Ombudsman Scheme for Digital Transactions (OSDT)

The Reserve Bank of India (RBI) launched the Ombudsman Scheme for Digital Transactions (OSDT) vide a notification dated 31 January 2019 for redressal of complaints against ‘system participants’ as defined in the said scheme. It is an expeditious and cost-free apex-level mechanism for resolution of complaints regarding digital transactions undertaken by customers of the system participants. What is this office all about and what is it expected to do, and what may constitute grounds of complaint for customers, are aspects that this article will explain. So, the next time you are staring at the ‘transaction failed’ message on your screen, you may have to worry less, knowing that someone has got your back.


  1. The scheme, launched under Section 18 of the Payment and Settlement Systems Act, 2007, 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.
  2. 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.
  3. The scheme provides for an appellate mechanism under which the complainant/system participant has the option to appeal against the decision of the Ombudsman before the appellate authority.
  4. Complaints relating to digital transactions conducted through banks will continue to be handled under the Banking Ombudsman Scheme as per existing guidelines.

In its ‘Statement on Developmental and Regulatory Policies’ issued in December 2018, RBI said this: “With the digital mode for financial transactions gaining traction in the country, there is an emerging need for a dedicated, cost-free and expeditious grievance redressal mechanism for strengthening consumer confidence in this channel. It has therefore been decided to implement an ‘Ombudsman Scheme for Digital Transactions’ covering services provided by entities falling under Reserve Bank’s regulatory jurisdiction. The scheme will be notified by the end of January 2019.”


System participant means any person other than a bank participating in a payment system as defined under Section 2 of the Payment & Settlement Systems Act, 2007, excluding a system provider.

  1. The Ombudsman for Digital Transactions is a senior official appointed by RBI to redress customer complaints against system participants for deficiency in certain services covered under the grounds of complaint specified under Clause 8 of the scheme.


As per Clause 8 of the scheme, the Ombudsman for Digital Transactions shall receive and consider complaints on deficiency in services against system participants on any of the following grounds:

  1. Prepaid payment instruments
  2. Mobile/Electronic fund transfers
  3. Non-adherence to instructions of RBI/respective system provider to system participants, on payment transactions through payment gateways (UPI/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 RBI in relation to digital transactions

In respect of digital transactions done on third-party platforms, it will be the responsibility of the payment service provider to resolve customer disputes arising out of such transactions.


  • Any person who has a grievance on any one or more of the grounds mentioned herein may herself/himself or through her/his authorized representative (other than an advocate) make a complaint against the branch or office of the system participant with the Ombudsman in the applicable jurisdiction. As for a complaint arising out of services with centralized operations, the jurisdiction would be the declared address of the complainant.
  • The complaint is made within one year after the complainant has received the reply from the system participant to her/his representation, or if no reply has been received, not later than 1 year and 1 month after the date of representation to the system participant.
  • The complaint shall be in writing duly signed and shall be in the complaint form furnishing full details.
  • The complaint shall be accompanied by copies of documents to be relied upon.
  • E-complaints are accepted.
  • Complaints received by RBI/GoI can also be taken up by the Ombudsman.


  • Complaints already settled in a previous proceeding or with the same cause of action or that may be proceeding before any court/tribunal/arbitrator/forum
  • Complaints that fall under the disputes covered under Payment and Settlement Systems Act, 2007
  • Complaints of disputed transactions between customers


The Ombudsman shall receive and consider complaints relating to deficiency in services on the grounds mentioned above, irrespective of pecuniary value. He shall dispose of the complaints through

  • Settlement by agreement between the parties, OR
  • Conciliation and mediation between the parties, OR
  • Passing an award

The Ombudsman endeavours to promote settlement of the complaint through conciliation/mediation by means of an agreement between the complainant and the system participant. If the terms of settlement (offered by the system participant) are acceptable in full and final settlement of one’s complaint, the Ombudsman will pass an order as per the terms of settlement and the same will then become binding on the system participant and the complainant.

If the system participant is found to have adhered to the extant norms and practices and if the complainant has been informed to this effect through appropriate means and the complainant’s objections, if any, are not received by the Ombudsman within the time frame provided, the Ombudsman may pass an order to close the complaint.


  1. If the Ombudsman is satisfied that there is indeed a deficiency of service on the part of the system participant and the complaint is not settled by agreement within a specified period as allowed by the Ombudsman, he/she proceeds to pass an award.
  2. Before passing an award, the Ombudsman will provide reasonable opportunity to the complainant and the system participant to present their case. It is up to the complainant to accept the award in full and final settlement or reject it.
  3. Any person aggrieved by an award or by the decision of the Ombudsman rejecting the complaint can approach the appellate authority.


  1. Amount of compensation

The compensation amount is limited to the amount arising directly out of the act or omission or commission of the system participant, or two million rupees (Rs 20 lakh), whichever is lower. The compensation shall be over and above the disputed amount.

  1. Amount of compensation for mental agony and harassment

The Ombudsman may award compensation not exceeding rupees 0.1 million (Rs 100,000) to the complainant for mental agony and harassment. The Ombudsman, while giving the compensation, shall take into account the loss of time and expenses incurred by the complainant, as also the harassment and mental anguish suffered by the complainant.


The complainant has the option to explore other recourse and/or remedies available as per the law.

One can file an appeal against the award or the decision of the Ombudsman rejecting the complaint, within 30 days of the date of receipt of communication of award or rejection of the complaint. The appellate authority may allow a further period not exceeding 30 days.


The Appellate Authority
Ombudsman Scheme for Digital Transactions
Consumer Education and Protection Department
Reserve Bank of India
First Floor, Amar Building Fort
Mumbai 400 001

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