RBI Issues New Internal Ombudsman Rules For Credit Bureaus, NBFCs And Prepaid Payment Companies

The Reserve Bank of India has rolled out a fresh set of rules that make it mandatory for several financial sector players to appoint an internal ombudsman, a senior, independent official who will review certain customer complaints before they are finally rejected.

Through three separate notifications issued on January 14, 2026, the RBI notified the Internal Ombudsman Directions for Credit Information Companies, eligible Non-Banking Financial Companies, and large non-bank Prepaid Payment Instrument issuers. The central bank said the idea is to strengthen internal grievance handling and ensure that complaints get a second look at a senior level before being turned down.

Put simply, the new framework applies to all credit bureaus, to NBFCs that meet prescribed branch or asset-size thresholds, and to non-bank PPI issuers that have, or later cross, one crore prepaid payment instruments outstanding. Each such entity must appoint at least one internal ombudsman. Most provisions have come into force immediately, though a few operational requirements have been given time till June 30, 2026.

The RBI has been clear about what the Internal Ombudsman will and will not do. The office will not take complaints directly from customers. Instead, it will review cases that have already been examined internally and are either partly resolved or proposed to be rejected.

The directions also bar the Internal Ombudsman from representing the regulated entity before courts, tribunals, or any other forum. As the RBI put it, “the office of the IO shall not handle complaints received directly from the complainants or members of the public” and “shall not represent the regulated entity in legal cases before any court"

Certain categories of complaints are kept completely outside this mechanism. These exclusions cover matters that are already pending before courts or quasi-judicial bodies, issues linked to internal administration or staff, and disputes for which a separate statutory remedy is available under law.

By issuing entity-specific directions, the RBI has also moved away from the earlier consolidated framework. The Master Direction on Internal Ombudsman for Regulated Entities issued in December 2023 has been repealed.

At the same time, the central bank has clarified that appointments already made and actions already taken under the old Master Direction will continue to remain valid and will be treated as having been made under the new directions.