Ombudsman Scheme for Digital Transactions, 2019
In exercise of the powers conferred by Section 18 of the Payment and Settlement Systems Act, 2007, being satisfied that in the public interest and in the interest of conduct of business relating to payment systems, it is necessary to provide for a mechanism of Ombudsman for redressal of complaints against deficiency in services related to digital transactions, the Reserve Bank of India hereby directs that, the System Participants defined under the Ombudsman Scheme for Digital Transactions, 2019 shall come within the ambit, and should comply with the provisions of the Ombudsman Scheme for Digital Transactions, 2019.
The Scheme shall come into force from January 31, 2019.
The Scheme is introduced with the object to facilitate the satisfaction or settlement of complaints regarding digital transactions undertaken by customers of System Participants as defined under the Scheme.
CHAPTER I
PRELIMINARY
1. SHORT TITLE, COMMENCEMENT, EXTENT AND APPLICATION
(1) This Scheme may be called the Ombudsman Scheme for Digital Transactions, 2019.
(2) It shall come into force on such date as the Reserve Bank may specify.
(3) It shall extend to the whole of India.
(4) The Scheme shall apply to the business in India of System Participants as defined under the Scheme.
2. SUSPENSION OF THE SCHEME
(1) The Reserve Bank, if it is satisfied that it is expedient so to do, may by order suspend for such period as may be specified in the order, the operation of all or any of the provisions of the Scheme, either generally or in relation to any specified System Participant.
(2) The Reserve Bank may, by order, extend from time to time, the period of any suspension ordered as aforesaid by such period, as it thinks fit.
3. DEFINITIONS
In this Scheme unless there is anything repugnant in the subject or content: (1) ‘Appellate Authority’ means the Deputy Governor in charge of the Department of the Reserve Bank implementing the Scheme.
(2) ‘Authorised Representative’ means a person (other than an advocate) duly appointed and authorised by a complainant to act on his / her behalf and represent him / her in the proceedings under the Scheme before theOmbudsman as well as Appellate Authority for consideration of his / her complaint.
(3) 'Award’ means an Award passed by the Ombudsman for Digital Transactions in accordance with the provisions of the Scheme.
(4) ‘Complaint’ means any representation in writing or through electronic means containing grievance/s alleging deficiency in service by the System Participants as mentioned in Clause 8 of the Scheme.
(5) “Digital Transaction’ means a payment transaction in a seamless system effected without the need for cash at least in one of the two legs, if not in both. This includes transactions made through digital / electronic modes wherein both the originator and the beneficiary use digital / electronic medium to send or receive money.”
(6) ‘Ombudsman for Digital Transactions’ means any officer of the Reserve Bank appointed under Clause 4 of the Scheme.
(7) ‘Reserve Bank’ means the Reserve Bank of India constituted under Section 3 of the Reserve Bank of India Act, 1934 (Act 2 of 1934).
(8) ‘Scheme’ means the Ombudsman Scheme for Digital Transactions, 2019.
(9) ‘Secretariat’ means the office constituted as per Sub-Clause (1) of Clause 6 of the Scheme.
(10) ‘Settlement’ means an agreement reached by the parties either by conciliation or mediation under Clause 11 of the Scheme.
(11) ‘System Participant’ means any person other than a bank participating in a payment system as defined under Section 2 of the Payment and Settlement Systems Act, 2007 excluding a ‘System Provider ’.
(12) All other expressions unless defined herein shall have the same meaning as has been assigned to them under the Payment and Settlement Systems Act, 2007 or any statutory modification or enactment thereto or as used in commercial parlance, as the case may be.
CHAPTER II
ESTABLISHMENT OF OFFICE OF THE OMBUDSMAN FOR DIGITAL TRANSACTIONS
4. APPOINTMENT & TENURE
(1) 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 entrusted to them by or under the Scheme.
(2) The appointment of Ombudsman for Digital Transactions under the above Clause may be made for a period not exceeding three years at a time.
5. LOCATION OF OFFICE AND TEMPORARY HEADQUARTERS
(1) The office of the Ombudsman for Digital Transactions shall be located at such places as may be specified by the Reserve Bank.
(2) In order to expedite disposal of complaints, the Ombudsman for Digital Transactions may hold sittings at such places within his/her area of jurisdiction as may be considered necessary and proper by him/her in respect of a complaint or reference before him/her.
