PM Modi Launches RBI Retail Direct, Integrated Ombudsman Schemes Today. Know What It Means For Customers

Under the RBI Retail Direct Scheme, investors can easily open and maintain their government securities account online with the RBI, free of cost

PM Modi will launch two innovative customer-centric initiatives of the Reserve Bank of India

New Delhi: Prime Minister Narendra Modi launched two innovative customer-centric initiatives of the Reserve Bank of India (RBI), the Retail Direct Scheme, and the Reserve Bank - Integrated Ombudsman Scheme on Friday through via video conferencing.

The virtual event will be attended by finance minister Nirmala Sitharaman and RBI governor Shaktikanta Das. It is notified under RBI’s public awareness initiative.

What’s RBI Retail Direct Scheme aimed at?

RBI had first introduced this initiative in a February policy review while calling it a “major structural reform” . The RBI Retail Direct Scheme is designed to improve access to government securities market for retail investors. The scheme also offers a new avenue for directly investing in securities issued by the government and the state governments. Under the scheme, investors can easily open and maintain their government securities account online with the RBI, free of cost.

Earlier, these securities were only available to banks and financial institutions. You could also invest in them through mutual funds investing in G-secs or through a demat account. It means investors can apply for central government securities, Treasury Bills, State Development Loans and Sovereign Gold Bonds.

Using their savings bank account, payment for transactions can be made through Internet-banking and UPI.

What are G-Secs?

G-secs are basically debt securities that the government issues to borrow money. There are two types of G-secs-- the treasury bills which mature in 91, 182 and 364 days and the long-term or dated G-secs that could have a maturity period of 5-40 years.

How will Integrated Ombudsman Scheme help customers?

The RBI Integrated Ombudsman Scheme is aimed at improving customer grievance redressal mechanism. This scheme is alunched at a time when there is a steep rise in the number of complaints against various regulated entities from 1.64 lakh complaints in 2017-18 to 3.30 lakh complaints in 2019-20.

It is aimed at improving the grievance redress mechanism for resolving customer complaints against entities regulated by RBI.

At present, the RBI’s alternate grievance redress mechanism comprises of three Ombudsman schemes, including the Banking Ombudsman Scheme launched in 1995, the Ombudsman Scheme for Non-Banking Financial Companies from 2018 and the Ombudsman Scheme for Digital Transactions launched in 2019.

On reviewing the internal grievance redressal of banks and other regulated entities, the need was felt to integrate the three Ombudsman Schemes into one, simplify the scheme by covering all complaints involving deficiency in service, and centralising the receipt and initial processing of complaints to enhance process efficiency.

In line with the ‘One Nation – One Ombudsman’ approach, RBI will implement the Integrated Ombudsman Scheme for all customers of RBI regulated entities — banks, NBFCs and non-bank payment system participants.

Under the scheme, customers can file their complaint from anywhere at any time through portal or email or through physical mode at one point of receipt, without the need to identify any specific Ombudsman or Scheme. The central theme of the scheme is based on ‘One Nation-One Ombudsman’ with one portal, one email and one address for the customers to lodge their complaints. There will be a single point of reference for customers to file their complaints, submit the documents, track status and provide feedback. A multi-lingual toll-free number will provide all relevant information on grievance redress and assistance for filing complaints.