The RBI Ombudsman may also have the power to award compensation of up to ₹3 lakh for loss of time, expenses, harassment, or mental anguish to the complainant. This limit has been increased from ₹1 lakh. This new rule will be effective from July 1, 2026.
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RBI Compensation Limit Hike:The Reserve Bank of India has empowered its Ombudsman (Ombudsman) to award compensation of up to ₹30 lakh to complaining customers, a 50% increase from the previous limit of ₹20 lakh. This compensation will be awarded by the regulated entities against whom complaints have been filed for deficiency in service. This compensation is solely for the loss suffered by the complainant, and there is no limit on the amount of disputes brought before the Ombudsman that the Ombudsman or his deputy can settle or award.
Compensation up to ₹3 lakh
In addition, the RBI Ombudsman may also award compensation of up to ₹3 lakh for loss of time, expenses, harassment, or mental anguish to the complainant. This specific limit has been increased from ₹1 lakh. This new rule will come into effect from July 1, 2026.
You can file a complaint with the Ombudsman.
If regulated entities do not respond to their complaints within 30 days, or if they are not satisfied with the resolution, aggrieved customers can file a complaint with the RBI Ombudsman. However, the RBI Ombudsman will not accept complaints that are pending before a court, tribunal, arbitrator, or any other judicial or quasi-judicial forum.
The RBI stated, “The proposed limits—₹30 lakh (consequential loss) and₹3 lakh (time/expense/trouble)—strike a sensible balance between providing meaningful relief and deterrence to consumers, on the one hand, and the interests of regulated entities, on the other.”
Appeal Against Compensation
Regulated entities can appeal compensation to the Appellate Authority within 30 days from the date of the complainant’s letter accepting the award. The regulator has kept the proposed compensation amount high despite receiving opposing feedback. It specifically received a comment against the ₹3 million compensation from issuers of prepaid payment instruments (PPIs), which typically handle low-volume transactions.
Complaint Against Compensation
It further states, “Appeals against compensation under this scheme are principle-based and entity-neutral, and the amount fixed is a ceiling, while the actual compensation will be determined by the Ombudsman based on the facts and merits of each case.”
Commercial banks, regional rural banks, state cooperative banks, central cooperative banks, urban cooperative banks, deposit-taking non-banking financial companies (excluding housing finance companies), and NBFCs with assets of at least ₹100 crore, PPI issuers, and credit information companies will be covered under this scheme.
