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Important FAQs from RBI website

Priority Sector

1. What are the different categories under priority sector?

Priority Sector includes the following categories:

(i) Agriculture
(ii)Micro,Small and Medium Enterprises
(iii)Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others

2. What are the Targets and Sub-targets for banks under priority sector?

The targets and sub-targets for banks under priority sector are as follows:

Domestic scheduled commercial banks

(excluding Regional Rural Banks and Small Foreign banks with less than
Categories
Finance Banks) and Foreign banks with 20 20 branches
branches and above
Total 40 per cent of Adjusted Net Bank Credit or Credit 40 per cent of Adjusted Net
Priority Equivalent Amount of Off-Balance Sheet Exposure, Bank Credit or Credit
Sector whichever is higher. Equivalent Amount of Off-
Balance Sheet Exposure,
whichever is higher, to be
achieved in a phased manner
by 2020.
Agriculture 18 per cent of ANBC or Credit Equivalent Amount Not applicable
# of Off-Balance Sheet Exposure, whichever is
higher.
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Within the 18 percent target for agriculture, a target

of 8 percent of ANBC or Credit Equivalent Amount
of Off-Balance Sheet Exposure, whichever is higher
is prescribed for Small and Marginal Farmers.
Micro 7.5 percent of ANBC or Credit Equivalent Amount Not applicable
Enterprises of Off-Balance Sheet Exposure, whichever is
higher.
Advances Not applicable
10 percent of ANBC or Credit Equivalent Amount of
to Weaker
Off-Balance Sheet Exposure, whichever is higher
Sections
# Domestic banks have been directed to ensure that their overall direct lending to non-corporate
farmers does not fall below the system-wide average of the last three years achievement.

3. What are the categories under ‘Agriculture’?

The activities covered under Agriculture are classified under three sub-categories viz. Farm credit,
Agriculture infrastructure and Ancillary activities.

4. Whether limits are prescribed for loans sanctioned to Micro, Small and Medium Enterprises
to be classified as priority sector?

For classification under priority sector, no limits are prescribed for bank loans sanctioned to Micro,
Small and Medium Enterprises engaged in the manufacture or production of goods under any
industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951
and as notified by the Government from time to time. The manufacturing enterprises are defined in
terms of investment in plant and machinery under MSMED Act 2006.

Bank loans to Micro, Small and Medium Enterprises engaged in providing or rendering of services
and defined in terms of investment in equipment under MSMED Act, 2006, irrespective of loan limits,
are eligible for classification under priority sector, w.e.f. March 1, 2018.

5. What is the applicable limit and purpose for social infrastructure loans under priority
sector?

Bank loans up to a limit of ₹ 5 crore per borrower for building social infrastructure for activities namely
schools, health care facilities, drinking water facilities and sanitation facilities (including loans for
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construction/ refurbishment of toilets and improvement in water facilities in the household) in Tier II
to Tier VI centres are eligible for classification under priority sector.

Bank credit to Micro Finance Institutions (MFI) extended for on-lending to individuals/ members of
SHGs/ JLGs for water and sanitation facilities is also eligible for classification as priority sector loans
under ‘Social Infrastructure’ subject to certain criteria.

6. What is the applicable limit and purpose for loans for renewable energy under priority
sector?

Bank loans up to a limit of ₹ 15 crore to borrowers for purposes like solar based power generators,
biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy
based public utilities viz. street lighting systems, and remote village electrification are eligible to be
classified under priority sector loans under ‘Renewable Energy’. For individual households, the loan
limit is ₹ 10 lakh per borrower.

7. What is the loan limit for education under priority sector?

Loans to individuals for educational purposes including vocational courses upto ₹ 10 lakh
irrespective of the sanctioned amount are eligible for classification under priority sector.

8. What is the limit for housing loans under priority sector? (Revised)

Loans to individuals up to ₹ 28 lakh in metropolitan centres (with population of ten lakh and above)
and loans up to ₹ 20 lakh in other centres for purchase/construction of a dwelling unit per family, are
eligible to be considered as priority sector provided the overall cost of the dwelling unit in the
metropolitan centre and at other centres does not exceed ₹ 35 lakh and ₹ 25 lakh, respectively.
Housing loans to banks’ own employees are not eligible for classification under priority sector.

9. What is included under Weaker Sections under priority sector?

Priority sector loans to the following borrowers are eligible to be considered under Weaker Sections
category:-

No. Category
1. Small and Marginal Farmers
Artisans, village and cottage industries where individual credit limits do not exceed
2.
₹ 1 lakh
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3. Beneficiaries under Government Sponsored Schemes such as National Rural
Livelihoods Mission (NRLM), National Urban Livelihood Mission (NULM) and Self
Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)
4. Scheduled Castes and Scheduled Tribes
5. Beneficiaries of Differential Rate of Interest (DRI) scheme
6. Self Help Groups
7. Distressed farmers indebted to non-institutional lenders
Distressed persons other than farmers, with loan amount not exceeding ₹ 1 lakh
8.
per borrower to prepay their debt to non-institutional lenders
9. Individual women beneficiaries up to ₹ 1 lakh per borrower
10. Persons with disabilities
11. Overdrafts upto ₹ 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY)
accounts, provided the borrowers’ household annual income does not exceed ₹
100,000/- for rural areas and ₹ 1,60,000/- for non-rural areas
12. Minority communities as may be notified by Government of India from time to time

In States, where one of the minority communities notified is, in fact, in majority, item (12) will cover
only the other notified minorities. These States/ Union Territories are Jammu & Kashmir, Punjab,
Meghalaya, Mizoram, Nagaland and Lakshadweep.

10. Is bank credit to Micro Finance Institutions (MFIs) treated as priority sector lending?

Bank credit to MFIs (NBFC-MFIs, societies, trusts, etc) extended for on-lending to individuals and
also to members of SHGs/JLGs is eligible for categorisation as priority sector advance under
respective categories viz., Agriculture, Micro, Small and Medium Enterprises, Social Infrastructure
and Others subject to the criteria laid down in para 19 of the Master Direction
FIDD.CO.Plan.1/04.09.01/2016-17 dated July 7, 2016 (updated as on April 16, 2018) on Priority
Sector Lending – Targets and Classification.

11. What are Priority Sector Lending Certificates (PSLCs)?

Priority Sector Lending Certificates (PSLCs) are a mechanism to enable banks to achieve the priority
sector lending target and sub-targets by purchase of these instruments in the event of shortfall. This
also incentivizes surplus banks as it allows them to sell their excess achievement over targets
thereby enhancing lending to the categories under priority sector. Under the PSLC mechanism, the
seller sells fulfilment of priority sector obligation and the buyer buys the obligation with no transfer
of risk or loan assets.
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12. What are the instructions to Banks with regard to acknowledgement of priority sector
loan applications?

