RBI directs the likes of Paytm and PhonePe to have an internal ombudsman

The Reserve Bank of India (RBI) has directed large pre-paid instrument (PPI) issuers to set up an internal ombudsman mechanism to address customers' grievances. The banking regulator issued this diktat while announcing the monetary policy on October 4.

A pre-payment issuer is typically a mobile wallet. Some of the popular and large PPI issuers are Paytm, Mobikwik, Zeta India, PayU, PhonePe and Amazon Pay. These large PPI issuers have been witnessing an enormous growth in their customer base and transaction scale, given the impetus around the digital agenda of the Government.

Addressing wallet grievances

Vikram Babbar, Partner and Financial Services Lead, Forensic & Integrity Services, EY says, “Increased scale has led to a steady increase in customer complaints – a proportion of which is also related to fraud and misconduct. The internal ombudsman mechanism is imperative to ensure customer grievances are resolved in the most effective manner and within a defined timeframe.”

In January this year, the RBI had launched the Ombudsman Scheme for Digital Transactions. An individual can file a complaint with the digital ombudsman if the issuer does not reply within 30 days of raising a complaint, rejects the complaint or does not provide a satisfactory response.

However, on Friday, RBI said that in addition to its digital ombudsman, all PPIs must also have an internal ombudsman and serve as the first point of help to resolve their customers’ complaints. As is the present system, if the customer does to get a satisfactory response by 30 days, she is free to escalate the complaint to RBI’s digital ombudsman. Today’s guideline would nudge PPIs to put in a place a framework around identification and classification of these complaints, be they about customer experience or any frauds where the customers are victims.

A customer can also complain about the failure to load funds in the wallet (a commonly-heard complaint across the digital space), unauthorized electronic fund transfer, failure to refund, failure to transfer within reasonable time, etc. under the ombudsman scheme.

Sunil Khosla, Head-Digital Business of India Transact Services Limited says, “Most of the large PPIs will be having an internal redressal set-up, but now they will have a formal body as per the regulator’s directions and it’s a win-win announcement for customers and the companies.”

RBI will issue further instructions on the internal ombudsman scheme by October 15.

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