6. SECRETARIAT
(1) The Reserve Bank shall depute such number of its officers or other staff to the office of the Ombudsman for Digital Transactions as is considered necessary to function as the secretariat of the Ombudsman for Digital Transactions.
(2) The cost of the Secretariat shall be borne by the Reserve Bank.
(3) The Department administering the Scheme shall act as and discharge the functions of Secretariat of the Appellate Authority.
CHAPTER III
7. JURISDICTION, POWERS AND DUTIES OF THE OMBUDSMAN FOR DIGITAL TRANSACTIONS
(1) The Reserve Bank shall specify the territorial limits to which the authority of each Ombudsman for Digital Transactions appointed under Clause 4 of the Scheme shall extend.
(2) The Ombudsman for Digital Transactions shall receive and consider complaints relating to deficiency in services on the grounds mentioned in Clause 8 irrespective of the pecuniary value. He / She shall, to the satisfaction of the parties involved, dispose of the complaint through:
(i) Settlement by agreement between parties; OR
(ii) Conciliation and mediation between parties; OR
(iii) Passing an Award as per the provisions of the Scheme.
(3) The Ombudsman for Digital Transactions shall exercise general powers of superintendence and control over his/her office and shall be responsible for the conduct of business thereat.
(4) The Office of the Ombudsman for Digital Transactions shall draw up an annual budget in consultation with the Reserve Bank and shall exercise powers of expenditure within the approved budget on the lines of the Expenditure Rules framed by the Reserve Bank from time to time.
(5) The Ombudsman for Digital Transactions shall send to the Governor, Reserve Bank, a report, as on 30th June every year, containing a general review of the activities of his office during the preceding financial year and shall furnish such other information as the Reserve Bank may direct and the Reserve Bank may, if it considers necessary in the public interest so to do, publish the report and the information received from the Ombudsman for Digital Transactions in such consolidated form or otherwise as it deems fit.
CHAPTER IV
PROCEDURE FOR REDRESSAL OF GRIEVANCE
8. GROUNDS OF COMPLAINT
Any person may file a complaint free of cost with the Ombudsman for Digital Transactions having jurisdiction on any one of the following grounds alleging deficiency in service:
(1) Prepaid Payment Instruments: Non-adherence to the instructions of Reserve Bank by System Participants about Prepaid Payment Instruments on any of the following:
a) Failure in crediting merchant's account within reasonable time;
b) Failure to load funds within reasonable time in wallets / cards;
c) Unauthorized electronic fund transfer;
d) Non-Transfer / Refusal to transfer/ failure to transfer within reasonable time, the balance in the Prepaid Payment Instruments to the holder’s ‘own’ bank account or back to source at the time of closure, expiry of validity period etc., of the Prepaid Payment Instrument;
e) Failure to refund within reasonable time / refusal to refund in case of unsuccessful / returned / rejected / cancelled / transactions;
f) Non-credit / delay in crediting the account of the Prepaid Payment Instrument holder as per the terms and conditions of the promotion offer(s) from time to time, if any;
g) Non-adherence to any other instruction of the Reserve Bank on Prepaid Payment Instruments.
(2) Mobile / Electronic Fund Transfers: Non-adherence to the instructions of the Reserve Bank on Mobile / Electronic fund transfers by System Participants on any of the following:
a) Failure to effect online payment / fund transfer within reasonable time;
b) Unauthorized electronic fund transfer;
c) Failure to act upon stop-payment instructions within the time frame and under the circumstances notified to the customers within prescribed timeline;
d) Failure to reverse the amount debited from customer account in cases of failed payment transactions within prescribed timeline;
e) Non-adherence to any other instruction of the Reserve Bank on Mobile / Electronic fund transfers.
(3) Non-adherence to instructions of Reserve Bank / respective System Provider to System Participants, on payment transactions through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS) / Bharat QR Code / UPI QR Code on the following grounds:
a) Failure in crediting funds to the beneficiaries’ account;
b) Failure to return within reasonable time the payment to the originating member in case of failure to credit the funds to the beneficiary’s account;
c) Failure to / delay in refund of money back to account in case of transaction failure or declined transactions (i.e. failed transactions);
d) Non-adherence to any other instruction of the Reserve Bank on payment transactions / through Unified Payments Interface (UPI) / Bharat Bill Payment System (BBPS)/ Bharat QR Code / UPI QR Code.