Banks should provide acknowledgement for loan applications received under priority sector loan. A
time limit is required to be prescribed by the Bank Board within which the bank communicates its
decision in writing to the applicants.

13. What is the rate of interest for loans under priority sector?

The rate of interest on bank loans will be as per directives issued by the Department of Banking
Regulation of RBI, from time to time. Priority sector guidelines do not lay down any preferential rate
of interest for priority sector loans.
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MSME

Q.1. What is the definition of MSME?

A.1. The Government of India has enacted the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as
under:

(a) Enterprises engaged in the manufacture or production, processing or preservation of goods as

specified below:

(i) A micro enterprise is an enterprise where investment in plant and machinery does not exceed
Rs. 25 lakh;

(ii) A small enterprise is an enterprise where the investment in plant and machinery is more than Rs.
25 lakh but does not exceed Rs. 5 crore; and

(iii) A medium enterprise is an enterprise where the investment in plant and machinery is more than
Rs.5 crore but does not exceed Rs.10 crore.

In case of the above enterprises, investment in plant and machinery is the original cost excluding
land and building and the items specified by the Ministry of Small Scale Industries vide its
notification No.S.O.1722 (E) dated October 5, 2006.

(b) Enterprises engaged in providing or rendering of services and whose investment in equipment
(original cost excluding land and building and furniture, fittings and other items not directly related
to the service rendered or as may be notified under the MSMED Act, 2006) are specified below.

(i) A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10
lakh;

(ii) A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh
but does not exceed Rs. 2 crore; and
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(iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2
crore but does not exceed Rs. 5 crore.

Q.2. What is the status of lending by banks to this sector?

A.2. Bank’s lending to the Micro ,Small and Medium enterprises as under is eligible to be reckoned
for priority sector advances:

a) MSMEs engaged in the manufacture or production of goods to any industry specified in the first
schedule to the Industries (Development and Regulation) Act, 1951 and as notified by the
Government from time to time is reckoned for priority sector advances.

b) MSMEs engaged in providing or rendering of services and defined in terms of investment in

equipment under MSMED Act, 2006.

Detailed guidelines on lending to the Micro, Small and Medium enterprises sector are available in
our Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017. The instructions
issued by RBI, to banks, on various matters are available on our website www.rbi.org.in.

Q.3. What is meant by Priority Sector Lending?

A.3. Priority sector lending include only those sectors as part of the priority sector, that impact large
sections of the population, the weaker sections and the sectors which are employment-intensive
such as agriculture, and Micro and Small enterprises. Detailed guidelines on Priority sector lending
are available in our Master Direction on Priority sector lending no. FIDD.CO.Plan.1/04.09.01/2016-
17 dated July 7, 2016.

Q.4. Are there any targets prescribed for lending by banks to MSMEs?

A.4. As per extant policy, certain targets have been prescribed for banks for lending to the Micro
and Small enterprise (MSE) sector. In terms of the recommendations of the Prime Minister’s Task
Force on MSMEs (Chairman: Shri T.K.A. Nair, Principal Secretary), banks have been advised to
achieve a 20 per cent year-on-year growth in credit to micro and small enterprises, a 10 per cent
annual growth in the number of micro enterprise accounts and 60 percent of total lending to MSE
sector as on corresponding quarter of the previous year to Micro enterprises.

Q.5. Are there specialized bank branches for lending to the MSMEs?
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A.5. Public sector banks have been advised to open at least one specialized branch in each district.
The banks have been permitted to categorize their MSME general banking branches having 60%
or more of their advances to MSME sector, as specialized MSME branches for providing better
service to this sector as a whole. As per the policy package announced by the Government of India
for stepping up credit to MSME sector, the public sector banks will ensure specialized MSME
branches in identified clusters/centres with preponderance of small enterprises to enable the
entrepreneurs to have easy access to the bank credit and to equip bank personnel to develop
requisite expertise. Though their core competence will be utilized for extending finance and other
services to MSME sector, they will have operational flexibility to extend finance/render other services
to other sectors/borrowers.

Q.6. How many such specialized branches for lending to MSMEs are there?

A.6. As reported by Scheduled Commercial Banks (SCBs), on March 2017, there are 2998
specialized MSME branches.

Q.7. How do banks assess the working capital requirements of borrowers?

A.7. The banks have been advised to put in place loan policies governing extension of credit facilities
for the MSE sector duly approved by their Board of Directors (Refer circular RPCD.SME &
NFS.BC.No.102/06.04.01/2008-09 dated May 4, 2009). Banks have, however, been advised to
sanction limits after proper appraisal of the genuine working capital requirements of the borrowers
keeping in mind their business cycle and short term credit requirement. As per Nayak Committee
Report, working capital limits to SSI units is computed on the basis of minimum 20% of their
estimated turnover up to credit limit of Rs.5 crore.

Q.8. Is there any provision for grant of composite loans by banks?

A.8. A composite loan limit of Rs.1 crore can be sanctioned by banks to enable the MSME
entrepreneurs to avail of their working capital and term loan requirement through Single Window in
terms of our Master Direction on lending to the MSME sector dated July 24, 2017. All scheduled
commercial banks were advised by our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on
May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction
working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement
of commercial production thereby ensuring that there are no cases where term loan has been
sanctioned and working capital facilities are yet to be sanctioned.

Q.9. What is Cluster financing?

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A.9. Cluster based approach to lending is intended to provide a full-service approach to cater to the
diverse needs of the MSE sector which may be achieved through extending banking services to
recognized MSE clusters. A cluster based approach may be more beneficial (a) in dealing with well-
defined and recognized groups (b) availability of appropriate information for risk assessment (c)
monitoring by the lending institutions and (d) reduction in costs.

The banks have, therefore, been advised to treat it as a thrust area and increasingly adopt the same
for SME financing. United Nations Industrial Development Organisation (UNIDO) has identified 388
clusters spread over 21 states in various parts of the country. The Ministry of Micro, Small and
Medium Enterprises has also approved a list of clusters under the Scheme of Fund for Regeneration
of Traditional Industries (SFURTI) and Micro and Small Enterprises Cluster Development
Programme (MSE-CDP) located in 121 Minority Concentration Districts. Accordingly, banks have
been advised to take appropriate measures to improve the credit flow to the identified clusters.

Banks have also been advised that they should open more MSE focussed branch offices at different
MSE clusters which can also act as counselling centres for MSEs. Each lead bank of the district
may adopt at least one cluster (Refer circular RPCD.SME & NFS.No.BC.90/06.02.31/2009-10 dated
June 29, 2010)

Q.10. What are the RBI guidelines on interest rates for loans disbursed by the commercial
banks?

