The Reserve Bank of India (“RBI”) vide a notification dated January 31, 2019, introduced the ‘Ombudsman Scheme for Digital Transactions 2019’ (“Scheme”).

Please see below the key features of the Scheme:

a. Purpose

The Scheme has been introduced under section 18 of the Payments and Settlement Systems Act, 2007 (“PSS Act”), to provide for a mechanism of ombudsman for redressal of complaints relating to deficiency in customer services in digital transactions undertaken by customers of System Participants (as defined in the Scheme). Complaints relating to digital transactions conducted through banks will continue to be handled under the banking ombudsman scheme.

b. Relevant definitions [paragraph 3 of the Scheme]

(i) ‘Appellate Authority’ means the Deputy Governor in charge of the department of RBI implementing the Scheme;

(ii) ‘Complaint’ means any representation in writing or through electronic means containing grievance(s) alleging deficiency in service by the System Participants as mentioned in paragraph 8 of the Scheme;

(iii) ‘Digital Transaction’ means 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;

(iv) ‘System Participant’ means any person other than a bank participating in a payment system as defined under section 2 of the PSS Act excluding a System Provider;

(v) ‘System Provider’ means and includes a person who operates an authorised payment system as defined under section 2 of the PSS Act.

c. Appointment [paragraph 4 of the Scheme]

The ombudsman shall be appointed by RBI from its officers in the rank of Chief General Manager or General Manager. 

d. Grounds of complaint [paragraph 8 of the Scheme]

Any person may file a complaint free of cost with the relevant ombudsman for inter alia the following grounds alleging deficiency in service:

(i) Prepaid payment instruments

    Non-adherence by System Participants to inter alia any of the following instructions of RBI pertaining to Semi-closed System PPIs (as defined in the Scheme):

1. Failure in crediting merchant's account within reasonable time;
2. Failure to load funds within reasonable time in wallets/ cards;
3. Unauthorized electronic fund transfer; and
4. Non-adherence to any other relevant instruction of RBI.

(ii) Mobile/ electronic fund transfers

     Non-adherence by System Participants to inter alia any of the following instructions of RBI on mobile/ electronic fund transfer by System Participants:

1. Failure to effect online payment/ fund transfer within reasonable time;
2. Unauthorized electronic fund transfer; and
3. Failure to act upon stop-payment instructions within the time frame and under the circumstances notified to the customers within prescribed timeline.

(iii) Unified Payments Interface/ Bharat Bill Payment System/ Bharat QR Code/ UPI QR Code

     Non-adherence to inter alia any of the following instructions of RBI/ respective System Provider to System Participants on payment transactions through Unified Payments Interface/ Bharat Bill Payment System/           Bharat QR Code/ UPI QR Code:

1. Failure in crediting funds to the beneficiaries’ account; and 
2. Failure to return within reasonable time the payment to the originating member in case of failure to credit the funds to the beneficiary’s account.

e. Procedure for filing complaint [paragraph 9 of the Scheme]

(i) Any person may make a complaint to the relevant ombudsman within whose jurisdiction the branch or office of the System Participant compliant against is located;

(ii) The complaint shall be in writing duly signed by the complainant or his authorized representative in the form specified in annexure A of the Scheme;

(iii) A complaint under the Scheme shall lie upon fulfilment of inter alia  the following conditions:

1. The complaint does not fall under the disputes covered under section 24 of the PSS Act.
2. The complaint does not pertain 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; and
3. The complaint is 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;
4. The complainant had, before making a complaint to the relevant ombudsman (a) made a written representation to the System Participant who had rejected the complaint, or, (b) the complainant had not received any reply within a period of one month after the System Participant received her/ his representation, or, (iii) the complainant is not satisfied with the reply given to her/him by the System Participant;

f. Display of salient features of the scheme by System Participant for common knowledge of public [paragraph 15 of the Scheme]

(i) The relevant System Participant shall ensure to display prominently in all its offices and branches the internal customer grievance redressal framework, including contact details of the designated nodal officer to handle the customer complaints/ grievances along with the escalation matrix; and

(ii) The System Participant covered by the Scheme shall appoint nodal officers at their regional/ zonal offices and inform the respective office of the ombudsman.

The Scheme shall come into effect on such date as may be specified by RBI.