RBI moots ombudsman scheme for digital transactions

RBI moots ombudsman scheme for digital transactions

The Reserve Bank of India's six-member monetary policy committee (MPC) headed by RBI Governor Urjit Patel on Wednesday suggested ombudsman scheme for digital transactions.

With the digital mode for financial transactions gaining traction in the country, there is an emerging need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence in this channel, states MPC in its statement.

RBI will form the ‘Ombudsman Scheme for Digital Transactions’ if the entities fall under the Reserve Bank’s regulatory jurisdiction. MPC also stated that the scheme will be notified by the end of January 2019.

It will also come up with a framework for limiting customer liability in respect of unauthorised electronic payment transactions involving prepaid payment instruments. 

The RBI has issued instructions on limiting customer liability in respect of unauthorised electronic transactions involving banks and credit card issuing non-banking
financial companies (NBFCs).

As a measure of consumer protection, it has been decided to bring all customers up to the same level with regard to electronic transactions made by them and extend the benefit of limiting customer liability for unauthorised electronic transactions involving Prepaid Payment Instruments (PPIs) issued by other entities not covered by the extant guidelines on the subject. The guidelines will be issued by the end of December 2018.

According to a recent Credit Suisse study, India’s digital payments industry, which is currently worth around $200 billion, is expected to grow five-fold to reach $1 trillion by 2023.