A.10. As part of the financial sector liberalisation, all credit related matters of banks including
charging of interest have been deregulated by RBI and are governed by the banks' own lending
policies. With a view to improve transparency in the methodology followed by banks for determining
interest rates on advances and the efficiency of monetary policy transmission, from April 1, 2016,
banks are required to sanction all their advances with reference to the Marginal cost of fund based
lending rates (MCLR). In no case the interest rates on advances shall fall below MCLR. However,
loans sanctioned under the Base rate/BPLR regime shall continue till the maturity or renewal. Banks
shall have to provide an option to the customers to switch to the MCLR from Base rate/BPLR and
this should not be treated as a foreclosure of existing facility.

Q.11. Can the MSE borrowers get collateral free loans from banks?

A.11. In terms of our circular RPCD.SME&NFS.BC.No.79/06.02.31/2009-10 dated May 6, 2010,

banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended
to units in the MSE sector. Further, in terms of our circular RPCD/PLNFS/BC.No.39/06.02.80/2002-
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04 dated November 3, 2003, banks may, on the basis of good track record and financial position of
MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with
the approval of the appropriate authority.

Q.12. What is the Credit Guarantee Fund Trust Scheme for MSEs?

A.12. The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund
Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE
sector without the need for collaterals / third party guarantees. The main objective of the scheme is
that the lender should give importance to project viability and secure the credit facility purely on the
primary security of the assets financed. The Credit Guarantee scheme (CGS) seeks to reassure the
lender that, in the event of a MSE unit, which availed collateral - free credit facilities, failing to
discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the
lender up to 85 per cent of the outstanding amount in default.

The CGTMSE would provide cover for credit facility up to Rs. 200 lakh which have been extended
by lending institutions without any collateral security and /or third party guarantees. A guarantee and
annual service fee is charged by the CGTMSE to avail of the guarantee cover. For more details you
may visit www.cgtmse.in.

Q.13. Is credit rating mandatory for the MSE borrowers?

A.13. Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit
rating done as it would help in credit pricing of the loans taken by them from banks.

Q.14. Why is credit rating of the MSME borrowers necessary?

A.14. With a view to facilitating credit flow to the MSME sector and enhancing the comfort-level of
the lending institutions, the credit rating of MSME units done by reputed credit rating agencies should
be encouraged. Banks are advised to consider these ratings as per availability and wherever
appropriate structure their rates of interest depending on the ratings assigned to the borrowing
MSME units.

(15 to 25 deleted)

Q.26. What is Trade Receivables Discounting System (TReDS)?

A. 26. The objective of TReDS is to create Electronic Bill Factoring Exchanges which could
electronically accept and settle bills so that MSMEs could encash their receivables without delay.
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This will not only give them greater access to finance but will also put greater discipline on corporates
to pay their dues on time. For more details you may refer to RBI guidelines for setting up and
operating TReDS on https://www.rbi.org.in/Scripts/FS_PressRelease.aspx?prid=32664&fn=9.

Q.27. What is the Certified Credit Counsellors (CCC) Scheme?

A.27 In terms of announcement in para 48 of First Bi-monthly Monetary Policy Statement, 2016-17,
Reserve Bank laid down a framework for accreditation of credit counsellors which was shared with
SIDBI for laying down operational guidelines. Accordingly, the scheme was launched by SIDBI in
July 2017. As per the scheme, Certified Credit Counsellors are institutions or individuals registered
with SIDBI who shall assist MSMEs in preparing project reports in a professional manner which
would, in turn, help banks make more informed credit decisions.
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BO Scheme

1. What is the Banking Ombudsman Scheme?

The Banking Ombudsman Scheme is an expeditious and inexpensive forum for bank customers for
resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman
Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect
from 1995. Presently the Banking Ombudsman Scheme 2006 (As amended upto July 1, 2017) is in
operation.

2. Who is a Banking Ombudsman?

The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress
customer complaints against deficiency in certain banking services covered under the grounds of
complaint specified under Clause 8 of the Banking Ombudsman Scheme 2006 (As amended upto
July 1, 2017).

3. How many Banking Ombudsmen have been appointed and where are they located?

As on date, twenty Banking Ombudsmen have been appointed with their offices located mostly in
state capitals. The addresses and contact details of the Banking Ombudsman offices have been
provided under Annex I of the Scheme.

4. Which are the banks covered under the Banking Ombudsman Scheme, 2006?

All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative
Banks are covered under the Scheme.

5. What are the grounds of complaints?

The Banking Ombudsman can receive and consider any complaint relating to the following
deficiency in banking services:

• non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
• non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose,
and for charging of commission in respect thereof;
• non-acceptance, without sufficient cause, of coins tendered and for charging of commission in
respect thereof;
• non-payment or delay in payment of inward remittances ;
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• failure to issue or delay in issue of drafts, pay orders or bankers’ cheques;
• non-adherence to prescribed working hours ;
• failure to provide or delay in providing a banking facility (other than loans and advances) promised
in writing by a bank or its direct selling agents;
• delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-observance of
the Reserve Bank directives, if any, applicable to rate of interest on deposits in any savings, current
or other account maintained with a bank ;
• complaints from Non-Resident Indians having accounts in India in relation to their remittances from
abroad, deposits and other bank related matters;
• refusal to open deposit accounts without any valid reason for refusal;
• levying of charges without adequate prior notice to the customer;
• Non-adherence to the instructions of Reserve Bank on ATM / Debit Card and Prepaid Card
operations in India by the bank or its subsidiaries
• Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on credit card
operations
• Non-adherence to the instructions of Reserve Bank with regard to Mobile Banking / Electronic
Banking service in India by the bank
• Non-disbursement or delay in disbursement of pension (to the extent the grievance can be attributed
to the action on the part of the bank concerned, but not with regard to its employees);
• Refusal to accept or delay in accepting payment towards taxes, as required by Reserve
Bank/Government;
• Refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of
Government securities;
• Forced closure of deposit accounts without due notice or without sufficient reason;
• Refusal to close or delay in closing the accounts;
• Non-adherence to the fair practices code as adopted by the bank;
• Non-adherence to the provisions of the Code of Bank's Commitments to Customers issued by
Banking Codes and Standards Board of India and as adopted by the bank ;
• Non-observance of Reserve Bank guidelines on engagement of recovery agents by banks;
• Non-adherence to Reserve Bank guidelines on para-banking activities like sale of insurance / mutual
fund /other third party investment products by banks
• Any other matter relating to the violation of the directives issued by the Reserve Bank in relation to
banking or other services.

