the accusation is made.
- If any facts are related to the complaint then present them.
- The type and magnitude of the loss you experienced (complainant).
- The relief sought,
- Declare that the complaint is maintainable in accordance with Section 9(3) of the Scheme.
What happens after a complaint is received by the Ombudsman?
The Ombudsman works hard to mediate a resolution between the system participant and the complainant in order to resolve the complaint. If the terms of the settlement are accepted, the Ombudsman will issue an order. This order is based on those terms that are binding on both the System Participant and the complainant.
If the System Participant is found to have complied with the applicable norms and practices, the complainant has been informed of this intent. The Ombudsman can close the complaint if the complaint is not received within a fixed time.
Rejection of the Complaint
Can the Ombudsman cancel a complaint at any stage? Yes, as per clause 13 of the Scheme, the Ombudsman can reject your complaint at any stage. The complaint may get cancelled on the ground of
- The complaint is not filed on grounds of complaint referred to in Clause 8,
- Not according to Sub Clause (3) of Clause 9,
- The limit of the compensation claimed is beyond the mentioned limit under Clause 12(5) and 12(6),
- The Ombudsman can reject your complaint if the proceeding of the complaint requires scrutiny. The body will check your documents and focus on oral evidence.
- Without any appropriate reason,
- The complainant failed to pursue the complaint with due diligence.
If Ombudsman finds out that the complaint has not suffered any loss.
Where can one lodge his/her complaint?
You can complaint Ombudsman for loopholes in Digital Transactions. Before filing a complaint, check for the branch or office of the System Participant against whom you are filing your complaint.
Concerns about services with centralised operations may be brought to the consideration of the Ombudsman. Lodge your complaint at the Ombudsman’s offices under whose jurisdiction the branch (held responsible) is located.
What happens if the complaint is not settled by agreement?
If the Ombudsman determines that a System Participant’s service is deficient and the complaint cannot be resolved within a time frame, it will proceed to issue an Award.
What happens when you reject the Ombudsman’s decision?
If you reject the Ombudsman’s decision, in any case, the Scheme provides another option. This is the appellate mechanism. The appellate mechanism is for both the complainant and the System Participant.
If any individual is not treated properly by the Ombudsman, they can approach the Appellate Authority.
For instance, the Appellate Authority appointed a Deputy Governor who oversees the department of the RBI. He is responsible for carrying out the Scheme. You can address your grievances at the RBI’s Appellate Authority’s address:
The Appellate Authority
Ombudsman Scheme for Digital Transactions
Consumer Education and Protection Department
Reserve Bank of India
First Floor, Amar Building, Fort,
Ombudsman is the impartial body that attempts to resolve the issue without taking a position. The RBI selected a senior official to serve as the Ombudsman for digital transactions.
What is the basis for filing complaints with the Ombudsman?
You can file complaints on any ground like payment failures related to mobile, prepaid payment instruments, or electronic fund transfers.
Can a complaint be filed through an authorised agent?
The complaint can be lodged with the help of an authorised agent of the complainant (except an advocate).
How many Ombudsman for Digital Transactions have been appointed and where are they located?
There are a total of 21 Ombudsmen appointed for Digital Transactions. The offices of these ombudsmen are located mostly in state capitals. The offices of these ombudsmen for digital transactions’ addresses and phone numbers are available on the official website of RBI.
Can I claim compensation for mental agony and harassment?
For mental harassment, the Ombudsman awarded a compensation of not more than ₹ 0.1 million. The Ombudsman considers lost yield, costs related to the complaint, harassment, etc., when allocating compensation.