(4) Non-reversal / failure to reverse within reasonable time, funds wrongly transferred to the beneficiary account due to lapse at the end of System Participant.
(5) Any other matter relating to the violation of the directives including on fees / charges, if any, issued by the Reserve Bank in relation to digital transactions.
9. PROCEDURE FOR FILING COMPLAINT
(1) Any person who has a grievance on any one or more of the grounds mentioned in Clause 8 of the Scheme may, himself or through his authorised representative (other than an advocate), make a complaint to the Ombudsman for Digital Transactions within whose jurisdiction the branch or office of the System Participant complained against is located. Provided that a complaint arising out of services with centralized operations, shall be filed before the Ombudsman for Digital Transactions within whose territorial jurisdiction the billing / declared address of the customer is located.
(2) (a) The complaint in writing shall be duly signed by the complainant or his authorized representative and shall be, as far as possible, in the form or as near as thereto as circumstances admit, stating clearly:
I. The name and the address of the complainant;
II. The name and address of the branch or office of the System Participant against which the complaint is made;
III. The facts giving rise to the complaint;
IV. The nature and extent of the loss caused to the complainant; and
V. The relief sought for.
(b) The complainant shall file along with the complaint, copies of the documents, if any, which he / she proposes to rely upon.
(c) A complaint made through electronic means may be accepted by the Ombudsman for Digital Transactions.
(d) The Ombudsman for Digital Transactions may also entertain complaints covered under this Scheme received by Central Government or Reserve Bank and forwarded to the Ombudsman for Digital Transactions for disposal.
(3) No complaint to the Ombudsman for Digital Transactions shall lie unless:
(a) The complainant had, before making a complaint to the Ombudsman for Digital Transactions, (i) made a written representation to the System Participant who had rejected the complaint, or, (ii) the complainant had not received any reply within a period of one month after the System Participant received her/his representation, or, (iii) the complainant is not satisfied with the reply given to her/him by the System Participant;
(b) The complaint is made not later than one year after the complainant has received the reply of the System Participant to her/ 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;
(c) In exceptional circumstances as decided by the Ombudsman, the complaint is made before the expiry of the period of limitation prescribed under the Indian Limitation Act, 1963 for such claims.
(d) The complaint is not in respect of the same cause of action which was settled or dealt with on merits by the Ombudsman for Digital Transactions in any previous proceedings, whether or not, received from the same complainant or along with one or more complainants or one or more of the parties concerned with the cause of action;
(e) The complaint does not pertain to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a Decree or Award or Order has been passed by any such Court, Tribunal, Arbitrator or Forum;
(f) The complaint is not frivolous or vexatious in nature; (g) The complaint does not fall under the disputes covered under Section 24 of the Payment and Settlement Systems Act, 2007; and
(h) The complaint does not pertain to disputes arising from a transaction between customers.
10. POWER TO CALL FOR INFORMATION
(1) For the purpose of carrying out his duties under this Scheme, the Ombudsman for Digital Transactions may require the System Participant against whom the complaint is made or any other System Participant concerned with the complaint, to provide any information or furnish certified copies of any document relating to the complaint which is or is alleged to be in its possession.
Provided that in the event of the failure of a System Participant to comply with the requisition without sufficient cause, the Ombudsman for Digital Transactions may, if he/ she deems fit, draw the inference that the information, if provided, or copies if furnished, would be unfavourable to the System Participant.
(2) The Ombudsman for Digital Transactions shall maintain confidentiality of any information or document that may come into his knowledge or possession in the course of discharging his duties and shall not disclose such information or document to any person except with the consent of the person furnishing such information or document.
Provided that, nothing in this Clause shall prevent the Ombudsman for Digital Transactions from disclosing information or document furnished by a party in a complaint to the other party or parties to the extent considered by him to be reasonably required to comply with any legal requirement or the principles of natural justice and fair play in the proceedings.
11. SETTLEMENT OF COMPLAINT BY AGREEMENT
(1) As soon as it may be practicable to do, the Ombudsman for Digital Transactions shall send a copy of the complaint to the branch or office of the System Participant named in the complaint, under advice to the Nodal Officer referred to in Sub-Clause (4) of Clause 15, and endeavour to promote a settlement of the complaint by agreement between the complainant and the System Participant through conciliation or mediation.