A customer can also lodge a complaint on the following grounds of deficiency in service with respect
to loans and advances
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• non-observance of Reserve Bank Directives on interest rates;
• delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan
applications;
• non-acceptance of application for loans without furnishing valid reasons to the applicant; and
• non-adherence to the provisions of the fair practices code for lenders as adopted by the bank or
Code of Bank’s Commitment to Customers, as the case may be;
• non-observance of any other direction or instruction of the Reserve Bank as may be specified by
the Reserve Bank for this purpose from time to time.
• The Banking Ombudsman may also deal with such other matter as may be specified by the Reserve
Bank from time to time.

6. When can one file a complaint?

One can file a complaint before the Banking Ombudsman if the reply is not received from the bank
within a period of one month after the bank concerned has received one's complaint, or the bank
rejects the complaint, or if the complainant is not satisfied with the reply given by the bank.

7. When will one's complaint not be considered by the Ombudsman?

One's complaint will not be considered if:

a. One has not approached his bank for redressal of his grievance first.
b. One has not made the complaint within one year from the date of receipt of the reply of the bank or
if no reply is received, and the complaint to Banking Ombudsman is made after the lapse of more
than one year and one month from the date of complaint made to the bank.
c. The subject matter of the complaint is pending for disposal / has already been dealt with at any other
forum like court of law, consumer court etc.
d. Frivolous or vexatious complaints.
e. The institution complained against is not covered under the scheme.
f. The subject matter of the complaint is not pertaining to the grounds of complaint specified under
Clause 8 of the Banking Ombudsman Scheme. If the complaint is for the same subject matter that
was settled through the office of the Banking Ombudsman in any previous proceedings.

8. What is the procedure for filing the complaint before the Banking Ombudsman?

One can file a complaint with the Banking Ombudsman simply by writing on a plain paper. One can
also file it online at (“click here to lodge a complaint”) or by sending an email to the Banking
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Ombudsman. There is a form along with details of the scheme in our website. However, it is not
mandatory to use this format.

9. Where can one lodge his/her complaint?

One may lodge his/ her complaint at the office of the Banking Ombudsman under whose jurisdiction,
the bank branch complained against is situated.

For complaints relating to credit cards and other types of services with centralized operations,
complaints may be filed before the Banking Ombudsman within whose territorial jurisdiction the
billing address of the customer is located. (Click here for address and area of operation of the
Banking Ombudsman)

10. Can a complaint be filed by one s authorized representative?

Yes. The complainant can be filed by one s authorized representative (other than an advocate).

11. Is there any cost involved in filing complaints with Banking Ombudsman?

No. The Banking Ombudsman does not charge any fee for filing and resolving customers’
complaints.

12. Is there any limit on the amount of compensation as specified in an Award?

The amount, if any, to be paid by the bank to the complainant by way of compensation for any loss
suffered by the complainant is limited to the amount arising directly out of the act or omission of the
bank or ₹ 20 lakhs (₹ Two Million), whichever is lower.

13. Can compensation be claimed for mental agony and harassment?

The Banking Ombudsman may award compensation not exceeding ₹ 1 lakh (₹ One Hundred
Thousand) to the complainant for mental agony and harassment. The Banking Ombudsman will
take into account the loss of the complainant's time, expenses incurred by the complainant,
harassment and mental anguish suffered by the complainant while passing such award.

14. What details are required in the application?

Name and address of the complainant, the name and address of the branch or office of the bank
against which the complaint is made, facts giving rise to the complaint supported by documents, if
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any, the nature and extent of the loss caused to the complainant, the relief sought from the Banking
Ombudsman and a declaration about the compliance with conditions which are required to be
complied with by the complainant under Clause 9(3) of the Banking Ombudsman Scheme.

15. What happens after a complaint is received by the Banking Ombudsman?

The Banking Ombudsman endeavours to promote, through conciliation or mediation, a settlement

of the complaint by agreement between the complainant and the bank named in the complaint.

If the terms of settlement (offered by the bank) are acceptable to one in full and final settlement of
one's complaint, the Banking Ombudsman will pass an order as per the terms of settlement which
becomes binding on the bank and the complainant.

16. Can the Banking Ombudsman reject a complaint at any stage?

Yes. The Banking Ombudsman may reject a complaint at any stage if it appears to him that a
complaint made to him is:

• not on the grounds of complaint referred to above

• compensation sought from the Banking Ombudsman is beyond ₹ 20 lakh (₹ Two Million).
• requires consideration of elaborate documentary and oral evidence and the proceedings before the
Banking Ombudsman are not appropriate for adjudication of such complaint
• the complaint is without any sufficient cause
• the complaint that it is not pursued by the complainant with reasonable diligence
• in the opinion of the Banking Ombudsman there is no loss or damage or inconvenience caused to
the complainant.

17. What happens if the complaint is not settled by agreement?

If a complaint is not settled by an agreement within a period of one month, the Banking Ombudsman
proceeds further to pass an Award. Before passing an award, the Banking Ombudsman provides
reasonable opportunity to the complainant and the bank, to present their case.

It is up to the complainant to accept the award in full and final settlement of or to reject it.

18. Is there any further recourse available if one rejects the Banking Ombudsman’s decision?

Any person aggrieved by an Award issued under Clause 12 or the decision of the Banking
Ombudsman rejecting the complaint for the reasons specified in sub-clause (d) to (g) of Clause 13
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of the Banking Ombudsman Scheme 2006 (As amended up to July 1, 2017) can approach the
Appellate Authority. The Appellate Authority is vested with a Deputy Governor of the RBI.

Other recourse and/or remedies available to him/her as per the law can also be explored. The bank
also has the option to file an appeal before the Appellate Authority under the Scheme.

19. Is there any time limit for filing an appeal?

One can file the appeal against the award or decision of the Banking Ombudsman rejecting the
complaint within 30 days of the date of receipt of the Award, The Appellate Authority may, if he/ she
is satisfied that the applicant had sufficient cause for not making an application for appeal within
time, also allow a further period not exceeding 30 days.

20. How does the appellate authority deal with the appeal?

The appellate authority may:

i. dismiss the appeal; or

ii. allow the appeal and set aside the Award; or
iii. send the matter to the Banking Ombudsman for fresh disposal in accordance with such directions
as the appellate authority may consider necessary or proper; or
iv. modify the Award and pass such directions as may be necessary to give effect to the modified
award; or
v. pass any other order as it may deem fit.
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PSLC

1. What is the expiry date of PSLC?

All PSLCs will be valid till March 31st and will expire on April 1st.

