How RBI’s Ombudsman Scheme Will Boost The Online Transaction in India

The emerging innovations in digital space have changed the way we manage and handle our finances. Digital payment has become the most preferred choice of payment among the millennials. After the famous demonetisation, the usage of online transactions has considerably increased.

Because of the government’s unrelenting ‘Digital India’ push, digital transactions in the country reached a record a threefold growth. 

Almost everyone has the smartphone in his or her hands and is accessing banking at their fingertips. Given the hassle-free easy transactions, which online payment apps offer, people have readily switched to this mode of payment as their most preferred.

Owing to the sector’s immense potential, a number of global players including Google, Amazon, PayPal and Uber have already made their foray into the Indian digital payments space, with WhatsApp slated to join the bandwagon in the next few weeks.

However, every coin has two sides. With the exponential growth of digital transactions, cybercrimes and fraudulent transaction have also come into effect. This is one of the major reasons that many people are still sceptical of adapting to an online payment method.

To address this issue, Reserve Bank of India (RBI) has announced setting up of ombudsman for digital transactions.

Boosting Consumer Confidence

There is a dire need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence.

Mahesh Kumar Jain, Deputy Governor, RBI, said, “The Reserve Bank’s endeavour to build a less-cash society has facilitated a significant rise in volumes, value and channels for conducting digital transactions. For promoting the level of trust and customer confidence in this powerful channel that has wide and deep reach, a dedicated and empowered grievance redressal mechanism is a prerequisite. 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.”

Addressing Consumer Complaints

RBI’s Ombudsman is not a new concept; it has been laid out in 2006 for consumers to register complaints to the ombudsman—an RBI official in the rank of the chief general manager or general manager.

A similar structure is going to be drawn up for online transactions. An RBI-monitored system to handle the customer complaints that are not addressed by the payment service provider, the escalation matrix and turnaround time for complaint resolution will certainly go a long way in boosting consumer confidence in digital transactions.