The Reserve Bank of India has issued a notification announcing the withdrawal of its earlier 2021 framework on strengthening grievance redress mechanisms in banks. This change aligns regulatory instructions with updated disclosure norms, enhanced compensation rules, and the expanded role of Internal Ombudsmen.
Key Points of RBI Circular dated 11/02/2026
1. RBI withdraws the 2021 grievance redress framework: RBI has withdrawn its earlier circular dated January 27, 2021 on strengthening grievance redress mechanisms in banks. This withdrawal is effective immediately.
2. Reason for withdrawal: RBI reviewed the 2021 instructions because several new regulatory and supervisory measures have since overtaken or replaced parts of the earlier framework. These include:
a) Updated disclosure norms: Complaint‑related disclosures are now covered under the Master Direction on Financial Statements: Presentation and Disclosures, issued November 28, 2025.
b) Stronger compensation rules: The RBI–Integrated Ombudsman Scheme, 2026 has raised compensation limits. The RBI (Internal Ombudsman) Directions, 2026 now allow Internal Ombudsmen to recommend compensation awards.
c) Supervisory oversight: Banks’ grievance handling is now reviewed as part of regular RBI supervisory processes, making parts of the 2021 circular redundant.
3. Purpose of withdrawal: To avoid duplication and streamline instructions. To align all grievance-related requirements under the updated 2025–2026 regulatory framework.
4. Obligations of banks remain unchanged: RBI clarifies that:
- Withdrawal of the 2021 circular does not reduce banks’ responsibility.
- Banks must maintain strong grievance redress systems as required by:
- current RBI regulations,
- supervisory expectations, and
- their Board‑approved internal policies.
5. Final instruction: The 2021 circular is formally repealed from the date of this RBI Circular dated 11/02/2026.