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September 2, 2022
All Articles by: Mr. M. GOVINDARAJAN       View Profile
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In the ‘Monetary Policy Statement’ dated 05.12.2018 Ombudsman scheme for digital transactions was announced.   With the digital mode for financial transactions gaining traction in the country, there was an emerging need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence in this channel. It has, therefore, been decided to implement an ‘Ombudsman Scheme for Digital Transactions’ covering services provided by entities falling under Reserve Bank’s regulatory jurisdiction.

The Reserve Bank of India, in exercise of powers under Section 18 of the Payment and Settlement Systems Act, 2007 provided for a mechanism of Ombudsman for redressal of complaints against deficiency in services related to digital transactions.  The Reserve Bank of India directed that the System Participants defined under the Ombudsman Scheme for Digital Transactions, 2019 shall come within the ambit, and should comply with the provisions of the Ombudsman Scheme for Digital Transactions, 2019.

Digital transactions

Section 3(5) of the Scheme defines the expression ‘digital transactions’ as a payment transaction in a seamless system effected without the need for cash at least in one of the two legs, if not in both. This includes transactions made through digital / electronic modes wherein both the originator and the beneficiary use digital / electronic medium to send or receive money.

System Participant

Section 3(11) of the scheme defines the expression ‘system participant’ as any person other than a bank participating in a payment system as defined under Section 2 of the Payment and Settlement Systems Act, 2007 excluding a ‘System Provider’.

Office of Ombudsman

The RBI may appoint one or more of its officers in the rank of Chief General Manager or General Manager to be known as Ombudsman for Digital Transactions to carry out the functions entrusted to them by or under the Scheme.  The office of the Ombudsman for Digital Transactions shall be located at such places as may be specified by the Reserve Bank.  RBI established Ombudsman in the following cities-

  • Ahmadabad,
  • Bangaluru,
  • Bhopal,
  • Bhubaneswar,
  • Chandigarh,
  • Chennai,
  • Dehradun,
  • Guwahati,
  • Hyderabad,
  • Jaipur,
  • Jammu,
  • Kanpur,
  • Kolkata,
  • Mumbai (2 places),
  • Patna,
  • New Delhi (3 places),
  • Raipur,
  • Ranchi,
  • Trivandrum.


The Reserve Bank shall specify the territorial limits to which the authority of each Ombudsman for Digital Transactions appointed under the Scheme shall extend.


The complaint may be filed at free of cost.

Grounds of complaint

Any person may file a complaint with the Ombudsman for Digital Transactions (‘Ombudsman’ for short) having jurisdiction on any one of the following grounds alleging deficiency in service:

  • non-adherence to the instructions of Reserve Bank by System Participants about Prepaid Payment Instruments;
  • non-adherence to the instructions of the Reserve Bank on Mobile / Electronic fund transfers by System Participants;
  • non-adherence to instructions of Reserve Bank / respective System Provider to System Participants, on payment transactions through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code;
  • non-reversal / failure to reverse within reasonable time, funds wrongly transferred to the beneficiary account due to lapse at the end of System Participant; or
  • any other matter relating to the violation of the directives including on fees / charges, if any, issued by the Reserve Bank in relation to digital transactions.

Procedure for filing complaint

The complainant shall, before making a complaint to the Ombudsman made a written representation to the System Participant.  If the system participant rejected the representation or the complainant had not received any reply within a period of one month after the System Participant received her/his representation, or, the complainant is not satisfied with the reply given to her/him by the System Participant, the complaint may be made to the Ombudsman.


The complaint is to be made not later than one year after the complainant has received the reply of the System Participant to her/ his representation or where no reply is received, not later than one year and one month after the date of the representation to the System Participant.

Non entertainment of complaint

The complaint may not be entertained by Ombudsman on the following, if-

  • the complaint is in respect of the same cause of action which was settled or dealt with on merits by the Ombudsman for Digital Transactions in any previous proceedings, whether or not, received from the same complainant or along with one or more complainants or one or more of the parties concerned with the cause of action;
  • the complaint pertains to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a Decree or Award or Order has been passed by any such Court, Tribunal, Arbitrator or Forum;
  • the complaint is frivolous or vexatious in nature;
  • the complaint falls under the disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007;
  • the complaint pertains to disputes arising from a transaction between customers.

Filing complaint

  • Any person who has a grievance on any one or more of the grounds may, himself or through his authorized representative (other than an advocate), make a complaint to the Ombudsman within whose jurisdiction the branch or office of the System Participant complained against is located.
  • A complaint arising out of services with centralized operations shall be filed before the Ombudsman within whose territorial jurisdiction the billing / declared address of the customer is located.
  • The complaint in writing shall be duly signed by the complainant or his authorized representative.
  • In the complaint the following shall be stated clearly-
  • The name and the address of the complainant;
  • The name and address of the branch or office of the System Participant against which the complaint is made;
  • The facts giving rise to the complaint;
  • The nature and extent of the loss caused to the complainant; and
  • The relief sought for.
  • The complainant shall file along with the complaint, copies of the documents, if any, which he / she proposes to rely upon.
  • A complaint made through electronic means may be accepted by the Ombudsman.
  • The Ombudsman may also entertain complaints covered under this Scheme received by Central Government or Reserve Bank and forwarded to the Ombudsman for disposal.

