The Reserve Bank of India (“RBI”), through a press release dated August 6, 2020, issued a statement on developmental and regulatory policy. This policy sets out various measures to enhance liquidity support for financial markets and other stakeholders and ease financial stress caused due to the COVID-19 pandemic while strengthening credit discipline. Among others, the policy also seeks to encourage digital payments. In this context, the RBI has proposed introduction of Online Dispute Resolution (“ODR”) systems for resolution of customer disputes and grievances pertaining to digital payments, using a system-driven and rule-based mechanism with zero or minimal manual intervention.
In furtherance of this policy, the RBI, on August 6, 2020, has advised authorized Payment System Operators (PSOs) – banks and non-banks – and their participants i.e., Payment System Participants (“PSPs”) to implement an ODR system for disputes and grievances. As an initial step, authorized PSOs will be required to implement an ODR system for disputes and grievances in relation to the transactions in their respective payment systems by January 1, 2021 and provide access to such a system to its PSPs. Based on the experience gained, the ODR arrangement would later be extended to cover disputes and grievances other than those related to failed transactions.
The directive for introduction of ODR has been issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007.
The minimum requirements of the ODR System are, inter alia, as follow:
In case the grievance remains unresolved up to 1 (one) month, the customer may approach the respective ombudsman for digital transactions within whose jurisdiction the branch or office of PSPs complained against, is located.
Please find a copy of the notification dated August 6, 2020 here.
This update has been contributed by Suchita Ambadipudi (Partner) and Mitali Jain (Associate).
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