The Reserve Bank of India issued new Directions establishing an Internal Ombudsman framework for non-bank prepaid payment instrument (PPI) issuers above a scale threshold, requiring an apex-level independent review of customer complaints that are wholly rejected or only partially resolved before the issuer closes them. The framework applies to non-bank PPI issuers with more than one crore prepaid payment instruments outstanding as on March 31, 2025 or thereafter, and remains applicable even if outstanding instruments later fall below the threshold. Eligible issuers must appoint at least one Internal Ombudsman (and may appoint Deputy Internal Ombudsmen) who meet specified experience, independence and age criteria, with the Internal Ombudsman reporting administratively to the managing director or chief executive officer and functionally to the board. A fully automated complaints management system must auto-escalate partially resolved or wholly rejected complaints to the Internal Ombudsman within prescribed timelines, the Internal Ombudsman must record a reasoned decision, and the final response must be communicated to the complainant within 30 days of the issuer receiving the complaint; complainants must also be advised of the option to approach the RBI Ombudsman where applicable. The Directions also introduce board oversight expectations, quarterly complaint-pattern analysis, annual internal audit of implementation, and reporting to the RBI on Internal Ombudsman appointments and periodic performance information. The Directions take effect immediately, but compliance with certain requirements, including annual board determination of Internal Ombudsman staffing and specified complaint-system classification and closure controls, is required by June 30, 2026. PPI issuers that meet the eligibility threshold after March 31, 2025 must comply from six months after meeting it, and the 2023 master direction on the Internal Ombudsman framework is repealed with existing appointments and actions carried over under the new Directions.
Reserve Bank of India 2026-01-14
Reserve Bank of India requires large non-bank PPI issuers to appoint Internal Ombudsmen and auto-escalate rejected complaints for review
The Reserve Bank of India has issued new Directions mandating an Internal Ombudsman framework for non-bank prepaid payment instrument issuers with over one crore instruments outstanding as of March 31, 2025. The framework requires independent review of unresolved customer complaints, automated escalation, and compliance with specific governance and reporting standards by June 30, 2026, with immediate effect for eligible issuers.