(2) For the purpose of promoting a settlement of the complaint, the Ombudsman for Digital Transactions shall not be bound by any rules of evidence and may follow such procedure as he may consider just and proper, which shall, however, at the least, require the Ombudsman for Digital Transaction to provide an opportunity to the complainant to furnish his/her submissions in writing along with documentary evidence within a time limit on the written submissions made by the System Participant.
Provided, where the Ombudsman for Digital Transactions is of the opinion that the documentary evidence furnished and written submissions by both the parties are not conclusive enough to arrive at a decision, he may call for a meeting of System Participant and the complainant together, to promote an amicable resolution.
Provided further that where such meeting is held and it results in a mutually acceptable resolution of the grievance, the proceedings of the meeting shall be documented and signed by the parties specifically stating that they are agreeable to the resolution and thereafter the Ombudsman for Digital Transactions shall pass an order recording the fact of settlement annexing thereto the terms of the settlement.
(3) The Ombudsman for Digital Transactions may deem the complaint as resolved, in any of the following circumstances:
a. Where the grievance raised by the complainant has been resolved by the System Participant with the intervention of the Ombudsman for Digital Transactions; or
b. The complainant agrees, whether in writing or otherwise, to the manner and extent of resolution of the grievance provided by the Ombudsman for Digital Transactions based on the conciliation and mediation efforts; or
c. In the opinion of the Ombudsman for Digital Transactions, the System Participant has adhered to the norms and practices in vogue and the complainant has been informed to this effect through appropriate means and complainant's objections, if any, to the same are not received by the Ombudsman for Digital Transactions within the time frame provided.
(4) The proceedings before the Ombudsman for Digital Transactions shall be summary in nature
12. AWARD
(1) If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as the Ombudsman for Digital Transactions may allow the parties, he may, after affording the parties a reasonable opportunity to present their case, pass an Award.
(2) The Ombudsman for Digital Transactions shall consider the evidence placed before him by the parties, the principles of banking law and practice, directions, instructions and guidelines issued by the Reserve Bank from time to time and such other factors which in his opinion are relevant to the complaint.
(3) The Award shall state briefly the reasons for passing the Award.
(4) The Award passed under Sub-Clause (1) shall contain the direction/s, if any, to the System Participant for specific performance of its obligations and in addition to or otherwise, the amount, if any, to be paid by the System Participant to the complainant by way of compensation for any loss suffered by the complainant, arising directly out of the act or omission of the System Participant.
(5) Notwithstanding anything contained in Sub-Clause (4), the Ombudsman for Digital Transactions shall not have the power to award compensation which is more than the actual loss suffered, or two million rupees whichever is lower. The compensation that can be awarded by the Ombudsman for Digital Transactions shall be exclusive of the amount involved in the dispute.
(6) The Ombudsman for Digital Transactions may also award compensation in addition to the above but not exceeding rupees 0.1 million to the complainant, taking into account the loss of the complainant's time, expenses incurred by the complainant, harassment and mental agony suffered by the complainant.
(7) A copy of the Award shall be sent to the complainant and the System Participant free of cost.
(8) An Award shall lapse and be of no effect unless the complainant furnishes to the System Participant concerned within a period of 30 days from the date of receipt of copy of the Award, a letter of acceptance of the Award in full and final settlement of his/her claim.
Provided that no such acceptance may be furnished by the complainant if he has filed an Appeal under Sub-Clause (1) of Clause 14.
(9) The System Participant shall, unless it has preferred an appeal under SubClause (1) of Clause14, within one month from the date of receipt by it of the acceptance in writing of the Award by the complainant under Sub-Clause (8), comply with the Award and intimate compliance to the Ombudsman for Digital Transactions.
(10) It shall be the obligation of the System Participant concerned to implement the settlement arrived with the complainant or the Award passed by the Ombudsman for Digital Transactions when it becomes final and send a report in this regard to the Reserve Bank within 15 days of the Award becoming final. In the event of non-implementation of settlement or the Award, the complainant may represent to the Reserve Bank and the Reserve Bank may initiate such action under the provisions of applicable Statutes, as it deems fit.
