Ombudsman Scheme for NBFCS

The RBI has launched Ombudsman Scheme for non-banking financial companies (NBFCs) for redressal of complaints against NBFCs. The scheme will provide a cost-free and expeditious complaint redressal mechanism relating to deficiency in the services by NBFCs covered under the Scheme. The offices of the NBFC ombudsmen will function at four metro centres — Chennai, Kolkata, Mumbai and New Delhi.

The Scheme provides for an Appellate mechanism under which the complainant/ NBFC has the option to appeal against the decision of the Ombudsman before the Appellate Authority.

Difference Between Banks & NBFCS
  • NBFCs cannot accept demand deposits;
  • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; •
  • Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks
Regulation Of NBFCS
  • RBI regulates the companies which deal in lending, accepting deposits, financial leasing, hire purchase and acquisition of shares / stocks etc.
  • The companies that take up activities like stock broking, merchant banking etc. are regulated by SEBI
  • Insurance Companies – IRDA
  • Chit fund – Respective State Governments
  • Nidhi companies – Ministry of Corporate Affairs.
  • Housing finance companies – National Housing Bank {February, 2018}