Strengthening customer grievance redress - the role of the internal ombudsman
Keynote address by Mr Swaminathan J, Deputy Governor of the Reserve Bank of India, at the Internal Ombudsman Conference, organised by the Reserve Bank of India, Mumbai, 13 July 2026.
Ladies and gentlemen, it is an honor to address this diverse assembly representing the financial sector. The essence of banking lies in the relationship between customers and institutions, built on trust, fairness, and swift responses to issues. The Reserve Bank emphasizes this principle through its RBI Ombudsman mechanism, Internal Ombudsman framework, and regulatory expectations.
An unresolved grievance impacts customer confidence, reputation, and regulatory scrutiny. The framework should resolve customer concerns swiftly at the lowest level within the institution. A grievance signifies the customer asking the institution to reaffirm the relationship; the institution's response defines the customer's perception.
The Internal Ombudsman mechanism is crucial, offering institutions an opportunity to correct errors, address unfair outcomes, and resolve customer concerns within the entity. Success is measured by metrics like the declining need for further escalation to higher forums. The Internal Ombudsman's independence, neutrality, and fairness are crucial; avoidance of mechanical concurrence with the institution's decision is essential.
Rules are vital for consistency, but failures often stem from applying processes without understanding the customer's circumstances. Internal Ombudsmen must bring independent judgement, fairness, and empathy to transform grievance redress into a meaningful resolution. Complaint closure and resolution are distinct; technical closure doesn't necessarily mean the issue is resolved from the customer's perspective.
Timeliness is also key - delayed resolution can diminish customer confidence. Institutions should assess grievance redress mechanisms based on the quality of resolution, not just the number of complaints handled. Every grievance should be evaluated on three parameters: fairness, responsiveness, and accountability.
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