2. Whether PSLCs can be issued for a limited period i.e., for one reporting quarter and
multiples thereof?

The duration of the PSLCs will depend on the date of issue with all PSLCs being valid till March 31st
and expiring on April 1st.

3. Whether service tax/ stamp duty/ transaction tax will be applicable while paying fee for
PSLC?

PSLCs may be construed in the nature of 'goods'#, dealing in which has been notified as a
permissible activity under section 6(1)(o) of BR Act vide Government of India Notification dated May
4, 2016. The tax implications on account of trading in PSLCs may be determined by the banks in
accordance with the applicable tax laws. Further, as per the extant guidelines, no transaction
charge/ fees is applicable on the participating banks payable to RBI for usage of the PSLC module
on e-Kuber portal.

4. Whether PSLC – Weaker Sections or PSLC – Export Credit can be traded?

There are only four eligible categories of PSLCs i.e. PSLC General, PSLC Small and Marginal
Farmer, PSLC Agriculture & PSLC Micro Enterprises.

5. Whether Export Credit may form a part of PSLC 'General' and whether banks’ surplus in
Export Credit can be sold as PSLC 'General’? Can foreign banks with less than 20 branches
reckon PSLC General towards the incremental target for lending to sectors other than
exports beyond the overall target of 32 per cent?

'Export Credit' can form a part of underlying assets against the PSLC - General. However, any bank
issuing PSLC-General against 'Export Credit' shall ensure that the underlying 'Export Credit' portfolio
is also eligible for priority sector classification by domestic banks.

Foreign banks with less than 20 branches are not allowed to reckon PSLC General towards
fulfilment of their incremental target for lending to sectors other than exports beyond the overall
 6377543089
target of 32 per cent. However, such banks are allowed to reckon PSLC Agriculture, PSLC Micro
Enterprises and PSLC SF / MF for the same.

6. Where can the banks look for market information like prevailing prices, lot size, and
historical transactions done by other market participants? Will this information be available
in E-Kuber?

The trade summary of PSLC market is available to the participants through the e-Kuber portal. Any
new functionality will be notified to the participants via 'News & Announcements' section under e-
Kuber portal.

7. Is secondary market allowed for PSLCs i.e., Sale of surplus at a later point in time post
purchase in anticipation of deficit at a prior point of time. Can the purchasing bank re-sell
the PSLCs? Will only the net PSLC position be reckoned for ascertaining the underlying
asset?

A bank can purchase and issue PSLCs as per its requirements. The net position of PSLCs sold and
purchased has to be included while reporting the quarterly and annual priority sector returns.
However, with regard to ascertaining the underlying assets, as on March 31st, the bank must have
met the priority sector target by way of the sum of outstanding priority sector portfolio and net of
PSLCs issued and purchased.

8. What happens if the RBI inspection team, at a later date, de-classifies a particular PSLC
(which has been already traded by the bank as PSLC) ineligible?

The misclassifications, if any, will have to be reduced from the achievement of PSLC seller bank
only. There will be no counterparty risk for the PSLC buyer, even if, the underlying asset of the
traded PSLC gets misclassified.

9. While there is no transfer of assets, will there be any impact on the ANBC calculation?

The banks may refer to guidelines related to computation of ANBC for priority sector reporting as
advised vide Master Circular on PSL dated July 1, 2015.

10. The buyer would pay a fee to the seller of the PSLC which will be market determined. Is
there any standard/ minimum fee prescribed by the RBI, for purchase of any PSLC?

The premium will be completely market determined. No floor/ ceiling has been prescribed by RBI in
this regard.
 6377543089
11. How the charges/commission shall be paid through E-Kuber portal or separate RTGS is
required to be made?

There will be real time settlement of the matched premium and respective current accounts of the
participating banks with RBI will be debited/ credited to the extent of matched premium accordingly.

12. Will there be automatic matching of trades or can the buyer/seller select the
counterparty? Will partial matching also happen?

The order matching will be done on anonymous basis through the portal and the buyer/ seller cannot
select the counterparty. Partial matching will happen depending on the matching of premium and
availability of category wise PSLC lots for sale and purchase.
 6377543089
BSBDA

1. Query

What is the definition of 'Basic Savings Bank Deposit Account' (BSBDA)?

Response

All the existing ‘No-frills’ accounts opened pursuant to guidelines issued vide circular
RPCD.RF.BC.54/07.38.01/2005-06 dated December 13, 2005 and RPCD.CO.No.RRB.BC.58/
03.05.33(F) / 2005-06 dated December 27, 2005 and converted into BSBDA in compliance with the
guidelines issued in circular RPCD.CO.RRB.RCB.BC.No.24/07.38.01/2012-13 dated August 22,
2012 as well as fresh accounts opened under the said circular should be treated as BSBDA.
Accounts enjoying additional facilities under the reasonable pricing structure for value added
services, exclusively for BSBDA customers should not be treated as BSBDAs.

2. Query

Whether the guidelines issued on ‘no-frills’ account with 'nil' or very low minimum balances will
continue even after the introduction of ‘Basic Savings Bank Deposit Account’?

Response

No. In supersession of instructions contained in circular RPCD.RF.BC.54/07.38.01/2005-06 dated

December 13, 2005 and RPCD.CO.No.RRB.BC.58/03.05.33(F)/2005-06 dated December 27,
2005 on No Frill accounts, banks have now been advised to offer a 'Basic Savings Bank Deposit
Account' to all their customers vide RPCD.CO.RRB.RCB.BC.No.24/07.38.01/2012-13 dated August
22, 2012 which will offer minimum common facilities as stated therein. Banks are required to convert
the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.

3. Query

Can an Individual have any number of 'Basic Savings Bank Deposit Account' in one bank?

Response

No. An individual is eligible to have only one 'Basic Savings Bank Deposit Account' in one bank.

4. Query
 6377543089
Whether a 'Basic Savings Bank Deposit Account' holder can have any other saving account in that
bank ?

Response

Holders of 'Basic Savings Bank Deposit Account' will not be eligible for opening any other savings
account in that bank. If a customer has any other existing savings account in that bank, he / she will
be required to close it within 30 days from the date of opening a 'Basic Savings Bank Deposit
Account'.

5. Query

Can an individual have other deposit accounts where one holds 'Basic Savings Bank Deposit
Account’?

Response

Yes. One can have Term/Fixed Deposit, Recurring Deposit etc., accounts in the bank where one
holds 'Basic Savings Bank Deposit Account'.

6. Query

Whether the ‘Basic Savings Bank Deposit Account’ can be opened by only certain types of
individuals like poor and weaker sections of the population?

Response

No. The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service
available to all customers, through branches.

7. Query

Whether there are any restrictions like age, income, amount etc criteria for opening BSBDA by banks
for individuals?

