Central and State Co-operative Banks under RBI Integrated Ombudsman Scheme

RBI extends its Ombudsman coverage

Central and State Co-operative Banks under RBI Integrated Ombudsman Scheme: The Reserve Bank of India (RBI) has brought Central and State Co-operative Banks under the ambit of the Reserve Bank – Integrated Ombudsman Scheme (RB-IOS), 2021. This decision was taken under Section 35A of the Banking Regulation Act, 1949, empowering the RBI to issue directions in the public interest.

This move ensures that customers of co-operative banks now have access to the same grievance redress mechanism available to other financial institutions regulated by the RBI.

About the Integrated Ombudsman Scheme 2021

The RB-IOS, 2021 was launched to offer customers of regulated entities a speedy, cost-effective, and impartial redressal mechanism. It is a unified platform that simplifies complaint handling across multiple financial entities.

The scheme initially covered:

• All Commercial Banks and Regional Rural Banks (RRBs)
• Scheduled and Non-Scheduled Urban Co-operative Banks with deposit size of ₹50 crore or more
• Non-Banking Financial Companies (NBFCs) having customer interface and asset size of ₹100 crore or above
• System Participants under the Payment and Settlement Systems Act, 2007
• Credit Information Companies (CICs)

With the recent inclusion, Central and State Co-operative Banks have now been formally added, expanding the reach of customer protection.

Integration of Earlier Schemes

Before the Integrated Scheme, there were three separate grievance redress mechanisms:

1. Banking Ombudsman Scheme, 2006
2. Ombudsman Scheme for Non-Banking Financial Companies, 2018
3. Ombudsman Scheme for Digital Transactions, 2019

All three were merged into a single framework under the “One Nation, One Ombudsman” principle, making the process jurisdiction-neutral.

Static GK fact: The first Banking Ombudsman Scheme was introduced by the RBI in 1995, initially covering public sector banks.

Powers of the Ombudsman

Under the RB-IOS, the Ombudsman is empowered to:

• Award compensation up to ₹20 lakh for loss suffered by the complainant.
• Grant additional ₹1 lakh for the complainant’s time, expenses, and mental distress.

This provides a powerful deterrent against service deficiency and strengthens consumer confidence in India’s banking system.

Static GK Tip: The Governor of RBI in 2021, when the Integrated Ombudsman Scheme was launched, was Shaktikanta Das.

Significance of the inclusion

The inclusion of Co-operative Banks ensures that millions of rural and semi-urban customers can now seek justice through the RBI’s grievance portal — https://cms.rbi.org.in. This step enhances financial inclusion, accountability, and transparency in the cooperative banking sector.

It also aligns with the RBI’s larger mission to make the financial consumer protection framework universal across all categories of regulated entities.

Static Usthadian Current Affairs Table

Central and State Co-operative Banks under RBI Integrated Ombudsman Scheme: