Ombudsman Scheme for Digital Transactions (OSDT)

The Reserve Bank of India (RBI) has launched the Ombudsman Scheme for Digital Transactions (OSDT) under Section 18 of the Payment and Settlement Systems Act, 2007. It will provide a cost-free and expeditious complaint redressal mechanism relating to deficiency in customer services in digital transactions conducted through non-bank entities regulated by RBI.

Ombudsman Scheme for Digital Transactions

Complaints relating to digital transactions conducted through banks will continue to be handled under the Banking Ombudsman Scheme. The Scheme shall come into force from January 31, 2019.

Who are System Participants?

System Participant means any person other than a bank participating in a payment system

Which services are covered under the Complaint?

Any person may file a complaint free of cost with the Ombudsman for Digital Transactions on grounds alleging deficiency in following services:

  • Prepaid Payment Instruments
  • Mobile / Electronic Fund Transfers

When can Complaint be made?

Before filing the complaint with the Ombudsman, the complainant:

  • should had made a written representation to the System Participant who had rejected the complaint; or
  • should had not received any reply within a period of one month after the System Participant received his representation
  • is not satisfied with the reply given to her/him by the System Participant;

The complaint should not be made later than one year after the complainant has received the reply of the System Participant to his representation or, where no reply is received, not later than one year and one month after the date of the representation to the System Participant

Who can be appointed as ombudsman under OSDT?

The Reserve Bank may appoint one or more of its officers in the rank of Chief General Manager or General Manager to be known as Ombudsman for Digital Transactions to carry out the functions. The appointment of Ombudsman for Digital Transactions may be made for a period not exceeding three years at a time

Who is the Appellate Authority under Ombudsman Scheme for Digital Transactions?

The ‘Appellate Authority’ means the Deputy Governor in charge of the Department of the Reserve Bank implementing the Scheme. Any Party to the complaint aggrieved by an award of ombudsman may appeal before Appellate Authority within 30 days of the date of receipt of communication of Award.

What is the maximum compensation?

The Ombudsman for Digital Transactions has the power to award compensation to the extent of the actual loss suffered or 20 lakh rupees whichever is lower. He may also award Rs 1 lakh to the complainant for loss of his time, expenses incurred, harassment and mental agony suffered by him.

How many Ombudsman for Digital Transactions are there in India?

The offices of Ombudsman for Digital Transactions will function from the existing 21 offices of the Banking Ombudsman and will handle complaints of customers from their respective territorial jurisdiction. The scheme extends to the whole of India.

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