Response

No. Banks are advised not to impose restrictions like age and income criteria of the individual for
opening BSBDA.
 6377543089
8. Query

Is the 'Basic Savings Bank Deposit Account' a part of the Financial Inclusion plans of banks?

Response

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI
for furthering Financial Inclusion objectives. All the accounts opened earlier as 'no-frills' account vide
RPCD Circular dated RPCD.RF.BC.54/07.38.01/2005-06 dated December 13,
2005 and RPCD.CO.No.RRB.BC.58/03.05.33(F)/2005-06 dated December 27, 2005 should be
renamed as BSBDA as per the instructions contained in paragraph 2 of our Circular
RPCD.CO.RRB.RCB.BC.No.24/07.38.01/2012-13 dated August 22, 2012and all the new accounts
opened since the issue of our circular RPCD.CO.RRB.RCB.BC.No.24 dated August 22, 2012 should
be reported under the monthly report of the progress of Financial Inclusion plans submitted by banks
to RPCD, CO.

9. Query

What are KYC norms applicable to BSBDA accounts? Are there any relaxations in KYC norms for
BSBDAs?

Response

The 'Basic Savings Bank Deposit Account' would be subject to provisions of PML Act and Rules
and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of
bank accounts issued from time to time. BSBDA can also be opened with simplified KYC norms.
However, if BSBDA is opened on the basis of Simplified KYC, the accounts would additionally be
treated as “BSBDA-Small account” and would be subject to the conditions stipulated for such
accounts as indicated in our circulars RPCD.CO.RCB.AML.BC.No.63/07.40.00/2010-11 dated April
26, 2011 and RPCD.CO.RRB.AML.BC.No.15/03.05.33(E)/2011-12 dated August 8, 2011.

10. Query

Can I have a ‘Small Account’ in ABC Bank as per the Government of India Notification
No.14/2010/F.No.6/2/2007-E.S. dated December 16, 2010. Can I have additionally a 'Basic Savings
Bank Deposit Account’?

Response
 6377543089
No, the BSBDA customer cannot have any other savings bank account in the same bank. If 'Basic
Savings Bank Deposit Account’ is opened on the basis of simplified KYC norms, the account would
additionally be treated as a 'Small Account' and would be subject to conditions stipulated for such
accounts as indicated in our circulars RPCD.CO.RCB.AML.BC.No.63/07.40.00/2010-11 dated April
26, 2011 and RPCD.CO.RRB.AML.BC.No.15/03.05.33(E)/2011-12 dated August 8, 2011 on
'Opening of Small Account.'

11. Query

What are the conditions stipulated for accounts which are additionally to be treated as ‘BSBDA-
Small Account’?

Response

As notified in terms of Govt. of India notification dated December 16, 2010, BSBDA-Small Accounts
would be subject to the following conditions:

i. Total credits in such accounts should not exceed one lakh rupees in a year.

ii. Maximum balance in the account should not exceed fifty thousand rupees at any time

iii. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees
in a month

iv. Foreign remittances cannot be credited to Small Accounts without completing normal KYC
formalities

v. Small accounts are valid for a period of 12 months initially which may be extended by another 12
months if the person provides proof of having applied for an Officially Valid Document.

vi. Small Accounts can only be opened at CBS linked branches of banks or at such branches where
it is possible to manually monitor the fulfillments of the conditions

12. Query

What kinds of services are available free in the 'Basic Savings Bank Deposit Account’?

Response
 6377543089
The services available free in the 'Basic Savings Bank Deposit Account’ will include deposit and
withdrawal of cash; receipt / credit of money through electronic payment channels or by means of
deposit / collection of cheques at bank branches as well as ATMs.

13. Query

Is there requirement of any initial minimum deposit while opening a BSBDA as per the circular dated
August 22, 2012?

Response

There is no requirement for any initial deposit for opening a BSBDA.

14. Query

Whether banks are free to offer more facilities than those prescribed for ‘Basic Savings Bank Deposit
Account’?

Response

Yes. However, the decision to allow services beyond the minimum prescribed has been left to the
discretion of the banks who can either offer additional services free of charge or evolve requirements
including pricing structure for additional value-added services on a reasonable and transparent basis
to be applied in a non-discriminatory manner with prior intimation to the customers. Banks are
required to put in place a reasonable pricing structure for value added services or prescribe minimum
balance requirements which should be displayed prominently and also informed to the customers
at the time of account opening. Offering such additional facilities should be non - discretionary, non-
discriminatory and transparent to all ‘Basic Savings Bank Deposit Account’ customers. However
such accounts enjoying additional facilities will not be treated as BSBDAs.

15. Query

If BSBDA customers have more than 4 withdrawals and request for cheque book at additional cost,
will it cease to be a BSBDA?

Response
 6377543089
Yes. Please refer to response to the above query (Query No.14). However, if the bank does not levy
any additional charges and offers more facilities free than those prescribed under BDBDA a/cs
without minimum balance then such accounts can be classified as BSBDA.

16. Query

Whether the existing facility available in a normal saving bank account of five free withdrawals in a
month in other banks' ATMs as per IBA (DPSS) instructions will hold good for BSBDA?

Response

No. In BSBDA, banks are required to provide free of charge minimum four withdrawals, through
ATMs and other mode including RTGS/NEFT/Clearing/Branch cash withdrawal/transfer/internet
debits/standing instructions/EMI etc. It is left to the banks to either offer free or charge for additional
withdrawal/s. However, in case the banks decide to charge for the additional withdrawal, the pricing
structure may be put in place by banks on a reasonable, non-discriminatory and transparent manner
by banks.

17. Query

Are the banks free to levy Annual ATM Debit Card charges?

Response

Banks should offer the ATM Debit Cards free of charge and no Annual fee should be levied on such
Cards.

18. Query

Whether Balance enquiry in ATMs also should be counted within the four withdrawals permitted
under BSBDA?

Response

Balance enquiry through ATMs should not be counted in the four withdrawals allowed free of charge
at ATMs.

19. Query
 6377543089
If a customer of BSBDA agrees not to have ATM Debit card should the bank give ATM debit card
by force?

Response

ATM debit cards may be offered at the time of opening BSBDA and issued if the customer requests
for the same in writing. Banks need not force ATM debit cards on such customers.

20. Query

What about customers who are illiterate or old who may not be in a position to safe keep and use
the ATM debit card and PIN associated with it?

Response

Banks while opening the BSBDA should educate such customers about the ATM Debit Card, ATM
PIN and risk associated with it. However, if customer chooses not to have ATM Debit Card banks
need not force ATM debit cards on such customers. If, however, customer opts to have an ATM
Debit Card, banks should provide the same to BSBDA holders through safe delivery channels by
adopting the same procedure which they have been adopting for delivery of ATM Debit Card and
PIN to their other customers.

