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Reserve Bank of India (RBI) issued a circular on August 6 2020 wherein the bank had introduced Online Dispute Resolution (ODR) system to resolve customer disputes and grievances pertaining to digital payments, using a proper system-driven process and rule-based mechanism with minimal manual intervention. The scheme is mentioned Statement on Developmental and Regulatory Policies dated August 6, 2020
As the number of digital transactions increasing significantly, there is a concomitant increase in the number of disputes and grievances.
To recourse technology-driven redressal mechanisms that are rule-based, transparent, and involve minimum (or no) manual intervention is necessary to deal with them in a timely and effective manner.
Accordingly, the Reserve Bank stated there is a need for Payment System Operators (PSOs) to introduce Online Dispute Resolution (ODR) Systems in a phased manner.
Notably to start, authorized PSOs shall be required to implement Online Dispute Resolution (ODR) systems for failed transactions in their respective Payment Systems. Further Reserve bank is of the view that based on the experience gained, ODR arrangements will be extended to other types of disputes and grievances.
Apex bank mentioned that according to, The Payment System Vision-2021” Reserve Bank highlights there is a need for a rule-based technology system which is customer-friendly and transparent to redress dispute or grievances.
“ As a step in this direction, authorized Payment System Operators (PSOs) – banks and non-banks – and their participants are hereby advised to put in place system/s for ODR for resolving disputes and grievances of customers.”
“To begin with, authorized PSOs shall be required to implement an ODR system for disputes and grievances related to failed transactions in their respective payment systems by January 1, 2021. The PSOs shall provide access to such a system to its participating members i.e., Payment System Participants (PSPs). Any entity setting up a payment system in India thereafter or participating therein shall make available the
ODR system at the commencement of its operations. The minimum requirements of the ODR system as specified”
RBI clarifies that, if the grievance remains unresolved up to one month, the customer may approach the respective ombudsman. These directions are issued under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007
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