term 1. effective customer protection regulations together with an easily accessible mechanism to resolve disputes between customers and the regulated entities in a timely manner, are essential for promoting consumer confidence. further, awareness measures for customers on financial matters instills in them knowledge about their rights and responsibilities and helps them to make right financial decisions. specifically, in its pursuit of the objective of consumer protection, the reserve bank introduced the banking ombudsman scheme on june 14, 1995, for the customers of banks, which has been reviewed periodically so that it retains its relevance as an apex level complaint redressal mechanism for customers of banks. reserve bank has also launched the ombudsman schemes to include the customers of non - banking financial companies and pre - paid payment instrument ( ppi ) providers. these schemes have evolved over time as apex level complaint redressal mechanisms for customers of entities regulated by the reserve bank. i may mention here that these schemes provide a cost - free and expeditious redressal of complaints relating to deficiency in the services by eligible entities covered under respective schemes. 1 / 7 bis central bankers'speeches the reserve bank had created a dedicated customer service department in 2006 to act as the nodal department in the reserve bank for grievance redressal of complaints received from the public. the department, has since been renamed as consumer education and protection department ( cepd ), and continues to focus on providing a level playing field between suppliers and consumers of financial services, by easing the imbalances emanating from information asymmetries, inadequate disclosures and unfair treatment. in addition, the charter of customer rights2, put in place by the reserve bank in december 2014, comprising of broad over - arching principles to be adopted by banks has been playing an important role in protecting the interests of their customers. in india, we have a well - defined grievance redressal structure, the first resort on the complaint being the branch itself with proper escalation level in the banks / fsps. it is expected that the grievances of the customers are redressed in a hassle - free manner at the first point of contact with the ombudsman being the last resort. an important milestone in strengthening the grievance redressal mechanism available to bank customers was the institutionalisation of the internal ombudsman ( io ) mechanism in 2015 in all public sector banks, select private sector and foreign banks. based on a review of the framework

system will reduce manual process resulting in reduction of turnaround time ( tat ) and facilitate improved data analytics for use by stakeholders. further, cms has an awareness module on the front page containing information materials in audio, video and text formats. the role of banks / fsps let me now turn to the role of banks / fsps. all financial entities have a special relationship with their customers and thus, it is their duty to recognise issues raised by them in their financial transactions and provide a fair redressal of their customer grievances. banks / fsps need to maintain transparency in pricing, service charges, fees, and penalties. banks / fsps not only need to make sufficient disclosures on all aspects of their functioning and operations but also need to play a proactive role in educating customers on the products offered, the operational techniques, risks involved, safeguards and redressal options available. liability for customer losses due to lapses on the part of banks / fsps should lie with the latter. the reserve bank guidance on limiting customer liability in unauthorised electronic banking transactions targets this perspective3. more important than compensation, however, should be on ‘ prevention ’ through awareness initiatives. this would also help minimise complaint origination at the bank / fsp level and reduce complaint clogging at the ombudsman level. as i have mentioned earlier, i would like to add that the reserve bank has issued guidelines last year strengthening the internal ombudsman scheme in banks. while it is envisaged that the ios appointed by the banks would be independent in their functioning ; it is imperative that banks understand that all complaints which are partially or wholly rejected by the banks must necessarily pass through the desk of io before final closure. i am sure the banks are taking steps to appoint adequate number of ios, in line with the volume of complaints received by them as provided in the scheme. a critical aspect of consumer protection that calls for dedicated attention within banks / fsps is management engagement. top and senior management in charge of grievance redressal need to take responsibility for the performance and robustness of the redressal framework and engage through deep involvement, close monitoring and oversight of issues involved. they and their staff, need to be driven by ‘ true service ’ sentiments. customer service and consumer protection should not be relegated to the sidelines by goals driven by hard targets and sales related incentives for on - boarding customers. banks /