Current Affairs · Banking Regulation & Schemes
A corporate employee used a third-party digital lending application partnered with a regulated NBFC named 'Finance-Plus' to borrow ₹50,000. Despite timely repayment, she received threatening messages from automated bots regarding a pending fee. She complained to the NBFC, which denied responsibility, claiming the messages were from the tech partner's server. She then approached the Integrated Ombudsman. During proceedings, the NBFC failed to provide its agreement with the tech partner and ignored notices for 20 days. The Ombudsman awarded ₹50,000 for mental agony. The customer accepted, but the NBFC filed an appeal to the Appellate Authority, claiming the compensation was excessive. Which of the following is the most legally sound analysis of this scenario under the RB-IOS guidelines?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The appeal by the NBFC will be rejected because a regulated entity cannot appeal against an award if it failed to submit its written version within the prescribed time limit before the Ombudsman.✓
- 2The Appellate Authority will set aside the award because the maximum compensation for mental agony is restricted to ₹10,000, making the ₹50,000 award legally unsustainable.
- 3The customer is not eligible for compensation because she had already repaid the principal loan amount prior to filing the grievance.
- 4The Ombudsman's award is invalid because the dispute involves a third-party technology application that does not fall under the direct regulatory purview of the RBI.
Correct answer
The appeal by the NBFC will be rejected because a regulated entity cannot appeal against an award if it failed to submit its written version within the prescribed time limit before the Ombudsman.
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