PM Modi Launches RBI Scheme That Allows Retail Investors To Directly Buy Central And State Govt Bonds

Prime Minister Narendra Modi today (Nov 12) launched two new customer-centric initiatives of the Reserve Bank of India (RBI) through video-conferencing today on November 12.

Union Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das also attended the event.

The two RBI schemes -- the retail direct scheme and the integrated ombudsman scheme – are aimed at deepening the debt market and improve customer grievance redressal mechanism.

Speaking on the occasion, PM Modi said that while the RBI Retail Direct Scheme will provide small investors in the country with a safe medium of investment in government securities, the Integrated Ombudsman Scheme, will help in moving towards a 'One Nation, One Ombudsman System' in the banking sector today.

RBI's retail direct and the integrated ombudsman scheme will widen the investment horizon for investors and make capital markets more accessible to the investors, PM Modi added.

To further strengthen the banking sector, cooperative banks were also brought under the purview of RBI, the PM Modi said. Due to this the governance of these banks is also improving and the trust in this system is getting stronger even among the lakhs of depositors who are there, he added,

Pointing out that the UPI has become the world's leading country in terms of digital transactions in a very short span of time. In just 7 years, PM said that India has jumped 19 times in terms of digital transactions.

"Today our banking system is operational 24 hours, 7 days and 12 months anytime, anywhere in the country" he said.

RBI Retail Direct Scheme

RBI Retail Direct Scheme is aimed at enhancing access to the government securities market for retail investors.

RBI Retail Direct Scheme offers them a new avenue for directly investing in the securities issued by the Centre and the state governments. The investors will be able to easily open and maintain their government securities accounts online with the RBI for free.

Leveraging technological advancements, the Retail Direct Scheme offers a portal avenue to invest in central government securities, Treasury Bills, State Development Loans and Sovereign Gold Bonds.

The scheme places India in a list of select few countries offering such a facility.

Integrated Ombudsman Scheme

As regards, the Reserve Bank-Integrated Ombudsman Scheme (RB-IOS), the statement said, it is aimed at further improving the grievance redress mechanism for resolving customer complaints against entities regulated by the central bank.

The central theme of the scheme is based on 'One Nation-One Ombudsman' with one portal, one e-mail address and one postal address for the customers to lodge their complaints.

The RBI after review decided to integrate the three Ombudsman Schemes into one and also simplified the scheme by covering all complaints involving deficiency in service by centralising the receipt and initial processing of complaints to enhance process efficiency.

RBI’s alternate grievance redress mechanism currently comprises of three Ombudsman schemes viz – the Banking Ombudsman Scheme (BOS), launched in 1995, the Ombudsman Scheme for Non-Banking Financial Companies (OS-NBFC), 2018 and the Ombudsman Scheme for Digital Transactions (OSDT), 2019.

The schemes are administered through 22 offices of RBI Ombudsman (ORBIOs). Complaints that do not fall within the ambit of the Ombudsman mechanism are handled by the Consumer Education and Protection Cells (CEPCs) functioning at 30 regional offices of RBI.

The three schemes, having evolved over different periods of time, had specified grounds of complaints which acted as a limiting factor, had different grounds of complaints, which led to uneven redress across the customers of different entities, and had different compensation structures.

There will be a single point of reference for the customers to file their complaints, submit documents, track the status of their complaints and provide feedback, it said, adding, a multi-lingual toll-free phone number will provide all the relevant information on grievance redress and assistance for filing complaints.

This Scheme (RB-IOS) will do away with the jurisdictional limitations as well as limited grounds for complaints. RBI will provide a single reference point for the customers to submit documents, track status of complaints filed and provide feedback. The complaints that are not covered under the ombudsman scheme will continued to be attended to by the Customer Education and Protection Cells (CEPCs) which are located in the 30 regional offices of RBI.

With increased awareness, digital penetration and financial inclusion there were steep rise in the number of complaints against various regulated entities. The number of complaints shot up from 1.64 lakh in 2017-18 to 3.30 lakh complaints in 2019-20, as per RBI data.

The RBI in the recent past took several steps to strengthen the customer grievance redressal system of regulated entities including issuance of guidelines for strengthening of Internal Ombudsmen, graded regulatory and supervisory actions, and launch of Complaints Management System (CMS) in 2019. PTI KR DP CS MR MR