Calling for information

The Ombudsman may require the System Participant against whom the complaint is made or any other System Participant concerned with the complaint, to provide any information or furnish certified copies of any document relating to the complaint which is or is alleged to be in its possession.  In the event of the failure of a System Participant to comply with the requisition without sufficient cause, the Ombudsman may, if he/ she deems fit, draw the inference that the information, if provided, or copies if furnished, would be unfavorable to the System Participant.


The Ombudsman shall maintain confidentiality of any information or document that may come into his knowledge or possession in the course of discharging his duties and shall not disclose such information or document to any person except with the consent of the person furnishing such information or document.  The Ombudsman may disclose the information or document furnished by a party in a complaint to the other party or parties to the extent considered by him to be reasonably required to comply with any legal requirement or the principles of natural justice and fair play in the proceedings.

Rejection of the complaint

The complaint may be rejected by Ombudsman at any stage if it appears to him that the complaint is made of-

  • not on the grounds of complaint as discussed before; or
  • the complaint is non maintainable;
  • beyond the limit of compensation prescribed (actual loss or Rs.2 million whichever is lower);
  • requiring consideration of elaborate documentary and oral evidence and the proceedings before the Ombudsman for Digital Transactions are not appropriate for adjudication of such complaint; or
  • without any sufficient cause; or
  • not pursued by the complainant with reasonable diligence; or
  • in the opinion of the Ombudsman for Digital Transactions there is no loss or damage or inconvenience caused to the complainant.

The Ombudsman shall, if it appears at any stage of the proceedings that the complaint pertains to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or order has been passed by any such court, tribunal, arbitrator or forum, pass an order rejecting the complaint giving reasons thereof.

Disposal of the complaint

The Ombudsman shall, to the satisfaction of the parties involved, dispose of the complaint through:

  • settlement by agreement between parties; or
  • conciliation and mediation between parties; or
  • passing an Award as per the provisions of the Scheme.

Settlement by agreement

The Ombudsman shall send a copy of the complaint to the System Participant named in the complaint, under advice to the Nodal Officer, and endeavor to promote a settlement of the complaint by agreement between the complainant and the System Participant through conciliation or mediation.  The Ombudsman shall not be bound by any rules of evidence and may follow such procedure as he may consider just and proper.  However it may require the Ombudsman to provide an opportunity to the complainant to furnish his/her submissions in writing along with documentary evidence within a time limit on the written submissions made by the System Participant.

If the Ombudsman is of the opinion that the documentary evidence furnished and written submissions by both the parties are not conclusive enough to arrive at a decision, he may call for a meeting of System Participant and the complainant together, to promote an amicable resolution.  If such meeting is held and it results in a mutually acceptable resolution of the grievance, the proceedings of the meeting shall be documented and signed by the parties specifically stating that they are agreeable to the resolution.   Thereafter the Ombudsman shall pass an order recording the fact of settlement annexing thereto the terms of the settlement.


If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as the Ombudsman for Digital Transactions may allow the parties, Digital Transactions he may, after affording the parties a reasonable opportunity to present their case, pass an Award.   The Award shall state briefly the reasons for passing the Award.   The Ombudsman for shall not have the power to award compensation which is more than the actual loss suffered, or two million rupees whichever is lower.   The Ombudsman may also award compensation in addition to the above but not exceeding Rs. 0.1 million to the complainant, taking into account the loss of the complainant's time, expenses incurred by the complainant, harassment and mental agony suffered by the complainant.

An Award shall lapse and be of no effect unless the complainant furnishes to the System Participant concerned within a period of 30 days from the date of receipt of copy of the Award, a letter of acceptance of the Award in full and final settlement of his/her claims.

Obligation of Systems Participant

It shall be the obligation of the System Participant concerned to implement the settlement arrived with the complainant or the Award passed by the Ombudsman when it becomes final and send a report in this regard to the Reserve Bank within 15 days of the Award becoming final. In the event of non-implementation of settlement or the Award, the complainant may represent to the Reserve Bank.  The Reserve Bank may initiate such action under the provisions of applicable Statutes, as it deems fit.


An appeal may be filed by the aggrieved party against the award or rejection of complaint before the Appellate Authority within 30 days from the date of receipt of the award or the communication rejecting the award.   The Appellate Authority may, if satisfied that the applicant had sufficient cause for not making the appeal within time, allow a further period not exceeding 30 days.

The appeal may be filed by a System Participant only with the previous sanction of the Chairman or, in his absence, the Managing Director or the Executive Director or the Chief Executive Officer or any other equivalent officer. 

The Deputy Governor in charge of the Department of the Reserve Bank implementing the Scheme is the Appellate Authority.

The Appellate Authority shall, after giving the parties a reasonable opportunity of being heard-

  • dismiss the appeal; or,
  • allow the appeal and set aside the Award; or
  • remand the matter to the Ombudsman for Digital Transactions for fresh disposal in accordance with such directions as the Appellate Authority may consider necessary or proper; or,
  • modify the Award and pass such directions as may be necessary to give effect to the Award so modified; or,
  • pass any other order as it may deem fit.


By: Mr. M. GOVINDARAJAN - September 2, 2022


Discussions to this article


Has the ombudsman scheme for digital transactions been notified and brought into account and if so can the details for availing the services,be shared

By: Palanisamy Rajendiran
Dated: 03/09/2022


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