When borrowers hit a wall with banks or NBFCs, the phrase “Go to the RBI Ombudsman” is often suggested as a magic solution. But is the RBI Ombudsman really the first line of defence or truly a last resort? The honest answer is that it is meant to be a last resort, but not an unreachable one. For thousands of consumers every year, it becomes the most effective channel to resolve long pending disputes once all other doors have closed.
The Reserve Bank of India (RBI) Integrated Ombudsman Scheme (RB-IOS) is designed to provide a cost-free, impartial, and efficient dispute resolution mechanism for complaints against banks, NBFCs, payment system participants, most Primary (Urban) Cooperative Banks and Credit Bureaus empowering complainants whose issues could not be resolved internally by Regulated Entities(RE).
A clear indicator of growing confidence in this mechanism is the notable increase in complaints received under the Ombudsman Scheme in the last financial year. According to the RBI’s annual report on the RBI Ombudsman Scheme for FY 2024–25, the total number of grievances registered under the RB-IOS rose by 13.55%, from 11,75,075 in FY24 to 13,34,244 in FY25. This surge over 1.33 million complaints reflects two concurrent trends: growing consumer awareness of RBI’s redressal channels, and an increase in complex financial products and services offered by RE, where disputes may arise. (Source:- Livemint)
Within these figures, banks continued to account for the majority of complaints, representing over 81% of total grievances received, followed by NBFCs with around 14.8%. Complaints related to loans and advances were the single largest category, at about 29.25% of the total, with credit-card grievances also rising sharply. These patterns underscore that a broad cross-section of consumers are turning to the RBI Ombudsman to address issues tied to everyday financial products and services.(Source:- Livemint)
The RBI Ombudsman’s rise in usage is commendable because it shows that more people are not only aware of their rights but also willing to seek a formal and institutional pathway for redress rather than informal alternatives. This trend helps strengthen accountability and encourages REs to enhance their internal grievance procedures.
However, it is equally important to understand that not all complaints filed with the RBI Ombudsman are upheld in favour of the complainant. Of the complaints disposed of by RBI Ombudsman offices in FY24-25, a portion were found maintainable and amicably resolved, while a significant share were rejected or classified on procedural or eligibility grounds. This reflects the rigorous, rules-based adjudication process that underpins the scheme, ensuring fairness for both complainants and the REs.
Notably, a sizeable subset of these rejections fall into the category of First Resort Complaints (FRCs), cases where consumers approached the RBI Ombudsman before first escalating their grievance with the concerned RE. According to industry reporting, approximately 33 per cent of the cases deemed non-maintainable in recent years were FRCs, highlighting a persistent perception among consumers that the RBI might be a more reliable or effective forum than the grievance mechanisms offered by banks and financial institutions. This trend underscores a broader issue of trust: for many consumers, navigating an internal dispute with an RE can feel opaque, slow or unresponsive, whereas the RBI’s Ombudsman framework is viewed as more structured, impartial and capable of delivering a definitive outcome. (Source:- Economic Times)
Rather than immediately serving as the “last resort,” the RBI Ombudsman is increasingly being seen as an alternative route of recourse, particularly when confidence in an RE’s internal handling is low. However, the very existence of a significant number of FRCs also serves as a reminder that the RBI Ombudsman’s rules are clear, complaints must first be taken up with the regulated entity and only escalated after the prescribed timelines have passed or adequate response has been received. (Source:- Moneylife))
These conditions, laid down in RBI’s official FAQs on the Integrated Ombudsman Scheme, underline that the forum operates on defined legal and procedural boundaries to ensure fair and orderly dispute resolution. You can read The Reserve Bank – Integrated Ombudsman Scheme, 2021, to get more clear picture of how RBI Ombudsman functions.
Overall, the upward trend in RBI Ombudsman complaints highlights a positive shift in consumer behaviour. It demonstrates that consumers are actively engaging with formal dispute resolution channels for grievances, a development that strengthens the financial ecosystem by promoting transparency, accountability and trust.
So last resort or smart escalation? Think of the RBI Ombudsman as a regulatory safety net, not a shortcut. Use it too early, and you will be sent back. Use it at the right time, with evidence, and it becomes powerful.
Yes, the RBI Ombudsman is a last resort, for genuine service failures and regulatory breaches, it is often the most effective one.