Empowering Financial Trust: Deputy Governor Shri Swaminathan J Emphasizes the Crucial Role of Internal Ombudsman

In a keynote speech at the Conference of Internal Ombudsman in Mumbai on January 16, 2024, Deputy Governor Shri Swaminathan J highlights the pivotal role of Internal Ombudsman in ensuring customer-centric financial excellence.

Key Points from the Speech:

1. Fostering Dialogue for Improvement: The conference serves as a platform for exchanging ideas and thoughts to enhance the efficacy of the Internal Ombudsman mechanism within regulated entities.

2. Investing in Capabilities: Shri Swaminathan J emphasizes the significance of investing in Internal Ombudsman's capabilities for transparent and fair grievance redressal, reinforcing customer trust in the banking system.

3. The Evolution of Internal Ombudsman: Introduced nine years ago, the Internal Ombudsman serves as a forum for customers to obtain grievance redressal within the regulated entity itself, reducing the need to approach the RBI Ombudsman.

4. Enhancing Independence:Regulations provide for tenure and compensation protection of the Internal Ombudsman, emphasizing functional reporting to the Board, aiming to strengthen independence.

5. Crucial Focus Areas for Internal Ombudsman:

   - Independent Impartial Mindset: 

Shri Swaminathan J urges Internal Ombudsman to adopt an independent impartial mindset while adjudicating complaints, ensuring transparent and reasoned decisions.

   - Unbiased Constructive Feedback: Providing unbiased feedback on policy misinterpretations fosters a culture of continuous improvement within regulated entities.

   - Qualitative Improvement in Systems: Internal Ombudsman can contribute valuable insights for enhancing systems and procedures, ensuring efficiency and effectiveness in grievance redressal.

   - Guiding Remedial Measures:

 Proactive guidance on addressing recurring complaints contributes to a more responsive and consumer-centric operational framework.

6. Role of Regulated Entities: Shri Swaminathan J underscores the importance of regulated entities in supporting the Internal Ombudsman mechanism for effective grievance redressal.

7. Recent Regulatory Developments: A comprehensive Master Direction issued in December 2023 harmonizes the Internal Ombudsman framework, introducing the role of Deputy Internal Ombudsman and reinforcing consistency in various aspects.

8. Anticipated Outcomes: The revised framework aims to reinforce the Internal Ombudsman mechanism, enhancing the Internal Grievance Redress system in regulated entities.

9. Building Trust and Reliability: Effective grievance redressal is foundational to customer trust in the financial system, elevating brand value and customer delight.

10. Internal Ombudsman as a Force for Positive Transformation: Strengthening the Internal Ombudsman role positions regulated entities as pillars of trust and stability in the financial landscape.

Deputy Governor Shri Swaminathan J acknowledges and empowers the Internal Ombudsman as a force for positive transformation, ethical banking, and a key player in shaping a future marked by trust, integrity, and enduring success. The conference aims to strengthen the Internal Ombudsman mechanism for a more robust financial ecosystem.