13. REJECTION OF THE COMPLAINT
(1) The Ombudsman for Digital Transactions may reject a complaint at any stage if it appears to him that the complaint made is;
a. Not on the grounds of complaint referred to in Clause 8; or
b. Not in accordance with Sub Clause (3) of Clause 9; or
c. Beyond the limit of compensation prescribed under Clause 12 (5) and 12 (6): or
d. Requiring consideration of elaborate documentary and oral evidence and the proceedings before the Ombudsman for Digital Transactions are not appropriate for adjudication of such complaint; or
e. Without any sufficient cause; or
f. Not pursued by the complainant with reasonable diligence; or
g. In the opinion of the Ombudsman for Digital Transactions there is no loss or damage or inconvenience caused to the complainant.
(2) The Ombudsman for Digital Transactions, shall, if it appears at any stage of the proceedings that the complaint pertains to the same cause of action, for which any proceedings before any court, tribunal or arbitrator or any other forum is pending or a decree or Award or order has been passed by any such court, tribunal, arbitrator or forum, pass an order rejecting the complaint giving reasons thereof.
14. APPEAL BEFORE THE APPELLATE AUTHORITY
(1) Party to the complaint aggrieved by an Award under Clause 12 or rejection of a complaint for the reasons referred to in Sub Clauses (d) to (g) of Clause 13, may within 30 days of the date of receipt of communication of Award or rejection of complaint, prefer an appeal before the Appellate Authority.
Provided that, in case of appeal by the System Participant, the period of thirty days for filing an appeal shall commence from the date on which the System Participant receives letter of acceptance of Award by complainant under SubClause (8) of Clause 12.
Provided that the Appellate Authority may, if satisfied that the applicant had sufficient cause for not making the appeal within time, allow a further period not exceeding 30 days.
Provided further that appeal may be filed by a System Participant only with the previous sanction of the Chairman or, in his absence, the Managing Director or the Executive Director or the Chief Executive Officer or any other equivalent officer.
(2) The Appellate Authority shall, after giving the parties a reasonable opportunity of being heard:
(a) Dismiss the appeal; or,
(b) Allow the appeal and set aside the Award; or,
(c) Remand the matter to the Ombudsman for Digital Transactions for fresh disposal in accordance with such directions as the Appellate Authority may consider necessary or proper; or,
(d) Modify the Award and pass such directions as may be necessary to give effect to the Award so modified; or,
(e) Pass any other order as it may deem fit
(3) The order of the Appellate Authority shall have the same effect as the Award passed by the Ombudsman for Digital Transactions under Clause 12 or the order rejecting the complaint under Clause 13, as the case may be.
15. SYSTEM PARTICIPANTS TO DISPLAY SALIENT FEATURES OF THE SCHEME FOR COMMON KNOWLEDGE OF PUBLIC
(1) The System Participant covered under the Scheme shall ensure to display prominently in all its offices and branches the internal customer grievance redressal framework, including contact details of the designated nodal officer to handle the customer complaints / grievances along with the escalation matrix.
(2) The System Participant covered under the Scheme shall also ensure that the purpose of the Scheme and the contact details of the Ombudsman for Digital Transactions to whom the complaints are to be made by the aggrieved party are displayed prominently in all the offices and branches of the System Participant in such manner that a person visiting the office or branch has adequate information of the Scheme.
(3) The System Participant covered by the Scheme shall ensure that a copy of the Scheme is available with the designated officer of the System Participant for perusal in the office premises and notice about the availability of the Scheme with such designated officer shall be displayed along with the notice under Sub-Clause (1) & (2) of this Clause. The System Participant shall place a copy of the Scheme on its websites / mobile applications and update the same as and when required.
(4) The System Participant covered by the Scheme shall appoint Nodal Officers at their Regional / Zonal Offices and inform the respective Office of the Ombudsman for Digital Transactions under whose jurisdiction the Regional / Zonal Office falls. The Nodal Officer, so appointed shall be responsible for representing the System Participant and furnishing information to the Ombudsman for Digital Transactions in respect of complaints filed against the System Participant. Wherever more than one zone / region of the System Participant is falling within the jurisdiction of the Ombudsman for Digital Transactions, one of the Nodal Officers shall be designated as the 'Principal Nodal Officer' for such zones or regions.
CHAPTER V
MISCELLANEOUS
16. REMOVAL OF DIFFICULTIES
If any difficulty arises in giving effect to the provisions of this Scheme, the Reserve Bank may make such provisions not inconsistent with the Payment and Settlement Systems Act, 2007 or the Scheme, as it appears to it to be necessary or expedient for removing the difficulty.
