Economics • Banking & FinanceMedium
In the context of Indian banking, what does 'Internal Ombudsman' mechanism entail?
A. An independent internal authority appointed by banks to review unresolved customer grievances before they escalate to the Banking Ombudsman✓ Correct Answer
B. A statutory committee appointed by the Ministry of Finance to audit bank executive compensation
C. An investigative wing of the Central Vigilance Commission placed inside public sector banks
D. A board-level risk management group that oversees foreign exchange transactions
💡 Solution & Explanation
The Internal Ombudsman mechanism is an independent supervisory tier mandated by the Reserve Bank of India for regulated banks to impartially re-examine customer complaints before escalation to the external Banking Ombudsman. This internal grievance redressal structure helps resolve disputes swiftly within the bank without burdening regulatory dispute forums.
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