21. Query

Whether Passbooks are also to be offered free to BSBDA holders?

Response

Yes. BSBDA holders should be offered passbook facility free of charge in line with our instructions
contained in circulars RPCD.CO.RF.BC.28/07.40.06/2006-07 dated October 11,
2006 and RPCD.CO.RRB.BC.No.29/03.05.28-A/2006-07 dated October 13, 2006.

22. Query

If a customer opens a BSBDA but does not close his existing Savings Bank Account within 30 days,
are banks then free to close such savings bank accounts?

Response
 6377543089
While opening the BSBDA customers’ consent in writing be obtained that his existing non-BSBDA
Savings Banks accounts will be closed after 30 days of opening BSBDA and banks are free to close
such accounts after 30 days.

23. Query

In certain accounts like NREGA where disbursements are made weekly and if a month has five
weeks, it may result in more than four withdrawals. In such cases can banks permit five withdrawals?

Response

In BSBDA, banks are required to provide free of charge minimum four withdrawals, including through
ATM and other mode. Beyond four withdrawals, it is left to discretion of the banks to either offer free
or charge for additional withdrawal/s. However pricing structure may be put in place by banks on a
reasonable, non-discretionary, non-discriminatory and transparent manner by banks.

24. Query

What is the prescribed rate of interest payable on balances in such ‘Basic Savings Bank Deposit
Account’?

Response

Our instructions contained in circular RPCD.CO.RRB.BC.No.57/03.05.33/2011-12 dated January

30, 2012 on Deregulation of Savings Bank Deposit Interest Rate, are applicable to deposits held in
‘Basic Savings Bank Deposit Account’.

25. Query

In terms of RBI circular DPSS.CO.CHD.No.274/03.01.02/2012-13 dated August 10, 2012, if

'payable at par' / 'multi-city' cheques are issued to BSBDA customers based on their request, can
banks prescribe minimum balance requirements?

Response

BSBDA does not envisage cheque book facility in the minimum facilities that it should provide to
BSBDA customers. They are free to extend any additional facility including cheque book facility free
of charge (in which case the account remains BSBDA) or charge for the additional facilities (in which
case the account is not BSBDA).
 6377543089
26. Query

What is the time frame available to banks for converting 'No-Frills' Account as Basic Savings Bank
Deposit Account? What is the time frame available to banks for issuing ATM Cards to all the existing
Basic Savings Bank Deposit Account holders?

Response

All the existing 'No-Frill' accounts may be treated as BSBDA accounts from the date of the circular
i.e., August 22, 2012 and banks may offer the prescribed facilities as per the circular such as issuing
ATM card etc., to the existing ‘No-Frill’ account holders as and when the customer approaches the
bank. However, for customers opening new accounts after the issue of our circular should be
provided with the prescribed facilities immediately on opening of the account.

27. Query

Whether the normal saving bank account can be converted into BSBDA at the request of customer?

Response

Yes. Such customers should give their consent in writing and they should be informed of the features
and extent of services available in BSBDAs.
 6377543089
NBFC

The Reserve Bank of India has introduced an Ombudsman Scheme for customers of Non-Banking
Financial Companies (NBFCs). The Ombudsman Scheme for Non-Banking Financial Companies,
2018 (the Scheme), is an expeditious and cost free apex level mechanism for resolution of
complaints of customers of NBFCs, relating to certain services rendered by NBFCs. The Scheme
is being introduced under Section 45 L of the Reserve Bank of India Act, 1934, with effect from
February 23, 2018.

1. Who is the NBFC Ombudsman?

The NBFC Ombudsman is a senior official appointed by the Reserve Bank of India to redress
customer complaints against NBFCs for deficiency in certain services covered under the grounds
of complaint specified under Clause 8 of the Scheme.

2. How many NBFC Ombudsman have been appointed and where are they located?

As on date, four NBFC Ombudsman have been appointed with their offices located at Chennai,
Kolkata, New Delhi and Mumbai. The addresses, contact details and territorial jurisdiction of the
Ombudsman is provided in the Annex I of the Scheme.

3. Which are the NBFCs covered under the Scheme?

NBFCs, as defined in Section 45-I (f) of the Reserve Bank of India Act, 1934 and registered with
the RBI under Section 45-IA of the Reserve Bank of India Act, 1934, which (a) are authorised to
accept deposits; or (b) have customer interface, with assets size of one billion rupees or above, as
on the date of the audited balance sheet of the previous financial year, or of any such asset size
as the RBI may prescribe, are covered under the Scheme. The Scheme initially covers NBFCs
authorized to accept deposits, and would be gradually extended to cover other identified NBFCs.

4. What are the grounds of complaints?

As per Clause 8 of the Scheme, the NBFC Ombudsman can receive and consider any complaint
on the following grounds:

a. non-payment or inordinate delay in the payment of interest on deposits;

b. non-adherence to the Reserve Bank directives, if any, applicable to rate of interest on deposits;
c. non-repayment or inordinate delay in the repayment of deposits;
 6377543089
d. non-presentation or inordinate delay in the presentation of post-dated cheques provided by the
customer;
e. failure to convey in writing, the amount of loan sanctioned along with terms and conditions
including annualised rate of interest and method of application thereof;
f. failure or refusal to provide sanction letter/ terms and conditions of sanction in vernacular
language or a language as understood by the borrower;
g. failure or refusal to provide adequate notice on proposed changes being made in sanctioned terms
and conditions in vernacular language as understood by the borrower;
h. failure or inordinate delay in releasing the securities/ documents to the borrower on repayment of
all dues;
i. levying of charges without adequate prior notice to the borrower/customer;
j. failure to provide legally enforceable built-in repossession clause in the contract/ loan agreement;
k. failure to ensure transparency in the contract/ loan agreement regarding (i) notice period before
taking possession of security; (ii) circumstances under which the notice period can be waived; (iii)
the procedure for taking possession of the security; (iv) provision of final chance to be given to the
borrower for repayment of loan before the sale/ auction of the security; (v) the procedure for giving
repossession to the borrower and (vi) the procedure for sale/ auction of the security;
l. non-observance of directions issued by Reserve Bank to the NBFCs;
m. non-adherence to any of the other provisions of Reserve Bank Guidelines on Fair Practices Code
for NBFCs.

The Ombudsman may also deal with such other matter as may be specified by the Reserve Bank
from time to time.

5. When can one file a complaint?

For redressal of grievance, the complainant must first approach the concerned NBFC. If the NBFC
does not reply within a period of one month after receipt of the complaint, or the NBFC rejects the
complaint, or if the complainant is not satisfied with the reply given by the NBFC, the complainant
can file the complaint with the NBFC Ombudsman under whose jurisdiction the branch/ registered
office of the NBFC falls.

6. When will one's complaint not be considered by the Ombudsman?

One's complaint will not be considered under the following circumstances :

a. If the NBFC against whom the complaint is registered, is not covered under the Scheme.
 6377543089
b. If one has not approached the NBFC concerned in the first instance for redressal of the grievance.
c. If the subject matter of the complaint is not pertaining to the grounds of complaint specified under
Clause 8 of the Scheme.
d. If one has not made the complaint within one year from the date of receipt of reply from the NBFC;
or if no reply is received, and the complaint to NBFC Ombudsman is made after the lapse of more
than one year and one month from the date of complaint to the NBFC.
e. If the subject matter of the complaint is pending for disposal/ has already been dealt with at any
other forum like court of law, consumer court etc.
f. If the complaint is for the same subject matter that was settled through the office of the NBFC
Ombudsman in any previous proceedings.
g. If the complaint is frivolous or vexatious.

7. What is the procedure for filing the complaint before the NBFC Ombudsman?

One can file a complaint with the NBFC Ombudsman by writing on a plain paper and sending it to
the concerned office of the NBFC Ombudsman by post/fax/hand delivery. One can also file it by
email to the NBFC Ombudsman.

A complaint form along with the scheme is also available on RBI's website, though, it is not
mandatory to use this format.

8. Where can one lodge his/her complaint?

One may lodge his/ her complaint with the office of the NBFC Ombudsman under whose
jurisdiction, the alleged NBFC branch is situated. (Click here for address and area of operation of
the NBFC Ombudsman).

For complaints relating to types of services with centralized operations, complaints may be filed
before the NBFC Ombudsman within whose territorial jurisdiction the billing address of the
customer is located.

9. Can a complaint be filed by one's authorized representative?

Yes. The complaint can be filed by one’s authorized representative (other than an advocate).

10. Is there any cost involved in filing complaints with NBFC Ombudsman?

No. The NBFC Ombudsman does not charge any fee for filing and resolving customers’
complaints.
 6377543089
11. Is there any limit on the amount of compensation as specified in an Award?

The compensation amount, if any, which can be awarded by the NBFC Ombudsman, for any loss
suffered by the complainant, is limited to the amount arising directly out of the act or omission of
the NBFC or rupees one million, whichever is lower.

12. Can compensation be claimed for mental agony and harassment?

The NBFC Ombudsman may award compensation not exceeding rupees 0.1 million to the
complainant for causing mental agony and harassment. The NBFC Ombudsman, while passing
such award, will take into account the loss of the complainant's time, expenses incurred by the
complainant, harassment and mental anguish suffered by the complainant.

13. What are the details required in a complaint to the NBFC Ombudsman?

The complainant is required to give details such as, his/her name and address, the name and
address of the branch or office of the NBFC against which the complaint is made, facts giving rise
to the complaint supported by documents, if any, the nature and extent of the loss caused to the
complainant, the relief sought from the NBFC Ombudsman and a declaration that the complaint is
maintainable under Clause 9A of the Scheme.

14. What happens after a complaint is received by the NBFC Ombudsman?

The NBFC Ombudsman endeavours to promote a settlement of the complaint through conciliation/
mediation by agreement between the complainant and the NBFC. If the terms of settlement
(offered by the NBFC) are acceptable in full and final settlement of one's complaint, the NBFC
Ombudsman will pass an order as per the terms of settlement which becomes binding on the
NBFC and the complainant. If the NBFC is found to have adhered to the extant norms and
practices in vogue and the complainant has been informed to this effect through appropriate
means and complainant’s objections, if any, are not received by the NBFC Ombudsman within the
time frame provided, the NBFC Ombudsman will pass an order to close the complaint.

15. Can the NBFC Ombudsman reject a complaint at any stage?

Yes. As per the 13 of the Scheme, the NBFC Ombudsman may reject a complaint at any stage on
the following grounds:

a. the complaint made is not on the grounds of complaint referred to in clause 8 of the Scheme; or
b. the compensation sought is beyond the pecuniary limit specified under the Scheme; or
 6377543089
c. the complaint made requires consideration of elaborate documentary and oral evidence and the
proceedings before the Ombudsman are not appropriate for adjudication of such complaint; or
d. the complaint made is without any sufficient cause; or
e. the complaint made is not pursued by the complainant with reasonable diligence required to be
taken; or
f. in the opinion of the Ombudsman there is no loss or damage or inconvenience caused to the
complainant.

16. What happens if the complaint is not settled by agreement?

The NBFC Ombudsman proceeds to pass an Award if the the complaint is not settled by an
agreement within a specified period as allowed by the NBFC Ombudsman. Before passing an
Award, the NBFC Ombudsman will provide reasonable opportunity to the complainant and the
NBFC to present their case. It is upto the complainant to accept the Award in full and final
settlement or reject it.

17. Is there any further recourse available if one rejects the NBFC Ombudsman’s decision?

Yes, the Scheme provides the appellate mechanism for the complainant as well as the NBFC.

Any person aggrieved by an Award issued under Clause 12 or by the decision of the NBFC
Ombudsman rejecting the complaint for the reasons specified in sub-clause (c) to (f) of Clause 13
of the Scheme, can approach the Appellate Authority.

The Appellate Authority is vested with a Deputy Governor-in-Charge of the department of the RBI
implementing the Scheme. The address of the Appellate Authority is :

The Appellate Authority

Ombudsman Scheme for Non-Banking Financial Companies
Consumer Education and Protection Department
Reserve Bank of India
First Floor, Amar Building
Fort, Mumbai 400 001.

The complainant also has the option to explore other recourse and/or remedies available as per
the law.

18. Is there any time limit for filing an appeal?

 6377543089
One can file appeal against the award or the decision of the NBFC Ombudsman rejecting the
complaint, within 30 days of the date of receipt of communication of Award or rejection of the
complaint. The Appellate Authority may, if he/ she is satisfied that the applicant had sufficient
cause for not making an application for appeal within time, also allow a further period not
exceeding 30 days.

19. How does the Appellate Authority deal with the appeal?

The appellate authority may act as given under:

a. dismiss the appeal; or

b. allow the appeal and set aside the Award; or
c. send the matter to the NBFC Ombudsman for fresh disposal in accordance with such directions as
the Appellate Authority may consider necessary or proper; or
d. modify the Award and pass such directions as may be necessary to give effect to the modified
award; or
e. pass any other order as it may deem fit.